The iconic yet troubled Major League Baseball Los Angeles Dodgers are getting a new ownership partnership, pending approval by a bankruptcy judge. The deal will beat the prevailing estimates of about $1.5B by more than $500M when associated assets that are also being acquired are factored in. Burgeoning cable rights packages are said to be underpinning baseball franchise values.
The group buying the franchise features former basketball great Magic Johnson of the local Los Angeles Lakers, long-time baseball executive Stan Kasten, and deep-pocketed Guggenheim Partners executive Mark Walter.
The price for the team is pegged at $2B, with another $150M tossed in for the teams stadium and other nearby assets.
According to a Forbes study of baseball team values published before the sale was announced, local television rights have exploded from $328M to $923M over the course of ten years, driven by cable sports channels. Taking into account deals that have not yet kicked in, and teams likely to earn lucrative new deals when existing deals expire, Forbes expects the number to explode again, all the way to about $1.5B in just three years.
One of the teams expected to feed the next explosion is the very same Los Angeles Dodgers which will be looking for a new rights contract to take effect in 2014.