Bidders for bankrupt Dodgers talking about combining groups
Initial offers for the bankrupt Dodgers franchise were submitted Monday
Possible Bidders include Magic Johnson, Joe Torre, Larry King and Mark Cuban
Dodgers owner Frank McCourt is schedule to select the winning bid by April 6
NEW YORK (AP) -- Some bidders for the Los Angeles Dodgers have started talking with each other about combining their groups, even before initial offers for the bankrupt team were submitted Monday.
Two bidders said talks about possible group mergers were ongoing. They both spoke on condition of anonymity because Blackstone Group, which is managing the sale for owner Frank McCourt, made them sign nondisclosure agreements.
"It would be a shock if they don't start talking merger," said Marc Ganis, president of the Chicago-based consulting firm Sportscorp, which is not involved. "I think we'll get a half-dozen parties that are actually in the bid, plus or minus one."
Blackstone will analyze all of the initial bids and then select up to 10 - perhaps this week but maybe next - to forward to Major League Baseball, which already has started due diligence on some. Those picked must pay MLB $25,000 to cover the costs of baseball's investigation.
The actual cash paid in a sale figures to be depressed by the team's debt, which stands at $573 million, according to a filing in U.S. Bankruptcy Court last Friday. Because of the debt, the price may not top the record price for a baseball franchise, the $845 million paid by the Ricketts family for the Chicago Cubs in 2009.
Even then the amount of cash needed is huge, and baseball likely will be wary of the leverage allowed to the incoming owners.
Among the groups thought to have the most money:
Steve Cohen of the hedge fund SAC Capital Advisors and baseball and basketball agent Arn Tellem
former Los Angeles Dodgers manager Joe Torre and real estate developer Rick Caruso
former Dodgers owner Peter O'Malley
the family of the late Roy E. Disney and Stanley Gold of Shamrock Holdings.
O'Malley has discussed combining with the Disney-Gold group, as first reported last week by the Los Angeles Times, and O'Malley may be talking with others.
Additional groups who have said they were bidding include:
former agent and current Chicago White Sox special assistant Dennis Gilbert, talk show host Larry King and Jason Reese of Imperial Capital
former Dodgers general manager Fred Claire, former Oakland Athletics president Andy Dolich and former Dodgers batboy Ben Hwang, who brought in the financial backers
former Dodgers stars Orel Hershiser and Steve Garvey, and Joey Herrick of Natural Balance Pet Foods.
And then there are those who may be interested:
Dallas Mavericks owner Mark Cuban
Pittsburgh Penguins owner Ron Burkle
Real estate developer Alan Casden, who investigated bidding for the Dodgers in 2003.
"I can't comment on that at all," Cuban said Monday before the Mavs' game against Phoenix.
More than anything, Monday was the starting focal point for the bidding process rather than a deadline.
"At this point, what you're trying to do is cull the herd," Ganis said. "All the interest had been a good thing for McCourt, but it's also been an easy cheap way for anyone in LA who wants some publicity and has a couple of shekels to get their name in the media."
Joshua Macciello, a 36-year-old former Brooklynite and current Californian, said he was bidding. He is CEO of ArmItal Inc., which he says makes real estate and mineral mining investments.
"I have a ZZ Top kind of goatee," he said. "I don't look like the traditional three-piece suit kind of hedge fund guy."
In addition, several people involved in the bidding said they doubted that anyone with the finances to purchase the team would be prevented from bidding even if they didn't make themselves known to Blackstone before the deadline.
According to a disclosure statement filed Friday with the team's reorganization plan in the bankruptcy court, the Dodgers are $573 million in debt: $368 million with Dodgers Tickets LLC, $150 million with Los Angeles Dodgers LLC and $55 million with Dodgers Club Trust. All three are subsidiaries of the team's parent holding company.
McCourt is to select the winning bid by April 6, with the sale to close by April 30.
Much of the purchase price figures to be used to pay down the debt. Of the money left over, McCourt must pay a $131 million divorce settlement to Jamie McCourt by April 30 and will have substantial capital gains taxes. He bought the Dodgers, the ballpark and 250 acres of land that include the parking lots from the Fox division of Rupert Murdoch's News Corp. in 2004 for $430 million.
While the parking lots and land surrounding Dodger Stadium are not included in what initially is being offered for sale, bidders are likely to want those as part of any deal because they wouldn't want to acquire the team and then have McCourt as landlord of the surrounding property. Whether the land is included will impact the purchase price.
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