LOS ANGELES - Farmers Field (72,000)

[slipperydog]

The specific location of the football stadium really doesn't concern me much. So I don't hate the Dodger Stadium site itself. I just hate the logistics, and the lack of public transit options of the site. I also remember the sheer outrage local residents had with their degree of input when Chavez was picked as the site for the baseball stadium. They were essentially thrown under the bus. It would be bad for community/city morale to go through something like that again, especially when you are trying to build a new franchise and maintain a level of equity with locals. I don't sense nearly the same degree of animosity with South Park residents. With the downtown location, I am cautiously optimistic that it could have an impact on the greater civic culture of our region, in that perhaps we can make inroads in terms of public awareness regarding the convenience and accessibility of public transit.

[pesto]

Originally Posted by slipperydog

The specific location of the football stadium really doesn't concern me much. So I don't hate the Dodger Stadium site itself. I just hate the logistics, and the lack of public transit options of the site. I also remember the sheer outrage local residents had with their degree of input when Chavez was picked as the site for the baseball stadium. They were essentially thrown under the bus. It would be bad for community/city morale to go through something like that again, especially when you are trying to build a new franchise and maintain a level of equity with locals. I don't sense nearly the same degree of animosity with South Park residents. With the downtown location, I am cautiously optimistic that it could have an impact on the greater civic culture of our region, in that perhaps we can make inroads in terms of public awareness regarding the convenience and accessibility of public transit.

Traffic will be poor at either location. I lean toward DS but don't particularly want to debate the merits now. There looks to be lots of other things going on that are interesting and swiftly developing.

The building of DS was certainly a controversial process; but that shouldn't repeat itself now that the land is owned by the developer and entitled.

I am hopeful that a football stadium has nothing to do with our greater civic culture, which I think should focus on education reform, central city transit and the like to make the "DT-to-the-sea" the best area to live in in the world.

[slipperydog]

Originally Posted by pesto

I am hopeful that a football stadium has nothing to do with our greater civic culture, which I think should focus on education reform, central city transit and the like to make the "DT-to-the-sea" the best area to live in in the world.

I don't think they're mutually exclusive. Any increase in public awareness for mass transit is a net positive.

[pesto]

I just don't think that football stadiums are transformational or have any significant effect on a major city or its people. There are hundreds of stadiums in the country. The Bay Area has 5 (7, including Santa Clara under construction and ATT, where Cal played last year).

http://www.ladowntownnews.com/news/b...a4bcf887a.html

As is pretty much common gossip among business people, this article catches the reality of what AEG just did to the mayor and city council. That they just grinned and took it shows how desperate they are. Seriously, would you sign a long-term multibillion dollar deal with a developer who had decided to get out of the business and was going to sell off the company in pieces? And didn't bother telling you about it?

Just one of many interesting topics likely to come up.

[will101]

What is LA going to do if Frank McCourt buys up part of AEG? The council just approved the deal, and do not have the foggiest idea who will be charged with completing the deal.

[LosAngelesSportsFan]

There is no way in Hell AEG would sell to McCourt. On top of that, i believe the city added language to the agreement with AEG that they can vet a prospective buyer. Lastly, McCourt doesn't have anywhere near enough money to buy outright and no one in their right minds would team up with him

[pesto]

Originally Posted by LosAngelesSportsFan

There is no way in Hell AEG would sell to McCourt. On top of that, i believe the city added language to the agreement with AEG that they can vet a prospective buyer. Lastly, McCourt doesn't have anywhere near enough money to buy outright and no one in their right minds would team up with him

There could be language to the effect that LA can vet buyers of AEG but that would be odd; it would have to come from Anschutz personally not from AEG. More likely, they have the right to approve any party to which the stadium agreement with the city is to be transferred, directly or indirectly. This would be reasonable and should have been in there from the beginning.

Unfortunately, the point that will101 makes is exactly correct. LA has no control over who Anschutz sells AEG to. It's a worldwide business and for all we know could be sold to a Chinese company (AEG has a large presence in China) or a religious cult or a Russian oligarch. This might not be so bad if they in turn sell off the "rights" to the stadium to someone interested in football in LA. But they still have to find someone who wants to put 1B plus money into developing a stadium and luring a team. The NFL has done a good job of keeping itself in the driver's seat.

[pesto]

http://www.latimes.com/sports/sports...,5974067.story

A reasonable sounding article. Guggenheim is interested in getting more info, but it's too early to tell if there's a deal there. It's not clear what Soon-Shiong brings to the party unless he is willing to overpay as a fan; he's not a sports, media, live entertainment or development maven. But he does have megabucks.

Walter states explicitly that the big media play was not the only reason for buying the Dodgers. Combined with hiring Janet Marie Smith, this could mean that developing the parking lots is on their minds. Personally, I like to think of it as looking something like the area surrounding Fenway, but football is another possibility. But Walter could also be referring to synergies from having multiple LA properties.

[blacktrojan3921]

I'm honestly surprised that this proposal is still kicking.

[will101]

Originally Posted by blacktrojan3921

I'm honestly surprised that this proposal is still kicking.

They do things like that in LA. You just work the proposal and move it along until someone gets caught up in the enthusiasm, and decides to fund it. That's how 'Beverly Hills Cop 3' and 'Death Wish 4' got made, and that's how they plan on getting a new stadium built.

[pesto]

Some truth to that. In a recent interview, Leiweke admitted that Farmer's has not generated any enthusiasm in LA, but argues that that doesn't matter since an enthusiastic driver (Magic? Soon-Shiong?) can put together a product that will attract fan interest.

Some gossip for what it's worth: I was talking with the head of entertainment properties for an Eastern investment company (we were working on a much smaller project). He said they had looked at the Dodgers but had figured that including the media play 1.4B or so was as high as made economic sense. They knew from talking to others that the bidding was going much higher, so they didn’t make a bid. He agreed that the parking lots need to have intense development to make the numbers work and they were skeptical. A football field might work since it would generate income faster than housing, which could take 20-30 years to complete.

He confirmed that Anschutz doesn’t like football and could never see the numbers close to working on Farmer’s. Focusing just on the football side, he believes “Tim is a great guy" but he's not the idea or finance guy, he's the operating and marketing guy. The buyer is going to have to have a different value-add proposition than they see and may have to be willing to lose money indefinitely. Neither the NFL nor any team owner is in any hurry unless they are going to make a killing in LA and that isn't clear yet. In any event, the value is in the other properties.

[pesto]

http://www.reuters.com/article/2012/...89B03720121012

http://www.theatlanticwire.com/busin...kingpin/57881/

It just keeps getting better (except for the other bidders). Larry Ellison (north of 40B) seems to be interested in AEG and LA sports generally. Of course, this is almost like rounding up the usual suspects, since there is a Larry sighting every time a team is for sale. I do love how he frees-up over 4B of collateral in case something comes up. I do that all the time, too.

I won't speculate yet, but Larry has beaucoup houses and property in Malibu and a daughter in the film industry so there is some LA connection. But Larry doesn't overpay as has been noted repeatedly in his tech acquisitions. When the Warriors were available he let them go because the other bidders were overpaying in his view, although we were talking 400M or so, which is only barely noticeable in his world.

Larry should have no problem being able to afford a football team to go with the stadium, Lakers, Kings, etc. One oddity: the Warriors will play in Oracle Arena (for a while at least) although he would own 30 percent of the Lakers.

[will101]

Originally Posted by pesto

http://www.reuters.com/article/2012/...89B03720121012

http://www.theatlanticwire.com/busin...kingpin/57881/

It just keeps getting better (except for the other bidders). Larry Ellison (north of 40B) seems to be interested in AEG and LA sports generally. Of course, this is almost like rounding up the usual suspects, since there is a Larry sighting every time a team is for sale. I do love how he frees-up over 4B of collateral in case something comes up. I do that all the time, too.

I won't speculate yet, but Larry has beaucoup houses and property in Malibu and a daughter in the film industry so there is some LA connection. But Larry doesn't overpay as has been noted repeatedly in his tech acquisitions. When the Warriors were available he let them go because the other bidders were overpaying in his view, although we were talking 400M or so, which is only barely noticeable in his world.

Larry should have no problem being able to afford a football team to go with the stadium, Lakers, Kings, etc. One oddity: the Warriors will play in Oracle Arena (for a while at least) although he would own 30 percent of the Lakers.

But Larry only owns 22.5% of Oracle, so I don't see a real problem. And he also owns something like 90% of the island of Lana'i, but he still calls the estate in Hillsborough his primary residence. I've long suspected that every "Larry sighting" is valid, as I think that he enjoys testing the waters on all of these transactions. He goes in with a (well-researched) dollar figure in mind, and if someone wants to outbid him, all power to them. For example, he was reportedly ready to go up to $750 million for the Dodgers, and never dreamed that someone would pay three times what they are worth.

[Marckymarc]

Originally Posted by will101

For example, he was reportedly ready to go up to $750 million for the Dodgers, and never dreamed that someone would pay three times what they are worth.

The Dodgers were purchased for only 50% more than they are currently worth--bought for $2.1B, currently valued at $1.4B.

[LosAngelesSportsFan]

Originally Posted by Marckymarc

The Dodgers were purchased for only 50% more than they are currently worth--bought for $2.1B, currently valued at $1.4B.

The Dodgers are worth $2.15 billion because they sold for $2.15 billion. Forbes is bullshit

[pesto]

Originally Posted by LosAngelesSportsFan

The Dodgers are worth $2.15 billion because they sold for $2.15 billion. Forbes is bullshit

This is probably the right answer. The definition of "worth" or "value" is normally what a willing seller and an willing buyer agree on so it's hard to argue with the amount actually agreed on in a recent purchase. You don't have to convince the world to pay 2.1B; one person is enough.

Forbes has the same problem as professional economist valuations: they look backwards, not forwards. Purchasers will typically have somewhat inflated senses of value either because of personal attachment ("vanity buyers") or because they see untapped sources of income. You see this at every auction and at most home sales.

[pesto]

Originally Posted by will101

But Larry only owns 22.5% of Oracle, so I don't see a real problem. And he also owns something like 90% of the island of Lana'i, but he still calls the estate in Hillsborough his primary residence. I've long suspected that every "Larry sighting" is valid, as I think that he enjoys testing the waters on all of these transactions. He goes in with a (well-researched) dollar figure in mind, and if someone wants to outbid him, all power to them. For example, he was reportedly ready to go up to $750 million for the Dodgers, and never dreamed that someone would pay three times what they are worth.

Larry was getting really bad advice. The lowest estimate I saw was 800M by Andrew Zimbalist and that was laughed at by both investors and other economists I talked to or saw quoted. Anybody serious in that process got to about 1.4B.

Of course, this area is ripe for "positioning" value. Did you see that Mark Walter now says he overpaid for the Dodgers? Could he be trying to talk down the price of AEG? Mark wouldn't do that, would he?

[will101]

Originally Posted by LosAngelesSportsFan

The Dodgers are worth $2.15 billion because they sold for $2.15 billion. Forbes is bullshit

How can you say that, except for sheer homerism? If you go pay $50 for a Big Mac, does that make it worth $50? Or if you're going to claim that is a spurious argument, how about is Barry Zito worth $126 million because the Giants signed him for $126 million? The answer is no. The Giants paid at least double what Zito was worth, and everyone knows it. The new owners paid about triple what the Dodgers were worth, and everyone knows that, too. Especially since they did not get as much for their money as McCourt did.

And since McCourt bought the team (and everything else) for $430 million in 2004, are you claiming that those seven years of mismanagement caused the team to increase in value fivefold? Normally mismanagement causes a company's value to go down.

Unless the whole idea is the shut the money-losing baseball franchise down, and redevelop the Dodger Stadium site with condos and office buildings. Attendance is down, their record on the field is down, costs are way up and it will be decades before franchise prices catch up to what they paid for the team. How does Oklahoma City Dodgers sound?

[pesto]

Originally Posted by will101

How can you say that, except for sheer homerism? If you go pay $50 for a Big Mac, does that make it worth $50? Or if you're going to claim that is a spurious argument, how about is Barry Zito worth $126 million because the Giants signed him for $126 million? The answer is no. The Giants paid at least double what Zito was worth, and everyone knows it. The new owners paid about triple what the Dodgers were worth, and everyone knows that, too. Especially since they did not get as much for their money as McCourt did.

And since McCourt bought the team (and everything else) for $430 million in 2004, are you claiming that those seven years of mismanagement caused the team to increase in value fivefold? Normally mismanagement causes a company's value to go down.

Unless the whole idea is the shut the money-losing baseball franchise down, and redevelop the Dodger Stadium site with condos and office buildings. Attendance is down, their record on the field is down, costs are way up and it will be decades before franchise prices catch up to what they paid for the team. How does Oklahoma City Dodgers sound?

No fair using hindsight. Like when I bought some internet stock at 14 and sold at 2. Or why didn't I buy Intel or Google or Apple? At each purchase, sale and "no action" I was making a judgment about current value which was reasonable at the time but wildly wrong at a later time.

Moreover, each person has a unique view of what an asset might be worth to him. Some wines might be worth 10k to a connoisseur; 80 to a guy who likes the taste and zero to me. The seller naturally goes with the guy who offers the most. The Giants made a guess about future productivity and were wrong. Happens all the time, but the price paid between willing seller and willing buyer is the definition of market value. Ask the SEC, IRS, estate planners, courts, economists, appraisers, etc. Of course, a year or two later the value may change dramatically.

[LosAngelesSportsFan]

thanks Pesto.. also, whos to say that the price McCourt paid was the right price.