Is the $1.2 Billion Offering to Buy the Los Angeles Dodgers a Real Offer?

The Los Angeles Times reported Thursday that Dodgers owner Frank McCourt was offered $1.2 billion from Bill Burke, the founder of the LA Marathon, with backing from Chinese investors for the rights to purchase the Los Angles Dodgers. The deal is supposed to be a straight cash deal. The deal is to include all holdings of the Dodgers, the parking lots, media rights, Dodger Stadium, and the team itself.

Burke’s record bid to buy a Major League Baseball team was given to McCourt on Tuesday and neither side has publicly commented on the offer. The offer is good for 21-days and then the offer will be removed. Forbes listed the Dodgers’ value at $727 million in 2010, an increase of value of only $7 million from Forbes listing in 2009.

McCourt bought the Los Angeles Dodgers in 2004 from NewsCorp (Rupert Murdoch) for $430 million after failed bids to buy the Boston Red Sox, Anaheim Angels, and Tampa Bay Buccaneers.

Since October of 2009 Frank McCourt has been in divorce proceedings with his wife and former CEO of the Dodgers’, Jamie McCourt. Jamie McCourt has asked the courts to force the sale of the Dodgers’ as part of the divorce process and split of personal assets between the McCourt’s. Frank McCourt has tried to retain the Dodgers and show sole ownership of the team separate from his wife which was rejected by the courts. A divorce settlement and agreement between the McCourt’s was reached in June of this year centering upon a 17-year television deal between Fox and the Dodgers. Bud Selig and MLB denied the television deal. Frank McCourt then filed for Chapter 11 Bankruptcy protection at the end of June.

Is this offer real?

Speculation centers on the motive and purpose of the offer by the Burke Group. Why would the Burke Group pay $400 million more for the Dodgers than the thought worth? Is this a tactic set forth by Frank McCourt with Bill Burke’s help to prove to MLB, bankruptcy courts, and divorce courts that he has not lowered the value of the Dodgers?

Bud Selig and Major League Baseball have lost confidence in Frank McCourt. In April Selig appointed Tom Schieffer to oversee the Dodger financial activities; Schieffer is a former executive with the Texas Rangers. Selig and Schieffer are waiting out the McCourt divorce and patiently watching over Frank McCourt’s every move.

Not only has MLB lost confidence in Frank McCourt but the city of Los Angeles has lost confidence in Frank McCourt as well due to his dealings with the Dodgers as evident by the lack of attendance during the 2011 season. According to Major League Baseball attendance numbers, during the 2010 season the Dodgers ranked third in MLB in attendance behind the Yankees and Phillies. The Dodgers averaged 43,979 fans per home game for a total of 3,562,320 in fan attendance for the season. To date the Dodgers have had 2,604,055 fans attend games for an average of 36,676 fans per home game. Their home attendance has dropped to 10^th in MLB. This puts the second biggest team in MLB, in terms of media market exposure (or third if you count the New York Mets), behind smaller market teams like the Minnesota Twins (#4), St. Louis Cardinals (#6), and the Milwaukee Brewers (#9). This even puts them behind the Angeles (#5). The Dodgers are no longer number one in their own market.

McCourt may be able to take this offer into divorce and/or bankruptcy court to show that there are investment groups out there willing to buy the Dodgers and pay more than the Forbes listed price. The smoke and mirrors or dog and pony show of an offer is a farce. Reality is Frank McCourt is stuck and needs the Dodgers to stay financially afloat and he needs the courts, the Dodger fans, and Bud Selig to back him… and it’s not happening for him.

The Burke Group offer will come and go. If and when McCourt is forced to sell the Dodgers he will try to leverage the Burke Group offer as a selling point. Look for the Dodgers to sell closer to $800 million if Frank McCourt is lucky. 

What would you like to clarify? Don't forget to sign up for email notifications and as a reader/follower. Follow HogManInLA on Twitter at: http://twitter.com/HogManInLa