The Very Lucrative Pro Sports Business
The LA Times reports on the upcoming sale of the Dodgers:
The winning bidder is expected to pay owner Frank McCourt in excess of $1 billion for the team, its stadium and the surrounding parking lots....All summer and into the fall, McCourt — who purchased the Dodgers for $421 million in 2004 — sought to maintain control of his team by taking it into bankruptcy.
Amazing. That's an appreciation of about 12% per year for a team that McCourt has all but ruined and a business that he and his wife have looted of hundreds of millions of dollars. It's something to keep in mind when owners of sports teams weep about how much money they're losing — usually when they're begging for government subsidies or badmouthing greedy players. But businesses that are truly losing money don't usually see their market caps increase by 12% a year, do they?