Los Angeles Dodgers Are Latest Champion To Quickly Reward New Investors

New investors in sports teams often do so more for the excitement of owning a piece of their favorite team or glory that comes with a winning a championship than for making a sizeable return on their investment. In some recent cases, they achieved both.

Consider that just 13 months ago Robert L. Plummer and Alan Smolinisky bought slightly less than 5% of the Los Angeles Dodgers combined. Both gentlemen are diehard Dodgers fans. At the time the deal was announced, Smolinisky was quoted as saying “I’m a lifelong Dodger fan and to now be a part of their ownership group is an exciting opportunity and time for me and my family.”

On Monday, the Dodgers captured the team’s first World Series since 1988, beating the Tampa Bay Rays 3-1. No word yet on whether Guggenheim Baseball Management, which purchased the MLB team for $2 billion in 2012, and have a few runs at the title since buying the Dodgers, are making Smolinisky and Plummer honorary good luck charms. In April we pegged the value of the Dodgers at $3.4 billion, a figure that will surely climb in the years ahead despite the team’s huge reported losses during the pandemic-shortened season.

You don’t have to go back too far back to find arguably an even more improbable turnaround in fortune. When the Ricketts family bought the Chicago Cubs and a portion of a regional sports network for $845 million in 2009, the Loveable Losers, as the north Chicago team came to be known, had not won the World Series since 1908.

In early 2015, the Ricketts family raised a total of $150 million of equity to help fund the renovation of their ballpark by selling minority interests of the same assets to six investors. Among the new investors were the DeVos family, which owns the NBA’s Orlando Magic. And wouldn’t you know it? The Cubs beat the Cleveland Indians in seven games to win the 2016 World Series. By our math, the value of the Cubs has nearly doubled since 2015.

The St. Louis Blues, who joined the NHL in 1967, never won a Stanley Cup prior to their victory over the Boston Bruins in the finals last year. A group led by local businessman Tom Stillman bought a majority stake in the hockey team in 2012 at a valuation of $180 million. The group was entirely made up of local residents.

According to the St. Louis Business Journal, Stillman bought the rest of the team in 2019, just after the Blues won the Cup (the deal was being discussed before the playoffs began). Thus, in this case, the new investor is simply more of the old investor. The Journal did not mention a price Stillman paid for the latest stake in the team, but two person familiar with the transaction told me it was north of $500 million. Alas, the local Blues die hard fans-turned into-owners have done quite well.