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Dodgers reach record deal with Magic Johnson group

By Ronald Blum

Associated Press

Published: Tuesday, March 27 2012 10:35 p.m. MDT

CORRECTS DAY OF ANNOUNCEMENT - FILE - In this June 9, 2009, file photo, Stan Kasten, at the time the president of the Washington Nationals, attends a news conference in Washington. Los Angeles Dodgers owner Frank McCourt has announced an agreement Tuesday night, March 27, 2012, to sell the bankrupt team for $2 billion to a group that includes former Lakers star Magic Johnson and former Atlanta Braves and Nationals President Stan Kasten.

Manuel Balce Ceneta, File, Associated Press

NEW YORK — A group that includes former Lakers star Magic Johnson and longtime baseball executive Stan Kasten agreed Tuesday night to buy the Los Angeles Dodgers from Frank McCourt for a record $2 billion.

The price would shatter the mark for a North American sports franchise, topping the $1.1 billion Stephen Ross paid for the NFL's Miami Dolphins in 2009.

Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, would become the controlling owner.

The deal, revealed about five hours after Major League Baseball owners approved three finalists for an intended auction, is one of several steps toward a sale of the team by the end of April. It is subject to approval in federal bankruptcy court.

As part of the agreement, the Dodgers said McCourt and "certain affiliates of the purchasers" would acquire the land surrounding Dodger Stadium, including its parking lots, for $150 million.

The acquiring group, called Guggenheim Baseball Management, has several other investors, among them Mandalay Entertainment chief executive Peter Guber. Kasten is the former president of the Atlanta Braves and Washington Nationals.

"I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles," Johnson said in a statement.

The 52-year-old Johnson played 13 seasons for the Los Angeles Lakers, winning five NBA championships and three MVP awards.

He retired from the NBA in 1991 after being diagnosed with the HIV, the virus that causes AIDs. He briefly came out of retirement in 1995-96 and did a short stint coaching the Lakers. Since leaving basketball behind he has been hugely successful in business, investing in movie theaters, a production company and restaurants.

He has also been activist in the fight against HIV.

McCourt paid $430 million in 2004 to buy the team, Dodger Stadium and 250 acres of land that include the parking lots, from the Fox division of Rupert Murdoch's News Corp., a sale that left the team with about $50 million in cash at the time. The team's debt stood at $579 million as of January, according to a court filing, so McCourt stands to make hundreds of millions of dollars even after a $131 million divorce payment to former wife Jamie, taxes and legal and banking fees.

Kasten is expected to wind up as the team's top day-to-day executive.

The other two finalists were:

— Stan Kroenke, whose family properties own the NFL's St. Louis Rams, the NBA's Denver Nuggets, the NHL's Colorado Avalanche and Major League Soccer's Colorado Rapids, and who is majority shareholder of Arsenal in the English Premier League.

— Steven Cohen, founder of the hedge fund SAC Capital Advisors and a new limited partner of the New York Mets; biotechnology entrepreneur Patrick Soon-Shiong; and agent Arn Tellem of Wasserman Media Group.

It remains to be seen whether Major League Baseball will challenge the deal in U.S. Bankruptcy Court in Delaware, where the case is before Judge Kevin Gross.

Under an agreement reached by MLB and McCourt in November, a private auction was to be held among the finalists and McCourt was to select the winner by Sunday. The sales agreement is to be submitted to the bankruptcy court by April 6, ahead of a hearing seven days later, and the sale completed by April 30, the day McCourt is to make the divorce settlement payment.

"This agreement with Guggenheim reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community," McCourt said in a statement.

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