McCourt Money the Key Question

As News Corp. and Boston real estate developer Frank H. McCourt sped toward finalizing a purchase agreement for the Dodgers, questions emerged Thursday about whether McCourt had sufficient financial backing to close the deal.

Investment banker Allen & Co., shepherding the sale for News Corp., and McCourt’s representatives made significant progress in fast-moving negotiations, baseball executives familiar with the talks said, and an announcement of an agreement was believed to be imminent.

Completion of that phase of the process would be the first step in the Dodgers’ changing hands for the second time since 1998, but whether News Corp. can finally dump the supposedly money-losing franchise hinges on McCourt’s ability to finance the transaction.

Although McCourt has significant Boston property holdings, which some baseball officials believe might be appraised as high as $400 million, and oversees a successful real estate development firm, his net worth is unknown.

In 2001, McCourt failed in his bid to purchase the Boston Red Sox. This year, McCourt ended his pursuit of the Angels amid financing questions.

The perception among baseball officials was that McCourt was overreaching in trying to land the Red Sox. The franchise was sold for $700 million, a price that also included the New England Sports Network.

While McCourt was trying to structure a deal to acquire the Angels, Arte Moreno swooped in with the needed cash and bought the club for $180 million from the Walt Disney Co.

Now, McCourt is on the verge of committing double that amount to finally get in the game after twice falling short of buying into the major leagues.

If everything holds to form in negotiations, News Corp. and McCourt are expected to set the purchase price in the $450-million range, industry sources said. The actual dollar value for the club and its property holdings, however, will be between $325 million and $340 million once discounts and credits are factored into the accounting.

Still, that’s significantly more than McCourt was willing to commit to the Angels. The difference now, executives said, is McCourt has sufficient backing to meet News Corp.’s price. News Corp. purchased the Dodgers for $311 million.

McCourt isn’t required to produce proof of the funds while in negotiations with Allen & Co., and baseball officials acknowledged McCourt still might be assembling his partnership, but “he is not a lone ranger,” a high-ranking official said.

There is at least one other major financial backer in McCourt’s ownership group, and the presence of the unidentified individual might allay concerns of the ownership committee as McCourt undergoes the approval process. At some point, of course, McCourt, who was expected to travel to Los Angeles this week for the final negotiation sessions, must put his money on the table. That would have to occur before an ownership meeting to vote on a proposed Dodger sale, and officials said a meeting might be scheduled in November or December.

If all goes well for McCourt to that point, he might receive a boost from Corey Busch, a current major league executive who has joined his group.

A former longtime executive with the San Francisco Giants, Busch since the mid-1990s has worked for MLB in scouting possible franchise locations, establishing franchise values and helping interested buyers form groups.

Busch met McCourt when McCourt was bidding for the Red Sox and has remained an advisor. If McCourt takes control of the Dodgers, Busch is expected to have a top management position in the front office.

Meanwhile, the other interested Dodger bidders apparently haven’t given up hope despite News Corp.’s determination to strike a deal with McCourt.

Jeff Smulyan, the former Seattle Mariner owner who is chairman and chief executive of Emmis Communications Corp., has not withdrawn his bid of $360 million, executives familiar with the situation said.

Smulyan, whose group includes former agent and current Chicago White Sox executive Dennis Gilbert, is the popular choice among some baseball owners.

Smulyan, though, is only willing to purchase the Dodgers if News Corp. includes six television stations in the deal.

And, despite public comments to the contrary, Alan I. Casden still wants to own the Dodgers.

The Southern California developer, believed to have made the highest bid of about $400 million, recently said he is “no longer interested in pursuing a deal with the Dodgers and haven’t been for a couple of months,” but executives said Casden would eagerly re-enter the process if the McCourt deal collapses.

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Right fielder Shawn Green plans to undergo arthroscopic surgery on his right shoulder Tuesday, a team spokesman said. Green, who played with a damaged shoulder throughout the season, is expected to be ready to start spring training.