Dodger Deal Appears Headed for Home

Rupert Murdoch’s offer to buy the Dodgers for a reported $350 million still faces three rounds of formal scrutiny by major league baseball owners, but the transaction is already beginning to look like a done deal.

Baseball insiders say that almost no concerted opposition has emerged among the owners, who have not seen details of the deal. They will probably take a final vote on the deal by the end of the year.

“If somebody was trying to form a group [of owners] to block this, I would know about it,” Dodger owner Peter O’Malley told The Times last week. “And I haven’t heard anything like that.”

As it happens, Murdoch is already as deeply involved in baseball affairs as many owners, given that his Fox sports operation holds a five-year broadcasting contract with the game and that he is engaged in millions of dollars in regional broadcast deals with almost every team.

Thus far, the only teams known to have openly expressed concerns about the deal have been the San Diego Padres (one of the few without any broadcast deal with Fox) and the San Francisco Giants.

Padre owner John Moores has said that he is concerned that any increase in the number of games televised by the Dodgers--which offer one of the more limited broadcast and cable packages in the sport--could cut into his team’s attendance. Giant officials have expressed similar sentiments.

The terms of the agreement in principle reached between Murdoch and the O’Malley family are now in the hands of baseball’s 10-member ownership committee, which could report to the owners as soon as Sept. 30, but more likely early in October.

After that, the deal must be scrutinized by the owners’ nine-member executive council, which is chaired by acting baseball Commissioner Allan “Bud” Selig and may need several weeks to mull it over.

The owners could then cast their formal votes by phone, although Selig indicated in an interview last week that he might prefer to call a special meeting of the owners in November or December. Under baseball’s bylaws, the deal will have to win a simple majority among the American League owners and a three-quarters vote in the National League. (Both the Dodgers and the incoming expansion Arizona Diamondbacks will be able to vote.)

These procedures mean that the proposed sale will not be on the agenda of the owners’ meeting starting Tuesday in Atlanta. At that gathering, owners are expected to receive for the first time detailed information about the proposed terms.

One other factor affecting the timetable is the World Series, which will take place in late October; traditionally almost no team or league business is transacted during the series.

In any event, league observers say the chances are slim that any organized opposition will arise to the sale to Murdoch.

Although O’Malley said a few owners have raised questions about the deal in private conversations, mostly about the chance that the Murdoch organization will overspend for free-agent players, none appears to have concerns that could be a serious obstacle to the sale.

In part that is because the reported price of $350 million enhances the putative value of every team in the major leagues; if Murdoch is turned away, it will be almost impossible to find an alternate buyer willing to pay such a premium price.

Moreover, no single entity offers Murdoch’s ability to promote baseball on a global scale. Given the worldwide dominance of satellite TV systems by his News Corp. and its holdings in cable networks around the world, the major leagues would have to deal with Murdoch interests in any international promotion one way or the other.

Finally, no one outside baseball’s ownership cadre is as well-entrenched an insider as Rupert Murdoch.

The Fox Sports operation of News Corp. is perhaps the game’s single biggest investor. Its broadcasting and cable contracts are worth as much as $1 billion over the next four years, according to some estimates, including the $565 million it is paying for its five-year over-the-air package and some $160 million for cable telecasts on its fX and Fox Sports Net channels.

Fox has direct or indirect broadcasting deals linking its regional sports cable channels and their affiliates with 23 of the 28 existing teams, including 12 National League teams--enough to secure official approval in that circuit. In Southern California, Fox Sports West carries Anaheim Angel games and Fox Sports West 2 carries the Dodgers.

The Fox national network also carries weekly major league baseball games (it will broadcast the American League playoffs this year).

As it happens, News Corp.’s relations have been most difficult with its fellow media companies among the owners--especially Time Warner, which owns the Atlanta Braves through its Turner Broadcasting System subsidiary, and Walt Disney Co., which is general managing partner and 25% owner of the Anaheim Angels.

In recent months, Murdoch and News Corp. have moved to mend fences with Time Warner and Disney--although it is unclear whether those steps were aimed at smoothing the way for the Dodger vote.

In July, News Corp. and Time Warner settled a bitter public fight over Time Warner’s refusal to carry the 24-hour Fox News Channel on its New York City cable system.

According to the settlement, Murdoch gained access to 65% of Time Warner cable systems across the country, although he will pay a relatively high $10 per subscriber for the access.

Time Warner sources say that many inside the company considered the deal entirely too favorable to Murdoch, especially considering that Time Warner had won a series of preliminary legal skirmishes over the issue. But it was justified internally in the name of Time Warner’s broader corporate interests, including that “we have lots of business coming up with Murdoch,” in the words of one source.

That source said the question of whether Time Warner would cast its vote in favor of Murdoch’s Dodger purchase was not part of the written settlement.

The wild card in the News Corp.-Time Warner relationship is the potent personal antipathy between Murdoch and Time Warner Vice Chairman Ted Turner.

Turner in the past has labeled Murdoch “slimy” and “a scumbag” and compared him to Adolf Hitler. Murdoch’s New York Post responded by publicly questioning Turner’s sanity.

As recently as last week, Turner suggested in an interview with a cable trade journal that he considered Murdoch “amoral” and denigrated his “standards of journalism.”

At least one Turner confidant said last week that he would not be surprised to see Turner abstain or vote against the Dodger deal “just to be ornery” if his vote would not be deciding. He might, however, be less likely to cast a “nay” vote that would actually kill the transaction.

Still, the rancor between the two men appears to be limited to the personal; rarely, if ever, has the Turner-Murdoch spat been permitted to interfere with corporate deal-making.

Even after Turner’s Hitler remark, News Corp. gave its crucial assent to Turner’s plans to convert his WTBS Superstation to a full-fledged cable channel. Fox’s OK was necessary because after the change, WTBS would infringe on Fox’s cable rights to major league baseball games.

“The competitive nature of [the entertainment] industry is far more driven by egos than by practical business economics,” said Jeffrey Logsdon, an industry analyst for the Irvine firm of Cruttenden Roth. “[But] when there’s a buck involved, ultimately people will set aside their egos.”

As for the Disney-Fox relationship, those two companies on Aug. 22 settled a raft of lawsuits arising from the creation of Fox Sports West 2 in January.

Disney had complained that the Anaheim Ducks, its NHL team, was being shifted to the less widely aired new channel, and Fox countercharged that Disney was trying to break contractual commitments tying the Ducks and Angels to Fox cable channels. The settlement called for the two teams to remain for up to two more years with Fox, after which they may move to a new regional sports channel to be started by Disney’s ESPN subsidiary.

In an interview last week with The Times, Disney Chairman Michael Eisner, who earlier said he would abstain in a vote on the Dodger sale, called Murdoch “a quality owner of a company.” But he declined to say if Disney would vote in favor of his acquisition of the team.

“I haven’t figured out our position on that,” he said. As an American League owner, however, Disney’s vote carries less weight than it would in the National League.