BASEBALL: Magic Johnson in $2bn baseball deal

A CONSORTIUM spearheaded by former basketball great Earvin ‘Magic’ Johnson has agreed to buy the Los Angeles Dodgers baseball team for $2 billion – the most ever paid for a sports team.

Owner Frank McCourt announced the deal yesterday, capping a two-year drama that started with McCourt’s divorce and wound its way through bankruptcy court.

The buyers under the deal, unveiled hours before the famous franchise was scheduled to hold an auction with three bidders, were led by the investment banking firm Guggenheim Partners. Mark R Walter, chief executive officer of Guggenheim Capital, will be controlling partner of the ownership group.

As part of the deal, which if approved would lift the club out of bankruptcy, McCourt and certain affiliates of the buyers also plan to form a joint venture to acquire Dodger Stadium and the surrounding Chavez Ravine property for $150 million, the team said in a statement.

McCourt had separated the team from its real estate earlier in the process in a move opposed by some of the bidders, according to two people with knowledge of the bids. Earlier on Tuesday, Major League Baseball owners had approved three bidders for an auction of the team that was expected to start yesterday morning in New York, those sources also said.

The rival bidders approved by the league owners were a partnership that included hedge fund billionaire Steven Cohen and biotech billionaire Patrick Soon-Shiong and a second group headed by St Louis Rams owner Stan Kroenke from the National Football League (NFL).

In addition to Johnson and Walter, the purchasing group includes one-time Hollywood studio executive Peter Guber, former Washington Nationals baseball team president Stan Kasten and Guggenheim Partners President Todd Boehly, the Dodgers said.

Johnson, 52, who ended his 12-year career with the Los Angeles Lakers in 1991 after he was diagnosed with HIV, was a minority owner of the National Basketball Association (NBA) team for several years after his retirement and built a business that owns movie theatres, health clubs and other properties.

Johnson was among the earliest bidders for the Dodgers after McCourt put the team up for sale in November in an agreement with Major League Baseball. The league had asked the bankruptcy court to order the sale, accusing McCourt of violating its rules by taking team funds for personal use.

The Dodgers had landed in bankruptcy court in June 2011, more than a year after McCourt and his wife, Jamie, separated. The two argued in court over ownership of the team, and reached a divorce settlement in which Jamie McCourt was promised a $130 million payment to end her ownership claim.

“I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section of our wonderful community of Los Angeles,” Johnson said in a statement.

The $2 billion price tag would mark the largest sum ever spent for a major league US sport franchise, surpassing the previous record, $1.1 billion, paid by real estate developer Steven Ross in 2009 to acquire the NFL’s Miami Dolphins.

The highest price previously paid for a Major League Baseball club was $845 million, which the Ricketts family spent in 2009 to buy the Chicago Cubs.