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Magic Johnson’s group agrees to buy Dodgers for record price of $2 billion

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UPDATE: Here’s the text from the press release, officially announcing word of the agreement between the two sides:

The Los Angeles Dodgers and Frank McCourt today announced an agreement under which Guggenheim Baseball Management LLC (“GBM”) will acquire the Los Angeles Dodgers for $2 billion upon completion of the closing process.  The purchasing group includes Mark R. Walter as its controlling partner, as well as Earvin “Magic” Johnson, Peter Guber, Stan Kasten, Bobby Patton and Todd Boehly.  Mr. McCourt and certain affiliates of the purchasers will also be forming a joint venture, which will acquire the Chavez Ravine property for an additional $150 million.

The Los Angeles Dodgers stated, “This transaction underscores the Debtors’ objective to maximize the value of their estate and to emerge from Chapter 11 under a successful Plan of Reorganization, under which all creditors are paid in full.”

Frank McCourt stated, “This agreement with Guggenheim reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community.  We are delighted that this group will continue the important work we have started in the community, fulfilling our commitment to building 50 Dream Fields and helping with the effort to cure cancer.”

Earvin “Magic” Johnson stated, “I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles.”

11:08 PM: Whoa. Dennis K. Berman of the Wall Street Journal reports that Johnson’s group have agreed to purchase the Dodgers for $2 billion. One would think this offer would be good enough to include the parking lots, right?

The good news is that Dodgers fans will have the most popular sports figure in Los Angeles as part of the new ownership group, but McCourt is going to walk away from this thing filthy, stinkin’ rich.

11:06 PM: It’s Showtime.

Details are scarce at the moment, but Ken Gurnick of MLB.com reports that the Dodgers have reached an agreement to be sold to the group led by Magic Johnson and longtime MLB and NBA executive Stan Kasten.

MLB owners had approved the groups led by billionaire hedge-fund manager Steve Cohen and St. Louis Rams owner Stan Kroenke, but outgoing owner Frank McCourt has apparently identified Johnson’s group as the winning bidder. No word yet on the exact terms, but most estimates had the sale price to exceed $1.5 billion, which would establish a new record for a North American sports franchise.

Adams homers in 16th to lift Cardinals over Dodgers 4-3

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ST. LOUIS — Matt Adams homered in the 16th inning to lead the Cardinals to a 4-3 win over the Los Angeles Dodgers on Friday night for St. Louis’ season-best fifth straight victory.

It was the second consecutive game that the Cardinals won in their final at-bat. They beat the Padres on Thursday after scoring a run in the ninth inning.

Adams homer came with one out off Bud Norris (5-9), who gave up six runs as a starter in an 8-1 loss at Washington on Wednesday.

Seth Maness (1-2) picked up the win with a scoreless inning of relief for St. Louis, which was playing its longest game of the season.

Jedd Gyorko hit a two-out homer off closer Kenley Jansen in the ninth to tie the game 3-3.

Justin Turner and Howie Kendrick homered for the Dodgers. Los Angeles has lost four of six. The red-hot Turner has seven homers and 17 RBI this month. He hit two homers in a 6-3 win over Washington on Thursday.

Turner blasted his career-high 18th homer of the season off Seung Hwan Oh in the ninth to break a 2-2 tie.

Corey Seager had four hits and drove in the first run of the game. He had hit in seven successive at-bats before flying out in the ninth.

Kendrick’s solo shot in the sixth tied the game 2-2. He has hit in 14 successive games trying Colorado’s Charlie Blackmon for the longest current streak in the majors.

Los Angeles starter Brandon McCarthy allowed one hit and two runs over 6 1-3 innings, the longest of his four starts this season. He left with leg cramps. McCarthy struck out four and walked three.

St. Louis starter Michael Wacha allowed two runs on 10 hits in six innings. He struck out four and walked one.

Dodgers reliever Adam Liberatore recorded his 28th successive scoreless outing by retiring two of four batters in the seventh. He has not allowed a run in 41 of 42 appearances this season.

Minor League Players’ Wage Suit against Major League Baseball suffers a huge setback

The judge's gavel is seen in court room 422 of the New York Supreme Court at 60 Centre Street February 3, 2012. REUTERS/Chip East
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A judge handed minor leaguers looking to hold Major League Baseball liable for underpaying and exploiting them a huge setback today, ruling that the case cannot go forward as a class action. Minor leaguers who want to sue over their pay and treatment still can, but they’ll have to do it individually. The ruling saps the minor leaguers of their leverage, as Major League Baseball would likely be able to fend off individual cases which, by themselves, might only amount to several thousand dollars per claim.

The background: in 2014, former Miami Marlins player Aaron Senne sued Major League Baseball, Bud Selig, and three major league clubs claiming that minor leaguers are underpaid and exploited in violation of the Fair Labor Standards Act. He was later joined by former Royals minor leaguer Michael Liberto and Giants farmhand Oliver Odle. Eventually others joined and the suit had been expanded to 22 teams as defendants.

The upshot of the case is that, while the minor league season lasts only part of the year, players are required to do all sorts of things outside of merely playing games for which they are not compensated. Training, meetings, appearances and the like. When all of that time is added up, the players claim, their already low salaries are effectively far below minimum wage in violation of the law. Major League Baseball has countered this by claiming that minor leaguers are basically part time seasonal workers — like landscapers and pool boys — who are not subject to federal labor laws.

Last year the judge gave the case conditional certification, allowing the players to try to establish that it should go forward as a class action. This would streamline the case from the plaintiffs’ perspective and give them the power of collective action by asserting hundreds or more similar cases into one proceeding. The judge’s ruling today, however, was that the cases really weren’t factually similar and thus collective action was not appropriate because figuring out how many hours each player worked and what was required of him varied too greatly among the players.

From his order:

“The difficulties associated with determining what activities constitute ‘work’ in the context of winter training are compounded by the fact that there appear to be no official records documenting these activities. Because it may be impossible to determine from official records the types of conditioning activities in which the players engaged, membership in the state classes based on winter training would depend largely upon the players’ ability to remember, with a reasonable amount of detail, what they did during the off-season (often for multiple years and for many, several years in the past) to stay fit.”

The judge said that, in light of this, each case would be unique and would require “individualized inquiries” to find damages and liability. That phrase –“individualized inquiries” — constitutes magic words which sink would-be class actions. If a company overcharges all of its customers by $8 due to an error repeated a million times, it’s easy to look at one set of facts and judge them together. If you had to look at a million different wrongs, that’s no class action. And so it is not a class action for the players.

As many courts who have dealt with these sorts of cases have noted, for many plaintiffs, a class action is the only practical method of adjudicating Fair Labor Standards Act cases because individual plaintiffs are frequently unable to bear the costs of separate trials. They are, by definition, (allegedly) exploited workers. They’re not going to be able to pay legal costs and fight off a multi-billion dollar business in order to collect the few thousand dollars they were underpaid. At the same time, however, the defendants have rights too and, if the facts of each players’ treatment truly differ (e.g. the Yankees make their minor leaguers do more than the Brewers do) it’s not fair to bind one defendant’s defense to the acts of another.

So, where does this leave the players? Not dead. Not yet, at least. Their claims have not been dismissed on the merits. They have only been denied the right to act collectively. The individual plaintiffs can now file separate lawsuits against their former employers and Major League Baseball under the same theories. It would be harder to land a big blow in such a scenario, but if enough do, it could end up being death by a thousand cuts for the clubs and the league. Their legal fees might go up and, eventually, if they lose enough of these cases, more might be filed. There are a lot of former minor leaguers, after all, and once there’s some blood in the water, more of them — and their lawyers — may enter the frenzy. Decertification is certainly a win for the league right now, but it’s not necessarily a permanent win.

There are likewise some other quasi-collective forms this case could take such as multi-district litigation in which the cases, while individual, are coordinated in a loose fashion. That could lead to some efficiencies for suing players even if it’s not as robust as a class action.

We’ve written quite a bit about minor league pay and treatment in this space by now, so you probably know where we stand on it. We believe that minor leaguers are exploited and underpaid and we believe that Major League Baseball has been happy to exploit and underpay them for some time. Ultimately we believe that this state of affairs cannot and will not persist and that eventually, somehow, baseball will either see fit to pay its workers fairly or, more likely, will be forced to do so by a court or by collective bargaining of some fashion.

Today, however, was a big setback for the minor leaguers. Today’s ruling will give Major League Baseball and its clubs more time and more comfort in which to underpay them. There’s no doubt about it.