Basketball legend Magic Johnson used one of his trademark assists to score the controlling stake in the Los Angeles Dodgers for Guggenheim Partners Chief Executive Mark Walter.
In recent years, Johnson's exploits in business have come to rival his legendary accomplishments on the basketball court, and this latest transaction means he'll now become the public face of one of baseball's most historic franchises. But make no mistake, it was controlling partner Walter's money that fueled the record $2 billion transaction.
The sale easily eclipsed the old record price for a sports franchise, set three years ago when Steven Ross bought the Miami Dolphins for $1.1 billion. Johnson also helped Walter beat out a bid by SAC Capital's Steven Cohen.
According to a person involved with the process, the auction had been expected to take place Wednesday. Blackstone had asked the parties to submit sale contracts last week and deliver their initial offers by Tuesday morning, since approval of the bidders from Major League Baseball was expected to come easily on Tuesday afternoon. When the offers arrived, the bid from the Johnson-Walter group was so much higher than the competing offers, it essentially took the franchise off the block almost instantly.
The person said the other offers, which were perceived as opening bids, were in the range of $1.5 billion, some 25% less than the Johnson-Walter bid. As a result, the other bidders were never given a chance to match, and the deal was wrapped up by Tuesday evening. The bid was described as a "100% cash offer." Mr. Walter is making a significant personal contribution to the purchase price, with Guggenheim Partners, of which he is chief executive, playing a substantial role in financial contribution.
The deal is preliminary and still has to go through a complicated closing process and receive approval from the U.S. Bankruptcy Court in Delaware.