The Dodgers sale is being financed by people’s insurance money. Is this a problem?

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Over at the New York Times’ Deal Book blog, Andrew Ross Sorkin notes that the sale of the Dodgers to the group led by Magic Johnson — but really controlled by Guggenheim Partners’ Mark Walter — is being financed with insurance policy dough:

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.

Using insurance money — which is typically supposed to be invested in simple, safe assets — to buy a baseball team, the ultimate toy for the ultrarich, seems like a lawsuit waiting to happen.

Sorkin explains that this is especially problematic given what seemed to be a significant overpay for the team and given that Walter has said that he’s not too concerned about immediate profitability. What of the fiduciary duties to the policy holders, he wonders.

While Sorkin seems pretty alarmed by this, he later makes mention of the fact that long-term holdings are not unheard of for insurance-backed investments.  And this is where I think the alarm should stop. Remember: the Dodgers nearly quintupled in value during the McCourt years, despite historic mismanagement by Frank McCourt.

While I appreciate that there is a bubble element to elevating franchise values in any given short period of time, sports teams have proven to be a safer investment than just about anything over the past, well, forever.  It’s like a license to print money.

World Series Umpires Announced

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Major League Baseball just announced the umpires for the World Series.

The crew chief will be Gerry Davis. Davis was worked 136 career Postseason games, which are the most of any umpire in Major League Baseball history. This is his sixth World Series overall and third time as crew chief.

Joining Davis will be Phil Cuzzi, Laz Diaz, Dan Iassogna, Bill Miller, Paul Nauert and Mark Wegner. Wegner will serve as the replay official for Games One and Two, after which he will join the on-field crew as the left field umpire for Game Three. Cuzzi will be the Replay Official from Game Three through the conclusion of the World Series. Cuzzi will not be a field umpire for any of the games.

The breakdown: