The inside story of how Magic won the Dodgers
Magic Johnson group's won the Dodgers with a bold pre-auction bid, as they raised their proposal to $2 billion from about $1.5 billion while the other prospective ownership groups declined to improve their bids in the thought that the sale wouldn't be settled until an auction that was scheduled for today.
The auction never happened.
Meanwhile, the Johnson group's candidacy was drawing "significant'' concern on a conference call of other owners, who were interested in the financing of the bid, its reliance on insurance monies and how regulation could affect their liquidity, sources say. Ultimately, the court's judge persuaded the owners on the call to vote to approve the Johnson-Stan Kasten group, and they did so 30-0, under the belief that the judge would monitor things in the auction.
Unbeknownst to baseball's other 29 owners, the Blackstone Group that was handling the sale and allegedly even the judge, outgoing Dodgers owner Frank McCourt had already solicited the record $2-billion bid from Johnson's group in McCourt's attempt to get his deal before an auction. The other owners, including the ones who had the most questions about Johnson's group (including Jerry Reinsdorf, Jeffrey Loria and Bill DeWitt), may have felt blindsided by the deal that went down Tuesday night.
"What I know for a fact is that we were approved 30-0,'' said one person involved with Johnson's group. "A few questions are OK.''
While there was some serious questioning on the call regarding the Johnson group, one person familiar with the situation explained that there were questions about all three groups.
Stevie Cohen runs a hedge fund, so that will naturally bring some level of concern. Stan Kroenke, the St. Louis Rams owner, hadn't yet been approved for cross-ownership by the NFL.
"Everyone had a horse in the race,'' is the way that management person put the back-and-forth on the call.
Johnson's group was technically approved for about $1.5 billion, which is where they were before McCourt solicited the bids. Word is, McCourt went twice to the three bidders. While the Magic group raised their bid on the first solicitation, Cohen stayed at about $1.3-1.4 billion, and Kroenke stayed about there as well, suggesting he'd wait until the auction.
A second solicitation resulted in Magic and Cohen staying where they were, and Kroenke failing to get back to McCourt, according to sources.
The losing bidders surely were shocked a deal was done Tuesday night, before the auction. But even at auction, the others weren't expected to get close to $2 billion, and Cohen has told folks since that he wouldn't have gotten there. "No one was going near $2 billion,'' one person familair with the process said.
MLB has final approval over the sale, but nobody involved in the process foresees any real issue now. Baseball is very happy about the sale price, and MLB bigwigs all along have loved the idea of the Magic-Kasten team.
Johnson is a local hero in Los Angeles, and it doesn't hurt that he's a minority, either. Kasten is a longtime friend of commissioner Bud Selig. If the group is shown not to have the money, of course then MLB would be forced not to approve the sale. But no one involved expects that to be the case.