Thursday, March 29, 2012

Magic Johnson wins...again...

“Now your smile is spreading thin, seems like you’re trying not to lose. Since I’m not supposed to grin, all you’ve got to do is win.”

Lyric from: Win from the Album Young Americans
Written By: David Bowie
Performed by: David Bowie

Magic Johnson, Photo Courtesy of Getty Images

Magic Johnson is a winner.
State Champion with Lansing’s Everett High School.
NCAA basketball champion with Michigan State.
Five-time NBA champion with the Los Angeles Lakes.
And countless other on-court awards and honors.
And then there’s his winning off the court.
Magic Johnson Theaters.
World Renown Advocate for HIV/AIDS.
Magic Johnson’s blueprints are the renderings of success not only for the former athlete making the transition to businessman but for anyone looking to succeed in America.
Magic got another big win this week, one which stands as the pre-cursor to his next big sports challenge. A couple of days ago it was announced that he was part of the group that won the ownership bid for the Los Angeles Dodgers. This win is the start to the revitalization of the franchise that lost its way under previous ownership.

From all indications, Magic plans to be an involved, active member of the new ownership group-not just a figurehead. Fans and players alike seem thrilled to have him as a part of the storied organization. Magic will bring some of his magic to the Dodgers…and it only cost him and his partners 2 billion dollars.
In fact, if you factor in the additional money they will have to pay for the surrounding property-150 million dollars, and the money they will need to invest to fix up Dodger Stadium-300-400 million dollars-this is really a 2.5 billion dollar deal. Let the debate on whether these guys paid too much for the franchise begin and continue until order is restored and winning glory is revisited.

With all due respect to Magic, however, I have spent the past couple of days trying to figure out how duplicate Frank McCourt’s brand of success in this deal.
Here’s a guy who bought the team in 2004 for 430 million dollars in a deal financed mostly by debt. He failed miserably as an owner, mostly because he couldn’t really afford his shiny new baseball team, ultimately having to take out personal loans from Fox to cover the team’s payroll last year.  The league finally forces him out of ownership and, he put the team up for auction. In short, Frank McCourt turned $430 million dollars into $2 billion dollars.

Of course he’ll have to pay back some debts but I’m guessing he sees a nice profit here. And he’ll get some revenue from the parking lot that he sold separately for $150 million. We should all be so lucky to fail so spectacularly.
When news of the impending sale of the Dodgers first broke last year most of the folks who were close to the news felt that the bids would definitely start at $1 billion. As time passed the projection of the winning bid was looking closer to 1.5. And here we sit today having just witnessed the a deal boasting the most money ever paid for a sports franchise, most of which is likely attributed to the fact that in baseball, the Dodgers are still a designer brand.

That’s a good thing because it’s a good starting position for the guys who just bought the brand. It’s also probably the reason that most people have stopped short of calling this a bad deal, though folks have teetered very close to saying such.
But a bad deal would mean that Magic takes an L this time around and that just doesn’t happen. But he’s not the only winner here. Listen, most of us can have anything we want as long as we have the willingness and the means to pay top dollar for it. But how many of us are lucky enough to get big profits from our worst mistakes.

Frank McCourt is that kind of lucky…and he’s my kind of winner…