Many sports franchises are worth several billion dollars. Still, unless the team sells, it doesn’t mean owners have that kind of capital lying around. Once in a while, those high price tags are transferred to new owners. Despite values growing ever higher, the LA Dodgers’ ownership group, led by Magic Johnson, remains the highest buyout to this day.
Magic Johnson & Co. buy the LA Dodgers
Save for the Boston Red Sox and New York Yankees, perhaps no team has a richer history than the Dodgers. From their East Coast roots in Brooklyn to a place in the Jackie Robinson story, the franchise has been a part of several big moments in MLB history. Add the market they play into that, and their value is sky-high.
In 2012, according to Bleacher Report, Dodgers owners Frank and Jamie McCourt had to sell the team following an ugly divorce. Johnson had long expressed interest in owning a team past the minuscule shares he previously held with the Lakers. So he stepped up to bat.
Johnson led the Guggenheim Baseball Management company to buy the team for $2.15 billion, details The Wall Street Journal. With a group of deep-pocketed investors and a man who embodies LA sports, the sale went well. Johnson and Co. showed no problems spending Yankee-like amounts to acquire the best MLB talent. The $2.15 billion price tag was just the start.
Buying a sports team
The Dodgers are one of the most valuable sports teams. But they aren’t the most valuable. Historic franchises like the Cowboys, Yankees, and even Lakers have rich histories putting them in a league of their own. However, just because they are more valuable, it does not mean that they’re going to switch ownership.
All of the aforementioned teams are essentially family businesses. Jerry Jones, the Buss family, and the Steinbrenners put their all into the teams, making them cash cows. For hobbyist owners, buying a team is another page in a long portfolio. The most valuable teams rarely move ownership.
Just two years after the Dodgers’ sale, another LA team went on the market. Clippers owner Donald Sterling got banned from the NBA for rampant racism and hateful language. The team was eventually sold to Microsoft mogul Steve Ballmer for $2 billion.
The Clippers had a checkered past of mostly losses, but their value was still sky-high thanks to recent success and their popular, large market. Owning a team in LA immediately raised the valuation; if the Clippers reached new heights, their value would, too.
As much value as sports teams possess, they are rarely actually bought and sold. With many millionaires clamoring for an investment, there might be just one or two transactions in a given year. Add a historic team like the Dodgers to that mix, and the prospect of owning them becomes even rarer.
Magic Johnson helped make history when he led the Dodgers acquisition. He was not the wealthiest owner in the group. But he helped bring the Dodgers into a new era as a beloved black athlete in a world where sports ownership is dominated by white businessmen.
The investment is paying off. While the Dodgers are yet to win a World Series, they are one of the league’s best teams. If Johnson can bring another championship LA, his legacy in the city will be even greater.