A potential deal in which a South Korean sovereign fund would invest in the Los Angeles Dodgers places a $3 billion valuation on the Major League Baseball team, according to two sources with knowledge of the negotiation but not authorized to speak about them publicly.
Three years ago Guggenheim Baseball Managementpurchased the Dodgers from Frank McCourt. That deal placed a value of $2 billion on the team and Dodger Stadium, and a value of $2.3 billion including 260 acres of surrounding real estate. The current negotiations with the South Korean investors is for about 20% of the team and stadium but does not include the nearby real estate andSportsNet LA, the regional sports channel created by by the Dodgers and Time Warner Cable TWC -0.55% in early 2013. The deal the Dodgers have with the RSN pays the team a total of $8.35 billion over 25 years with the money guaranteed by Time Warner Cable.
MESA, AZ – MARCH 11: Zack Greinke #21 of the Los Angeles Dodgers pitches against the Chicago Cubs on March 11, 2015 in Mesa, Arizona. (Photo by Lisa Blumenfeld/Getty Images)
The Los Angeles Times reported in January that the Dodgers were in negotiations to sell a minority stake to a group of South Korean investors and said The Korea Joongang Daily, one of two South Korean newspapers that first reported the talks, said the investment group hoped to buy 20% of the Dodgers for about $370 million, which would value the Dodgers at $1.85 billion. The Times article also said that one of the partners in the team, Todd Boehly told the Times in December 2012 that Guggenheim Baseball valued the Dodgers at $3 billion.
The Dodgers had no comment on the South Korean negotiations. But evidence that Boehly was accurate about the price can be gleaned from the recent sale of a small piece of the Chicago Cubs. In a deal consummated last month, the Ricketts family raised a total of $150 million of equity to help fund the Wrigley Field by selling minority interests that valued the baseball team at $1.8 billion–the richest price ever for a non-controlling interest in a sports team. A year ago Forbes valuedthe Dodgers at $2 billion and Cubs at $1.2 billion.
In this business, valuations can get old in a hurry.
