Mets vs. Dodgers: Not the Game, the Investment


The reasons for sports franchise ownership are complex. Making a good “investment” in the traditional return on investment sense, can be a much smaller piece of the decision tree than many might presume. My coauthor Scott Rosner and I write about this in our chapter on ownership in The Business of Sports.  Ego, access to an elite club, love of sports and civic pride are other major reasons for pursuing sports franchise ownership.

The Mets are on a unique fundraising path that both shows the power of sports franchises to draw funds and the interest in cable entities in keeping their content “viable.”   Some potential investors are reported to be pursuing both opportunities. What differences does someone with ready cash see between the two investment opportunities?

  • The Cash Required: First, the New York Mets are selling 10 shares at $20 million each for a total of $200 million.  That’s a far cry from the billion plus number being sought by the Los Angeles Dodgers from a single owner or ownership group. 
  • The Asset: The Dodgers had a temporary liquidity problem that arguably could have been resolved if Major League Baseball had approved any of the negotiated agreements between Fox and the Dodgers. Somewhat like a foreclosure, the Dodgers did not necessarily want to sell, they like their “house” but they have no choice due to MLB and legal mandates. The House looks good, the owner just got into trouble.  The Mets appear to have a capital deficiency issue not a temporary liquidity issue.
  • The Brand: The Dodgers are an attractive investment with global brand upside.  The Dodgers are the Yankees of Los Angeles.  The Mets are the Mets of New York.  
  • The Media Rights: Dodger media rights will be up for negotiation within months after the sale process is completed.  This provides the new owners with an immediate opportunity to further enhance the franchise value.  The Mets media rights are locked in place for years to come.
  • The Talent: This is where I am a bit out of my lane but, the Dodgers, arguably, have a sound core of star players at key positions.  They finished with one of the best records in the National League over the second half of the 2011 season.  The Mets, arguably, have very few stars and without change one could argue their future is not looking that bright.

Maybe the most interesting opportunity with the Mets is the access to an elite club with, what in this realm can only be considered, a relatively modest investment.   

 
 
 
 
 

Duane Morris Sports Law

Sports are serious business and the attorneys at Duane Morris are attuned to developments in the legal field of play and their potential impact on the players in the industry.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.