Steve Cohen, Team in Final Three Pushing for LA Dodgers’ Ownership

SAC CAPITAL ADVISORSHedge fund manager Steve Cohen understands the art of the deal. At his SAC Capital fund, he uses both quantitative and fundamental analysis to make the sort of lucrative calls that has enabled him to return investors almost 30% over the last 20 years – and become one of the wealthiest men in the world.  Cohen, who is just 55 years old, is listed by Forbes as the 35th richest person in the US and has a personal net worth of $8.3 billion. He is also a baseball fan.

Recently, Steve Cohen made the final cut to become the new owner of the Los Angeles Dodgers. Along with a team of other investors, including the richest man in Los Angeles Patrick Soon-Shiong, Cohen is up against a team led by Los Angeles Lakers legend Magic Johnson and  former baseball executive Stan Kasten and another headed up by St. Louis Rams owner Stan Kroenke.

Bringing Soon-Shiong on board is a smart move for Cohen. Some in Los Angeles, including Mayor Antonio Villaraigosa, had raised objections to the team going to a non-local and were somewhat worried what could happen to the team if Cohen’s fund SAC Capital was ever charged with insider trading. Bringing Soon-Shiong on board fixes both these issues.

Under the terms of Cohen’s bid, he would own 100% of the team, with Soon-Shiong owning an undisclosed minority stake. Cohen is committing a total of $2 billion to purchase the team and renovate the stadium – a sum that he is putting down without financing. Cohen’s bidding team is also positioned to offset the $400 million in debt the Dodgers had accumulated under McCourt’s management and which contributed largely to its bankruptcy.

“Cohen has more money than any (of the bidders) and, as such, isn’t going to have to borrow money — and thus increase the (Dodger debt) — to finance his bid,” says an insider cited in the New York Daily News. “Kroenke probably wouldn’t have to, either, but he’s going to have a problem with the NFL, which doesn’t allow owners to own teams in other sports competing in the same market as theirs. The NFL owns the L.A. market and if Kroenke gets the Dodgers, (NFL commissioner Roger) Goodell is probably going to tell him he has to sell the Rams. In any case, (MLB) can’t be put in an embarrassing position where the Dodgers go to someone who can’t or won’t keep them.” Cohen faces a similar issues regarding the New York Mets. He is one of 12 investors to pay $20 million for a limited share of the Mets – he would have to sell that stake if his offer for the Dodgers is approved.
Outgoing Dodgers owner Frank McCourt is expected to name his successor April 1.