The Los Angeles Dodgers are worth $1.4 billion, according to Forbes, which went live yesterday with its annual list of the world’s most valuable sports teams. At which value, we’d like to remind you, the club is worth $600 million less than a group led by Guggenheim Partners’ CEO Mark Walter and L.A. Lakers great Magic Johnson paid for the club in March. Oh, we know, something about parking lots, something about the new TV deal, etc., etc., $2 billion—or $2.15 billion, if you count what Mr. Walter’s group paid to develop parking lots with former owner Frank McCourt—is actually a steal! Though as Andrew Ross Sorkin pointed out in April, rival bidders were having a hard time getting passed $1.6 billion.
And then there’s the matter of where Mr. Walter found the cash for the acquisition. According to Sorkin:
In addition to their own cash, Mr. Walter plans to use money from Guggenheim subsidiaries that are insurance companies—some state-regulated—to pay for a big chunk of his purchase of the Dodgers. Guggenheim controls Guggenheim Life, a life insurer, and Security Benefit, which manages some $30 billion, among others.
The transaction seems even more questionable when considering Mr. Walter’s own words to The New York Times two weeks ago: “I don’t want to realize a return on investment on buying the Dodgers. I want to have a multigenerational relationship that changes my life, Magic’s life, Magic’s grandchildren’s lives and all of our lives.”
Which makes the Dodgers acquisition sound like a bum deal for Guggenheim policyholders, though then again, there’s always next year.