Part Ownership of Dodgers in the name of the Republic of Korea?

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According to reports out of Seoul, a group of South Korean investors is vying for partial ownership of the LA Dodgers ‘in the name of the Republic of Korea’–before opening day in April.

Last week, the Korea Joongang Daily and Naver Sports reported that a Seoul-based investment group was looking to buy a 20% stake in the Los Angeles Dodgers for about $370 million.

An unnamed source was quoted as saying:

“The consortium [of Korean investors] was formed when one of the five joint owners tried to sell his shares. The deal is expected to be worth about 400 billion won…and is set to be concluded before the season starts in April.”

Another source, identified only as “a law firm official,” made the lofty claim of bringing the national government on board for the ownership deal:

“The consortium aims to include the national pension fund or sovereign wealth fund, which can represent the country, because it wants to become a co-owner of the club in the name of the ‘Republic of Korea’”.

The coverage also stated that the Korean consortium would have no control over the team regarding baseball-related decisions and that those calls would continue to be made by Mark Walter, who has 100% control over baseball decisions among the ownership group –which includes Magic Johnson, Mark Walter, Peter Guber, Todd Boehly and Bobby Patton.

The LA Times “confirmed” the story with their own unnamed source:

The person said the talks were “progressing” but otherwise declined to characterize how advanced the negotiations might be or handicap the chances of reaching a deal.

Dodgers President Stan Kasten then chimed in –declining to say much of anything really.

“People talk to us all the time about all sorts of things,” Kasten said. “We never publicly discuss any of it.”

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Numbers and Conditions Coming under Scrutiny

Unnamed sources are problematic at best; you walk a thin line of credibility with no one to confirm a report –especially when loose ends start to fray.

Granted, back in 2012 there was talk of the Dodgers looking for a “strategic partnership” with either Mexico or South Korea –both large fan bases– but nothing ever came of it.

According to a Sunday piece by LA Times columnist Steve Dilbeck, the reported numbers being thrown around don’t make much sense:

A 20% share at that figure would value the Dodgers at $1.85 billion, which is less than the $2.15 billion the Dodgers ownership group paid for the team in 2012.

Dodgers part-owner Todd Boehly told The Times back at the end of 2012 that Guggenheim Baseball Management already valued the team at $3 billion. That would make a 20% stake – assuming the Dodgers don’t believe the value of the team hasn’t risen in the last two years – at $600 million. That’s a $230-million difference from the Joongang figure.

Dilbeck also questions whether any investor would be willing to shell out that kind of money and have no control over operations.

The other aspect that seems odd is the South Korean group would not have control of the team. Is this what the stupid-rich do? Drop maybe $600 million into a venture and then step back and say take care of my investment? What are the Dodgers, a mutual fund?

Dibeck goes on to jest that for that kind of money you could afford a third of the teams in the MLB and have total control.

Another unnamed source (The Times again) concurs:

A high-ranking major league official said he was unaware of the talks but said he would be surprised if a group would consider making such a large investment without any path toward control of the team.

“I think that would be unlikely at those numbers,” the official said. “It’s such a big bet. You’re basing everything on the management capabilities of people you don’t know at all.”

Expanding the Dodger Brand

Though the reports might be off, it makes fair sense from a Dodger point of view to expand the already popular brand in South Korea, which is home to star Dodger pitcher Hyun-jin Ryu.

When Korean pitcher Park Chan-ho was on the team from 1994-2001, Korean viewership made up an estimated 20% of the total. With increased TV coverage on the peninsula, sales of merchandise could once again bring a tidy sum to the team’s coffers.

The team already enjoys strong ties with Koreans in the LA area itself which, according to the 2010 U.S. Census, is home to 334,329 of the United States’ 1,423,784 Koreans –the highest Korean American population in the U.S.

As of this writing, the Korean government has issued no confirmation of the unconfirmed talks reportedly taking place.

 

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