With the news of the Magic Johnson-Stan Kasten group purchasing the Los Angeles Dodgers for a reported $2 billion comes a number of extracurricular repercussions, including having an affect on the valuation of other franchises around the league as well.
Adam Rubin of ESPN New York is reporting that the New York Mets could actually now be worth upwards of $1.1 billion after this Dodgers deal, only a week after Forbes gave them a price tag of around $719 million.
Spots Business consultant Marc Ganis with the commentary:
"Let me tell you, if the Dodgers are worth $2 billion, the Yankees are worth $3.5 to $4 billion," Ganis said. "The Red Sox are worth $2.5 billion. And the Mets go from being worth, say, in the low $1 (billion)s to the mid- to high-$1 (billion)s."
"This only relates to the top, top of the food chain," Ganis said. "It's really just the big-market clubs that have unique local broadcasting opportunities."
The Dodgers new TV deal is certainly factored into to the team's approximate value, but as Michigan sports management professor Rosentraub told ESPN Los Angeles' Arash Markazi, this deal wasn't necessarily based on on balance books, or even logic for that matter.
"It's the craziest deal ever; it makes no sense. That's why you saw so many groups drop out...Nobody came up with this number. Under the most favorable circumstance you broke (even at) $1.1 billion, with $1.4 billion getting crazy. Now you're up in the $2 billion range, which is over $800 million more than what pencils out for a profitable investment for a baseball team. If making money doesn't count, this is a great move. But now we're into buying art and I can't value art. I can just run the model numbers and this doesn't make sense."
By diving head first into this deal Magic Johnson and Co. have created great elation and expectations for the Dodgers and their fanbase, but also the skepticism that comes along with throwing billions of dollars at an entity coming out of bankruptcy. Only time will tell if this deal will be lucrative for the new owners in the long run.
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