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SportsThe Schmuck Stops Here

Dodgers sale could prove downside of franchise inflation

Los Angeles DodgersBaltimore OriolesMarketingBaseballMajor League BaseballMagic Johnson

      Congratulations to Magic Johnson, Stan Kasten and the rest of the new ownership group that just bought the Los Angeles Dodgers from Frank McCourt for a reported $2 billion. They will bring the Dodgers out of bankruptcy and restore some stability to the organization, but the price tag leaves room to wonder if they'll be able to keep the team competitive.

      This is the question I've posed to a number of the people who are sure the Orioles would be better off under new ownership. Though I don't necessarily disagree with that, I generally point out that the only way the Orioles will be sold is if the Angelos family gets a huge price -- not $2 billion, of course, but a huge price relative to this market. Whoever has to pay that price will need to borrow a great deal of money, which will leave the team highly leveraged and burdened with a huge debt service.

     That's exactly what is going to happen with the Dodgers, and experts already are questioning whether the new ownership group will be able to afford to operate the team at a large-market level after the deal closes.

     The group will get some relief by selling back half the land around the ballpark to McCourt for $150 million and the massive new TV deal that was blocked by Major League Baseball will kick in and further allow some of that debt to be offset. Still, we're talking about a deal that is nearly twice as large as any professional sports team has been previously sold for in the United States.

     For it all to make sense, I'm guessing the Dodgers also are going to have to build a new stadium like the palace that just went up in the Bronx.

     That wouldn't be an issue here, but whoever bought the Orioles would likely have a very difficult time meeting baseball's debt limits while assembling the high-priced team that fans think they might get in a post-Angelos era.

Copyright © 2014, The Baltimore Sun
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