Thursday, January 9, 1997
It's still viable for families
to own teams

The Cincinnati Enquirer

First of all, the Los Angeles Dodgers do not deserve our sympathy. The ballclub is up for sale because of its prosperity, not its poverty.

When Peter O'Malley decided to solicit offers on baseball's model franchise, he had no trouble making ends meet. It was his own end he could no longer afford.

Though there were numerous factors nudging O'Malley to liquidate the Dodgers, the most compelling reason is the comparative cost of capital gains versus estate taxes. (Like too much pitching, this is a good problem to have. Nonetheless, it is a problem.)

O'Malley has chosen to raise cash rather than leave his heirs a burdensome baseball legacy. He is, as his father always was, a step ahead of the crowd.

Despite the loud laments of acting commissioner Bud Selig, and those of O'Malley himself, family ownership of sports franchises is not doomed by the Dodgers' sale.

Nearly two-thirds of the major-league franchises in baseball, football, basketball and hockey are controlled by private individuals instead of corporations. The O'Malleys, in fact, may eventually resurface as owners of a National Football League team in Los Angeles.

O'Malley's problem is that a sports franchise that appreciates over a long period of time can be an unwieldy asset to inherit. Estate taxes can reach 55 percent. Prudence suggests precautions be taken.

Brown knows aggravation

''It is a legitimate issue,'' said Alan Friedman, who edits The Ownership Of Professional Sports Teams for Team Marketing Report. ''Anyone who does estate planning can tell you that.

''An asset that has been in the family a long time probably has a very small (cost) basis and a lot of appreciation. . .That's what took the Dolphins out of the hands of the Robbie family.''

Mike Brown is presently engaged in a high-stakes battle with the Internal Revenue Service over his rights of succession with the Bengals. It is a struggle common to second-generation franchise owners, and hard to predict. O'Malley has chosen to spare his heirs that aggravation, and figures to leave them an eye-popping profit.

When Walter O'Malley bought a 25 percent interest in the then-Brooklyn Dodgers in 1943, he paid $82,000. That same stake might be worth $82 million today. Preliminary estimates of the Dodgers' sale value start at around $350 million. The O'Malleys now own nearly 100 percent of the franchise.

Their selling price will surely be unprecedented among American sports franchise, but the package also includes Dodger Stadium, the 300 acres of downtown Los Angeles on which the stadium is situated, a sprawling spring training complex in Vero Beach, Fla., and a baseball academy in the Dominican Republic.

Not only that, but the Dodgers carry a cachet second only to the New York Yankees among baseball franchises. Plus, you don't have to negotiate with George Steinbrenner.

Stars among potential buyers

Celebrity attorney Robert Shapiro is among those eager - no, make that salivating - to organize an offer for O'Malley. Warner Brothers Chairman Bob Daly says, ''I'd kick myself if I didn't at least think about it.'' Director Steven Spielberg, who recently paid $607,500 for Clark Gable's Oscar, is another movie mogul who has been mentioned.

Former baseball commissioner Peter Ueberroth is intrigued by the possibilities of Chavez Ravine, but believes he will be priced out of the market by some major media company, possibly Fox.

''The Dodgers baseball franchise is, in my view, the most valuable franchise in baseball,'' Ueberroth told the Los Angeles Daily News. ''We would have a strong interest, but I don't think we'd be a very likely winning bidder because of the marquee nature of the Dodger franchise.''

The Dodgers' marquee nature may influence the sale price, but it is profit, property and cash flow that make this franchise so fascinating to potential buyers. Peter O'Malley may be getting out while the getting is good, but the getting is going to be good for a long time.