Might Rupert Murdoch's tumultuous reign over the Los Angeles Dodgers be nearing an end?
News Corp. officials are in preliminary, informal discussions with longtime team owner Peter O'Malley and Casey Wasserman, 26-year-old scion of the Wasserman entertainment fortune, regarding a possible sale of the team and its facilities, including Dodger Stadium, according to sources close to the talks.
"No one is saying anything publicly, but Murdoch wants to sell the team," said one well-placed source, speaking on condition of anonymity. "It's definitely for sale, and the Wassermans and Peter O'Malley are interested in buying it. "There are a lot of things that would have to happen," the source said. "It's a long, drawn-out process that probably would include several other people. But there is no question there are discussions underway." O'Malley, contacted through his Los Angeles office, would neither confirm nor deny his or Wasserman's interest in buying the team that was in his family for more than 50 years. "The Wasserman family and our family have been good friends for years," O'Malley said. "Casey Wasserman and I talk a great deal about sports when we meet, and we meet frequently. That's all I can say at this point." Wasserman owner of the Los Angeles Avengers of the Arena Football League and grandson of former Universal Studios head and MCA co-founder Lew Wasserman was reluctant to elaborate, but like O'Malley, did not offer a denial. "I'm not going to comment," Wasserman said. "This is getting out of hand."
Murdoch, the Australian media baron who owns the Fox television network, bought the Dodgers from O'Malley in March 1998 for a reported $311 million. The deal gave the Fox Sports Network the lucrative rights to Dodger broadcasts and helped Fox Sports solidify its presence in the hotly competitive Southern California TV market.
Recent reports have appraised the Dodger franchise at about $400 million, a tidy appreciation in the three years since Murdoch assumed control. But the team which has a player payroll of $109 million, second highest in Major League Baseball lost an estimated $30 million last season and is reported to be on track to lose as much as $40 million this season. This is despite attendance that has exceeded more than 3 million in each of the past five years. "Murdoch is not in the business to lose money," the source said. "And his main interest is his media empire. I think he'd have no problem with selling the team if he could keep the broadcast rights. That (separating out the broadcast rights) would make everything more complicated." Answering a question from co-host Doug Krikorian on radio station KSPN's "McDonnell-Douglas" sports talk show last week, Wasserman admitted there have been preliminary discussions about a possible pitch to Murdoch about the Dodgers. News Corp., in a prepared statement released through the Dodgers' front office, denied that any official discussions have taken place. "Contrary to recent news reports, News Corporation has not had any conversations regarding the sale of the Los Angeles Dodgers," the statement read. "Under Major League guidelines, News Corporation would have to notify the Office of the (baseball) Commissioner of its intent to sell the franchise. No such notification has been given, or is contemplated."
Tom Burnett, a market analyst for New York City broker Merger Insight, said that if News Corp. is indeed interested in selling the Dodgers, it might be connected to Murdoch's plan to buy El Segundo-based Hughes Electronics Corp. from its parent, General Motors Corp. Hughes owns the DirecTV satellite franchise, an entity that Murdoch covets to complete his worldwide satellite network. (See related story on page 3.) "It might be that (Murdoch) wants to raise liquidity to make a run at Hughes; we know he wants that," Burnett said. "That would be the main reason to me that he would want to sell the team if he, in fact, is."
David Carter, principal owner of the Sports Business Group, a Los Angeles-based consulting firm, said that "on the surface" it doesn't look like a good time for anyone to be buying a baseball team, especially O'Malley, who Carter said sold the team largely out of frustration with the costs of keeping a team competitive in today's market. "The fundamentals of keeping up with the Joneses haven't changed," Carter said. "Plus, there is the (possible players' strike) that I think is about 50-50 it may happen (at the end of next season). Why would you spend several hundred million dollars on a team that may end up not playing for all or part of a season?"
In addition, Carter pointed out that News Corp., which reported sales of nearly $10 billion last year and has a market capitalization of close to $40 billion, would hardly need to sell the Dodgers in order to make a bid for DirecTV. "Finances wouldn't seem to be the issue," Carter said. Looking beneath the surface, though, Carter sees possible reasons for an O'Malley/Wasserman bid for the Dodgers and for Murdoch to have a willingness to sell if he could keep his broadcast rights. "There must be more to it, because it doesn't make sense to buy a baseball team right now," he said. "The (National Football League) may be enamored of an O'Malley/Wasserman relationship to bring a franchise back to L.A. "It may be the hidden agenda here: to establish the NFL's presence again in L.A. and place a stadium in Chavez Ravine next to Dodger Stadium," Carter said. "Wasserman has some experience now running a professional football team and O'Malley is a respected name in professional sports. They would have a potential stadium site, experience and name identification that may be attractive to the NFL." Carter said Murdoch might be motivated to part with the Dodgers for public relations reasons. "From a public relations standpoint, the Dodgers have become a problem for News Corp.," he said. "While it may not be significant how much money company-wide they lose on the Dodgers, there is a perception that Fox has not understood the nuances of running a team, or the P.R. behind running the team, or the significant cultural connection the Dodgers have with this area. "They (News Corp.) are perceived by a lot of fans as a media company who, although they know how to do broadcasting right, maybe doesn't understand the community," Carter said. "Maybe there's a fear it could eventually affect their core media business in the second-largest media market in the country."
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