Monday, November 14, 2011

Frank McCourt Will Be a Billionaire, Albeit Briefly

"My preciousssss."

From "Economists: $1B for Dodgers is realistic" by Arash Markazi at

A record price tag of $1 billion can be expected for the Los Angeles Dodgers, Dodger Stadium and the surrounding real estate, according to several sports economists following the team's upcoming sale.

"If you're talking about the asset value of the Dodgers franchise, the stadium, the parking lots and the surrounding acreage, I think a number in neighborhood of $1 billion is reasonable," Andrew Zimbalist, a professor of economics at Smith College, said last week. "I believe the reasonable or final offer will be $900 million to $1 billion."

One of the biggest reasons for the Dodgers' value is all the undeveloped real estate surrounding Dodger Stadium, which sits on 275 acres of land that is largely used for parking.

Three years ago, Dodgers owner Frank McCourt outlined a $500 million project around the stadium that would include parking structures, a Dodgers museum and a plaza behind center field with year-round shops and restaurants. Such a sweeping project could add more revenue streams for the future owners and potentially raise the price of the team.

"As a comparison, the Chicago Cubs went for $845 million two years ago, and I think most people looking at the revenue streams between the Dodgers and Cubs would have them being pretty comparable," said Victor Matheson, a sports economist and an associate professor of economics at the College of the Holy Cross in Worcester, Mass.

"It's probably more in favor of the Dodgers because they have such a huge area that could also be redeveloped. The Cubs' deal includes Wrigley Field, but that's tied into the city grid there so there's only so much you can do. The Dodgers really do have space there for other projects."

Think Jamie regrets settling for a measly $131 million?

photo by Brian Vander Brug/LA Times


Fred's Brim said...

I haven't been keeping up on all of the new ownership rumors. Has there been any more talk of the publicly-owned model that came up last season?

Josh S. said...


Buster Olney better not be lying to me!

Fred's Brim said...


Fred's Brim said...

And Matty might be getting paid more than Jamie!

Mr. LA Sports Czar said...


Greg Hao said...

Actually, Jamie is quite smart for taking the cash and run.

She's getting $131MM of cash (net net, e.g. the amount that Frank would have to pay her as well as the IRS is probably something closer to $165MM, using a VERY conservative 25% tax bill, their smart tax attorney will find a way to get that number as low as possible).

Frank is also promising, per their agreement, to indemnify Jamie of any potential tax liabilities pre-settlement. The McCourts took something on the order of $150MM in distributions through the use of "loans" in order to get around paying income taxes on that. So, again, if we use that 25% rate, this results in an additional $37.5MM not counting any other penalties that would be applied retroactively. Why don't we peg that at 10% (almost certainly higher but I'm too lazy to look the shit up). So, add another $15MM.

So we're looking at a total of:
$131MM cash
$83MM or thereabouts in taxes and other charges
Not to mention Jamie gets all properties other than the 2 Massachusetts properties. However, since they have mortgages attached to them, why don't we just use a placeholder of $0.

So Jamies walks away with over $200MM AND no more headaches about any potential litigation with the IRS or any other party. Since we all know Jamie McCourt has been the risk averse half of the marriage, I'd say she's walking away pretty happy.

Not to mention nobody has any idea how much cash Frank is going to walk away with even if the Dodgers sell for north of $1B and Jamie will the first creditor once the deal closes. More than likely, Jamie will end up with more cash than Frank McCourt.

MeanieBreanie said...

Ken Rosenthal at Fox Sports is in sync with Buster Olney. Matty is very close to inking an 8 year contract worth $160 Million.

Git R Done!

Mr. LA Sports Czar said...

Kenley Jansen got two third-place votes in the NLROY.