Dodger Stadium: the LA Dodgers franchise may fetch a record $1bn when sold in April
This year, two of the biggest dramas in Major League Baseball have centred on Los Angeles. First, the movie Moneyball was nominated for six Oscars—a triumph, given its slow and thoughtful tone—but came away with nothing. Second, the LA Dodgers, one of the biggest franchises in the game, are being sold in April—just before the new season begins—as part of owner Frank McCourt’s divorce settlement.
Moneyball was always going to be hard to bring to the big screen. It is based on the true-life story of Billy Beane, manager of the Oakland Athletics, a team with a tiny payroll that couldn’t compete financially with the giants of the game. Beane decided to ditch the traditional way that scouts and the transfer market evaluated players and instead use new forms of statistical analysis. Hitting home runs, it turned out, was hugely overvalued, while the ability to get to first base was the most undervalued asset in the game. Recruiting a team on these principles, the A’s made the playoffs—the games that lead to the baseball’s biggest prize, the World Series—for four years in a row; an immense achievement.
But that was in the early 2000s and the A’s haven’t enjoyed a Hollywood-style happy ending. They are back where they started—not because the moneyball theory doesn’t work, but because it works too well. Every baseball franchise now uses this kind of analysis. Undervalued positions have been re-evaluated and the same player bargains are no longer available.
The story of the sale of the Dodgers might have a better shot at the Oscars. It can offer a cast of billionaires drawn from hedge funds, private equity, publishing, real estate and financial services. It has the drama of an against-the-clock, winner-takes-all auction. The backstory is a tale of domestic strife. And there’s a twist: McCourt has spun off the Dodgers’ parking lots into a separate company that he hopes to keep while selling the club and the stadium. Unlike the team, the car parks are moneymakers, though many fans say they will not come back if he holds onto them.
Rather like the Glazers with Manchester United, property developer Frank McCourt borrowed money to buy the Dodgers in 2004. Increasingly expensive tickets have helped service his debts but the team’s performance has been poor for its payroll. Frank’s wife Jamie served as CEO but the day after the Dodgers were eliminated from the 2009 playoffs he sacked her. She filed for divorce soon after and McCourt only had the Dodgers with which to pay the bill. Fortunately for him, despite the team’s finances, billionaires are bidding up the price to the record level of around $1bn.
If the Dodgers can remain unfazed by the hullabaloo, they have a shot at the playoffs. But these days it’s hard to rule any team out. The New York Yankees, whose payroll outstrips everybody’s, have won just one World Series in the last decade and are not expected to do well this year. The Boston Red Sox have the third highest payroll and apply massive resources to analysis, but even they have won only two World Series. Small teams continue to offer real challenges. If they’re not using the moneyball model, how do they do it?
Last year the Arizona Diamondbacks, with the sixth-lowest wage bill in the league, made it to the playoffs thanks to outstanding fielding. Since the clampdown on steroid abuse in the last five years the number of home runs has declined and the importance of fielding and defence has risen. Managers used to just measure catches made and missed, but now use complex new measures of a player’s overall performance and their impact on runs. Instead of looking at the number of errors a fielder makes, teams look first at how many balls they reach in the first place.
Tampa Bay, who for almost a decade were the worst team in Major League Baseball, came under new management in 2005 and have since made the play-offs three times. The team have excelled in finding and nurturing talent in the Dominican Republic and in South America. They have also been good at keeping their pitchers healthy: an area of the game that many teams have neglected at their peril.
Moneyball and its real-life sequels are stories that showcase some of the best features of US capitalism: capacity for innovation, openness to new technology, and a ruthless rationalism. But the sport has another tale to tell: of the rise of the super-rich and the rewards of bare-faced cheek.