The Best Team Money Can Buy: The Los Angeles Dodgers' Wild Struggle to Build a Baseball Powerhouse by Molly Knight Read Free Book Online

hundred million to buy the Dodgers. And he’s a baseball fan!” Had the team gone to auction the following day as planned, Kasten suspects the Guggenheim group would have been outbid.“We might not have won,” said Kasten.“Both of the other groups were prepared—and we know this for sure for other reasons—that they were prepared to go a lot higher.”
    Cohen was not without regret. The day the Dodgers deal closed in Los Angeles, he flew in from New York and hung around the hotel where the contracts were being signed, just in case the sale fell through. It didn’t. And it was a good thing for the city of Los Angeles that Cohen didn’t end up owning the Dodgers on the heels of the McCourt debacle. The Securities and Exchange Commission had been investigating Cohen for insider trading for seven years before filing lesser charges against him for failing to prevent his employees from committing fraud, just four months after the Dodgers sale was finalized. The U.S. attorney for the Southern District of New York said that Cohen’s firm had created a “culture of corporate corruption,” something Dodger fans felt they were already acquainted with. Cohen pled guilty and agreed to stop managing other people’s money. He was fined $1.2 billion.
    The public never knew about Cohen’s offer.Walter says he declined to set the record straight because he didn’t care that people thought he had overpaid. He was content in his conviction that he had made a good deal. When a group led by Houston businessman Jim Crane had bought the Astros for $680 million in May 2011, an alarmed Kasten had called Walter.“I have some bad news,” Kasten said. “The Astros just sold for seven hundred million. We might have to pay a billion to get the Dodgers.” Walter laughed. Getting the Dodgers for a billion would be a steal, he told Kasten.
    Walter knew that experts were wildly undervaluing the ball clubbecause they failed to anticipate the tidal wave of cash that would pour into Chavez Ravine when the Dodgers signed their new television deal. Financial observers didn’t grasp that baseball’s TV revenue was surging toward heights that would dramatically alter the worth of franchises. Walter understood the salient point that fiscal gurus seemed to miss. And that was that no one watched television live anymore—except when they watched sports. The invention of TiVo, DVR, premium on-demand channels, and Internet streaming sites like Netflix and Hulu meant that time-strapped consumers never had to sit through another commercial again if they didn’t want to. But people still wanted to watch sports in real time. Advertisers understood this, which is why they paid a premium for spots during high-rated games and matches they thought were least likely to be fast-forwarded through.
    When first determining the baseline value of the Dodgers in his head, Walter didn’t count how many tickets the team was selling each year or how their jerseys and caps were faring on the open market. He set the starting point on simple population arithmetic. Walter knew the real money was in the television deal, so he compared the L.A. and Houston markets. Houston had 2.1 million households. The Los Angeles metro area had almost three times that amount. The Astros had sold for $680 million. In Walter’s mind, that meant the Dodgers were worth at least three times that amount on their media rights deal alone. The three hundred acres of land surrounding Dodger Stadium and the fact that the club often led the majors in attendance were perhaps worth another billion or two. The world thought he was overpaying. Walter believed he was getting a bargain. “Here was this baseball team, a global brand, a little bit tarnished recently, in the second-biggest city in America, in the entertainment capital of the world when its TV contract was up in two years at a time when rights fees were exploding,” said Kasten. “All of those things at once and we thought, Wow. That has