The L.A. Dodgers deal: What $2 billion gets you

Adriene Hill Mar 28, 2012

Kai Ryssdal: The number of the day is $2 billion. Two billion dollars for a baseball team.

That’s the news out of Chavez Ravine. The Los Angeles Dodgers will be sold to a group including Magic Johnson for the aforementioned amount. Needless to say, that blows away the previous record sticker price for an American sports franchise.

We asked Marketplace’s Adriene Hill to find out why a team that finished third in the National League West last year is worth so much.

Randy Newman: I love L.A.

There’s a lot to love about the L.A. Dodgers if you’re looking to own a sports team.

Neal Pilson: There are very few iconic sports franchises in the U.S. and the Dodgers are one of them.

Neal Pilson heads Pilson Communications and is former president of CBS Sports.

Pilson: We’re talking beachfront property, and I don’t mean a possible earthquake.

The opportunity to buy an icon is about as common as a perfect game, and the value of the team is much more than just tickets and jersey sales.

AJ Maestas is president of Navigate Research.

AJ Maestas: What uniquely makes the Dodgers more valuable, certainly the history and the fanbase, but the marketplace in Los Angeles. You know, it’s the No. 2 media market in the U.S.

That big market makes the TV rights to the Dodgers very lucrative. Maestas says, broadly, TV rights can account for 30 or 40 percent of a team’s value, in part because sports games are — as analyst Adam Swanson from SNL Kagan calls them:

Adam Swanson: DVR-proof content.

People like to watch sports live. And because you can’t skip ahead while watching a game in real time…

Swanson: Advertisers want live eyeballs.

If the deal is approved by the courts, those eyeballs could witness more Dodger wins — you don’t spend $2 billion on a baseball team without plans for the future.

I’m Adriene Hill for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.