The New-Look Dodgers: 'We Owe Fans a Winner'
With unprecedented access, exclusive interviews and photos, the new ownership team tells THR about its plan to woo Hollywood with a glitzy makeover and business deals that could make that $2.15 billion purchase price actually pay off.
The Aug. 17 issue of The Hollywood Reporter magazine has four split-run covers, featuring former manager Tommy Lasorda and manager Don Mattingly; outfielders Matt Kemp and Andre Ethier; owners Peter Guber and Magic Johnson; and pitcher Clayton Kershaw.
Peter Guber didn't want to buy the Dodgers. He had considered it once before, and it didn't work out. Guber had been approached in the early 2000s and declined to join Boston businessman Frank McCourt in his effort to purchase the team from News Corp. So when three different groups asked Guber last fall to help try to buy the Dodgers from the embattled McCourt, he turned each down flatly. After all, the former head of Sony Pictures -- he greenlighted such hits as Sleepless in Seattle and A League of Their Own -- figured he already had his hands full overseeing his six minor-league baseball teams and the NBA's Golden State Warriors, which he had bought with a partner a year earlier.
But when longtime friend and business partner Earvin "Magic" Johnson called Guber to discuss the Dodgers, things were different. The two had worked together in the 1990s when Sony partnered with Johnson to launch his eponymous chain of movie theaters, and the former Los Angeles Lakers great is a co-owner of Guber's minor-league baseball club in Dayton, Ohio, that has sold out 897 consecutive games, a record for professional sports.
"Magic called and said, 'Come on, we've been so lucky together, we've been so good together, let's do it, let's do it, let's do it,' " says Guber. So after meeting with Johnson, Guggenheim Partners CEO Mark Walter and others in the ownership group, Guber decided to join the team that would make the $2.15 billion winning offer, which more than doubled the previous record price for a North American sports franchise: "I said, 'F--- it, OK,' and my wife thought it was absolutely insane. She said, 'Are you crazy?' "
On a hot, cloudless June afternoon, Dodgers president Stan Kasten stands in a chilly Dodger Stadium office having a lively conversation with Peter O'Malley, the team's much-loved former owner. At issue: the eight variations of Dodger blue that now adorn team merchandise.
"The shade of blue has changed," notes O'Malley, 74, whose father, Walter, moved the team from Brooklyn to Los Angeles in 1958 and who remains for many fans the strongest link to the organization's storied history. "Wherever you can, you ought to try and make it the same."
Kasten agrees it would be good to winnow the blue hues to one. The detail might seem small, but the fact that O'Malley, an infrequent visitor to Chavez Ravine during McCourt's rocky seven-season tenure, is now involved in these kinds of discussions says a lot about how much things have changed in the short time since Guggenheim Baseball Management took over the team.
The transition hasn't been perfect -- the new owners have yet to explain their plan for the stadium, and many have cited a recent Forbes valuation of the team at $1.4 billion as evidence that Guggenheim overpaid. But as Dodger Stadium celebrates its 50th anniversary, many longtime observers say the team is primed for a resurgence. Matt Kemp, Clayton Kershaw and Andre Ethier, the franchise's marquee players, have been signed to new contracts, television rights deals for professional sports continue to explode in value, and the Dodgers' current TV arrangement expires at the end of the 2013 season. So while the $2.15 billion spent to acquire the team is extraordinary, it's also reflective of opportunities in baseball ownership that might not have existed a decade ago. Plus, the Dodgers have a mystique -- the sort imbued by a history of six World Series titles and transformational players such as Jackie Robinson, Sandy Koufax and Fernando Valenzuela -- that has generated a diverse fan base with strong support from Latinos. Now, with Kemp and Ethier as the pinup-ready faces of the organization, the team is poised to solidify its place as the West Coast's answer to the New York Yankees, subject to the same intense attention and scrutiny.
"What we do in this business -- everything is in a fishbowl, everything is under the magnifying glass. It's just part of this business," says Kasten, a baseball veteran who has a small stake in the team; other owners alongside Johnson and Guber are Todd Boehly and Bobby Patton of Guggenheim. (New York- and Chicago-based Guggenheim is co-owner with Pluribus Capital Management of Prometheus Global Media, the parent company of THR.)
Already, sports-business insiders have speculated whether the Dodgers will score the richest TV deal ever in pro sports. According to a study by independent consultancy Desser Sports Media for THR (see sidebar), should the team follow the path of the Yankees and start its own network during a 20-year initial term, the Dodgers could generate $8.5 billion in TV revenue. "[The valuation] goes a far distance to explain the actions of various parties," says Ed Desser, who led the study. "There is certainly no question that there is substantial value there."
Even if the team doesn't start its own network, a bidding war for TV rights is expected between Fox Sports, which now airs games along with L.A'.s KCAL, and Time Warner Cable, which signed the Lakers to an agreement last year that could be worth $5 billion over 25 years. Kasten says the organization enjoys a good relationship with Fox Sports, though if a deal cannot be struck, the team would "start talking to other people. There are a number of alternatives that work in different places, and it remains to be seen what the perfect or the best plausible answer is here." Starting Oct. 15, Fox Sports will have an exclusive 45-day negotiating period, though sources say preliminary discussions already have begun. The company declined comment.
Well before the team's TV deal expires, a remodel of the well-worn Dodger Stadium is expected to begin. The iconic 56,000-seat venue that has been the site of countless historic moments -- from Koufax's 1965 perfect game and Kirk Gibson's dramatic home run in the 1988 World Series to visits from Pope John Paul II and The Beatles -- is in need of changes big and small. During the off-season, the team is expected to upgrade the stadium's water and power systems and improve mobile phone service by adding Wi-Fi to the notoriously technology-unfriendly ballpark -- the third-oldest in the major leagues behind Boston's Fenway Park and Chicago's Wrigley Field. To that end, on Aug. 6, the Dodgers hired Janet Marie Smith, an executive who has worked for teams including the Baltimore Orioles and Boston Red Sox, to oversee upgrades to the stadium.
Bigger changes include a potential $100 million-plus renovation that might add more kid-friendly amenities, new restaurants and a Dodgers museum. "I think more and more, fans expect, and fans are better served by, additional things in ballparks," says Kasten. But Guber, CEO of Mandalay Entertainment Group, cautions that the new owners won't rush to jump into a redevelopment plan, "All of us made our money the old-fashioned way: We've earned it hard, so we spend it carefully."
Then there is the Dodger Stadium land, which long has captivated developers. The stadium is set on 300 prime acres, much of it flat asphalt parking lots. O'Malley tried to put an NFL stadium there, and in 2008, McCourt announced a $500 million retail development plan. Current ownership has said there are no immediate plans for the lots (or to build a new stadium, as some have proposed), but long-term, many believe the team will build shops, eateries and bars around the ballpark.
"I think Dodger Stadium is one of the great L.A. experiences, but there is an opportunity to expand that experience," says architect Dan Meis, who designed Staples Center and several other professional sports venues. "It has some unique aspects to it, but that's where the opportunity is -- to really develop it and give people a reason to circulate around it."
Certain stadium improvements also would better court and serve the team's Hollywood fans. Stars such as Jason Bateman, Larry King and Alyssa Milano are regulars; showbiz attorney Howard Weitzman has season tickets; and the Zanuck family shares seats with manager-producer Michael Sugar, among others. (Dodger Stadium is a star itself, appearing in such films as The Naked Gun and Moneyball in part because it can pass, for better or worse, as a generic baseball stadium.) Observers say the team could better the experience for VIPs by improving terrible traffic conditions at the stadium and adding more premium seating. These days, the $400-a-seat Dugout Club, which is situated behind home plate and includes an indoor dining room and bar, is considered the celebrity-worthy section.
Indeed, Kasten suggests that Guber's relationships in Hollywood could help market the Dodgers, similar to how the industry's embrace of the Lakers has burnished that team's brand worldwide. Jeanie Buss, executive vp business operations for the NBA team, says a franchise needs to produce a winning team as well as make celebrities comfortable if the stars are to stick around. "Dr. Buss, my boss [and father], has always had the philosophy of being friendly toward celebrities so that they would feel comfortable at your event. But I've also been at events that weren't the Lakers, and you can invite celebrities and be very kind to them, but they aren't going to show up if it isn't a great event."