Field of Very Expensive Dreams

Tonight the Mega Millions jackpot reached $640,000,000. After tax, the winner would have about $400m, which sounds like an awful lot of money to me. In the same week that the jackpot reached that dizzy height, we found that those post tax proceeds would buy a one fifth share in a baseball team.

Earlier this week, the Los Angeles Dodgers were sold for $2bn. This one of the five baseball teams in the state of California. They last won the World Series in 1988, since then three other teams in California have won the title. (A’s in 1989, Angels in 2002, Giants in 2010)

1989-world-series-athletics-vs-giants-on-dvd-5d63

Frank McCourt bought the franchise for $430m in 2003, using debt rather than cash to make the purchase. He and his wife then funded a lavish lifestyle on the back of the team’s cash-flow. The McCourts divorced with the largest alimony settlement in California history. Part of that settlement involved Frank buying his wife’s share of the team for $130m. This week that looks like a very low price to pay for 50% of a $2bn team. After paying his debts and alimony, Frank walked away from the Dodgers with $1bn profit.

Jackie

A team whose story echoes back through the ages of baseball can now leave the shadows of a couple who saw it as a cash cow. The Dodgers who gave us Jackie Robinson and Sandy Koufax can once more focus on being a baseball team. Let us hope they become the state’s second most successful franchise and overtake the Giants’ six wins.

Whoever won the lottery tonight should know that all the money they obtained is dwarfed by the profits McCourt made by selling a moribund team whose purchase  price he had to meet by borrowing.

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Published in: on 30 March, 2012 at 23:54  Leave a Comment  

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