A Rising Tide Floats All Boats

According to Forbes Magazine, the Los Angeles Dodgers are valued at $1.4 billion, second only to the New York Yankees.

So by that measurement, the Guggenheim Capital group and their most prominent (though not main) member Magic Johnson, got quite a deal.

But by any other measure, $2 billion for a professional sports franchise is an unbelievable, perhaps outrageous, amount of money to spend. Yesterday the Los Angeles Dodgers became the most expensive sports franchise in North America and the record setting $2 billion price tag more than doubled the previous MLB record ($845 million by the Ricketts family in purchasing the Chicago Cubs).

This is the ARod contract of purchasing sports franchises. It's outrageous but it also sets a new bar for the valuation of a sports franchise. The question of whether the Dodgers are in fact worth this amount of money is impossible to answer right now. They are without question one of the storied franchises in baseball. They have just signed a new television contract which has rapidly increased their value. Frank McCourt is no longer an albatross around the franchises neck (though he is looming right outside the stadium in the parking lot). But they are the second most interesting baseball team within a 30 mile radius and their popularity is paltry in comparison to that of the Lakers and, this year, the Clippers. All of that is likely to change.

But what does this purchase price mean for the rest of baseball? As you are likely aware if you are reading this blog, Jeff Moorad stepped down as CEO of the Padres last week, effectively ending the layaway plan purchase Moores had set up. Per the North County Times, the Moorad group can still complete the purchase the team by 2014. Though it would seem a more likely scenario is that both John Moores and the Group Formerly Known as the Moorad Group will attempt to find one buyer for all 100% of the ownership stake. If you were John Moores, and the team roughly 100 miles north of you just sold for $2 billion, suddenly the landscape has changed.

The Padres are no doubt more valuable then they were in 2009. The new television deal could be worth close to $1 billion over 20 years. Forbes Magazine has valued the team at $458 million, up 13% from last year, thanks in part to the television deal. The Padres are poised to be contenders in the near future, and have very little committed money to the current on the field product.

Tom Krasovic tweeted last night that an MLB insider said the Padres price could reach $700 million due to the Dodgers price. Unrealistic? Who's to say? The landscape has changed. What seems to be clear is this? John Moores sold the Padres for $525 million in 2009. He will certainly receive more than that this time around.