Magic Johnson, NBA MVP, NBA Champion, businessman, entrepreneur, venture capitalist, philanthropist and all-around great guy.
Now, part-owner of the Los Angeles Dodgers MLB baseball team.
Magic Johnson as NBA MVP, NBA Champion, etc., is a very successful individual. He will be far less successful as baseball tycoon. (But, ESPN won't tell you that part).
Let us count the ways.
There is a big difference between venture capital deal-making and owning and operating a business. Especially a money-pit of a baseball team that requires a continuous financing model.
- First, this is a highly leveraged business deal. Razor thin margins force you into making decisions you don't want to make and decisions you can't make. This happens to be just the kind of deal that Bud Selig doesn't want MLB to make, but was forced to anyway. (An e-Bay like auction of a baseball team no-less) This is exactly the kind of deal that knocked Jeff Moorad out of contention with the San Diego Padres and his ownership attempt there.
- Second, little or no available operating capital will be available for product development - namely baseball players. Albert Pujols is already taken and plays and lives nearby Disneyland. Other superstars will not be coming soon. There will be no budget for them.
- Lastly, the TV deal. Read up on this one. This deal will have to go exactly right or else the financial and baseball future at Chavez Ravine looks more like another smog-filled day in the Southland.
So, who are the winners and the losers in this Dodgers Deal?
Losers: Magic Johnson, Dodger fans, MLB, Bud Selig
Winners: Frank McCourt, other teams in the National League West
Showtime comes to the Los Angeles Dodgers and Chavez Ravine.
Instead Showtime, with this Dodgers Deal, is like buying Los Angeles Real Estate at the top of the property bubble.
Have a couple of Dodger Dogs on us, Magic.
