DODGER DOINGS
New York hedge fund manager Steven Cohen emerges as favorite to buy L.A. club
Bill Madden,
TAMPA — Steven Cohen is clearly a guy who knows how to cover all his bases — and that is why, by aligning himself with fellow billionaire Patrick Soon-shiong, reputed to be the richest man in Los Angeles — the New York hedge fund titan has made himself the clear-cut favorite to wind up owning the Dodgers next month, according to MLB insiders.
Cohen, 55, who founded SAC Capital Advisors, which has been reported to be responsible for 3% of the average daily trading on the New York Stock Exchange, is listed by Forbes as the 35th-richest person in the U.S., with a personal wealth of about $8.3 billion. As one MLB owner source said: “Steve Cohen is the one guy who could write a personal check himself, if he wanted to, for whatever it takes (to win the auction for the Dodgers).”
Cohen, who is also one of 12 investors to pay $20 million for a limited share of the Mets, faced two significant obstacles in the early stages of the Dodgers bidding: (1) MLB owners were concerned about a recent SEC investigation of insider trading involving SAC, and (2) some in Los Angeles, including Mayor Antonio Villaraigosa, voiced their objections to the Dodgers winding up in the hands of non-local ownership. Cohen would have to sell his interest in the Mets if he completes a deal for the Dodgers. By bringing aboard Soon-shiong, a noted L.A. physician and philanthropist whom Forbes lists as the 39thrichest person in the U.S. with a personal wealth of $7.2 billion, Cohen satisfied both of those issues.
It was thought that by enlisting former MLB deputy commissioner Steve Greenberg of Allen & Co. as an adviser, Cohen was able to make it through the MLB vetting process. But as the same MLB source said: “There were still big concerns about all the speculation with the SEC and having a hedge-fund guy own a ballclub. Nobody wanted (MLB commissioner Bud) Selig to get embarrassed down the road. But now, with (Soon-shiong), there’s a perfect backup if anything should ever happen (with Cohen). You’ve got a local guy, with no potential red flags and almost as much money as Cohen.”
Cohen, whose team also includes respected L.a.-based super agent Arn Tellem, is one of five bidders left in the process. The others are St. Louis Rams owner Stan Kroenke, whose personal worth has been estimated at $3.2 billion and whose wife, Ann, is a Wal-mart heir who is said to be worth $3.9 billion; the Guggenheim partners group headed by L.A. Lakers Hall of Famer Magic Johnson and former MLB chief exec Stan Kasten; Michael Heisley, owner of the NBA’S Memphis Grizzlies and Tony Ressler, cofounder of the L.a.-based Ares Management private equity group; and L.A. private investment mogul Stanley Gold and the family of the late Roy Disney, who were recently restored to the bidding by a bankruptcy court mediator after MLB had rejected them over concerns about the structure of their financing.
For a number of reasons, the Cohen/soon-shiong team appears to have a clear edge on the other bidders.
A sports industry insider with direct knowledge of the process noted that Cohen is best positioned to structure his bid with sufficient equity to offset the $400 million in Dodger debt accumulated by owner Frank Mccourt, which helped plunge the team into bankruptcy. The insider added that while Kroenke is also independently wealthy, there are potential problems with his bid because of the NFL’S cross-ownership policy.
“Cohen has more money than any (of the bidders) and, as such, isn’t going to have to borrow money — and thus increase the (Dodger debt) — to finance his bid,” the insider said. “Kroenke probably wouldn’t have to, either, but he’s going to have a problem with the NFL, which doesn’t allow owners to own teams in other sports competing in the same market as theirs. The NFL owns the L.A. market and if Kroenke gets the Dodgers, (NFL commissioner Roger) Goodell is probably going to tell him he has to sell the Rams. In any case, (MLB) can’t be put in an embarrassing position where the Dodgers go to someone who can’t or won’t keep them.”
Cohen has also been recruiting Tony La Russa to be part of a potential Dodger front office under his ownership, presumably as head of baseball operations. Contrary to published reports, La Russa has not yet joined forces with Cohen (the former Cardinals manager, in fact, also has been approached by most of the other bidders), but it’s almost certain he will be part of the Dodgers under the new owner.
“I’ve had discussions with Steve,” La Russa said by phone from Arizona, where he is touring spring training as a special adviser to Detroit Tigers president Dave Dombrowski. “Working for a club, using my on-field experience along with player evaluating is something I really want to do and Steve knows that. We’ll see what happens.”
Because all five of the bidders have insisted that the parking lots surrounding Dodger Stadium and their revenue — which McCourt placed in a separate company exclusive from the bankruptcy process — be included in the deal, it has been speculated that the April 1 deadline for Mccourt accepting the winning bid might be extended a few days.