Los Angeles Dodgers as a Business Opportunity
Los Angeles Dodgers as a Business Opportunity
By Paul Grossinger
$2 billion. And change. That was the Dodgers’ purchase price and all anyone can say is wow.
Considering that the Chicago Cubs and Wrigley Field were purchased for $900 million, it is a huge bet to make. But are the Dodgers a good enough business opportunity to justify that valuation?
Certainly, the Dodgers have not been maximized by outgoing owner Frank McCourt. There is room for important revenue growth in several areas. Most significantly, they are the only top-five baseball franchise that still needs to sign a new, huge TV deal. That should happen this year and be worth three-four billion over twenty years. Like the Los Angeles Angels, the Dodgers will use that TV money to launch a major spending spree in 2013 and 2014 free agency. Since they have very marketable stars in Clayton Kershaw and Matt Kemp, the Dodgers should retain supremacy in the massive Los Angeles baseball market.
Los Angeles is also poised to do much better on the field in the next few years, which should help put more fans in the seats. The Dodgers have a huge fan base but McCourt’s final years of ownership were such a mess that they took a serious toll on attendance. The Dodgers have a base of young stars and will have the resources to fill in the holes in their roster very quickly.
So, $2 billion is a lot of money for a baseball team. It shatters all estimates for what most felt the Dodgers were worth. But with better on field play and a new, lucrative TV deal, the team’s new owners should get their money’s worth over time.
Paul Grossinger writes for The Best Sports Blog.
