Do Player-Owners Have Real Ownership?
Examining bids for Chelsea FC
Dear readers,
Thanks very much for weighing in on last week’s inaugural Southpaw debate. We don’t know if there is a conclusive winner, but the important thing is that everyone had fun. We also heard from a bunch of you that you enjoyed this format, so we’ll keep that in mind and try to find some other points of disagreement.
The big sports news in our world this week was that on Friday, Major League Baseball handed Trevor Bauer a two-year suspension, the longest suspension (by far) ever meted out in the seven-year history of the league’s Joint Domestic Violence, Sexual Assault, and Child Abuse Policy. This is, no doubt, good news. Reading the tea leaves, we get the sense that the players’ union didn’t fight particularly hard for Bauer, perhaps because he’s generally despised around baseball. He is appealing the suspension, of course, so there will be more of this crap ahead.
That said, we’ve written about Bauer before, and instead of excoriating him again, we’ve decided to leave it alone and tackle a new topic this week. We hope you enjoy, as always.
-Ian and Calder
P.S. We’ve still got a few Southpaw t-shirts in stock, so if you’re interested and haven’t gotten one yet, shoot us a note.
What purpose are Serena Williams and Lewis Hamilton serving in a bid for Chelsea FC?
According to recent reports, the bidding war for Chelsea FC, one of the English Premier League’s most popular clubs, is reaching the final stages. Soon, Chelsea will have an owner to replace Roman Abramovich, the Russian oligarch who’s been sanctioned into financial oblivion due to his ties to Russian President Vladimir Putin.
If you’re curious about why Abramovich has to sell, how the profit will be dispersed, and what has happened to Chelsea in the interim, here's some good reporting on those questions.
We’re more interested in one of the potential buyers of the club, which is expected to sell for over $4 billion — making it the most expensive sale of a sports franchise ever. The leading bid at this point is headed up by a man named Todd Boehly, who owns (with an investment group called Guggenheim Baseball Management) the Los Angeles Dodgers. Boehly is basically your garden-variety finance bro with a little bit of an LA twist. His money comes from Eldridge Investments, an investment company he helped found in Greenwich, Connecticut. Through several intermediaries, he also owns The Hollywood Reporter, and in 2021, amidst controversy surrounding the Golden Globes, the Hollywood Foreign Press named Boehly its interim CEO.
Boehly clearly has both the ego and the capital necessary to own a sports team. With a net worth hovering around $4.5 billion, he’s spent generously to turn the Dodgers into a perennial World Series contender, and the team’s $263.5 million payroll is the highest in the league. He’s been itching to get into the soccer market for a while now, and in 2019, he offered to buy Chelsea from Abramovich for $3 billion, only to have his offer rejected by the oligarch.
The most interesting thing about Boehly, though, is that you’ve probably never heard of him. That is, in some senses, by design. When the Guggenheim group bought the Dodgers from their previous owner—the real estate mogul named Frank McCourt—back in 2012, the name that came up most often wasn’t Boehly’s, or even Mark Walter, the controlling partner of the Guggenheim group. It was, of course, Magic Johnson, the Los Angeles Lakers superstar and an investor in the group.
Unsurprisingly, headlines about the deal frequently read something like: “Dodgers sold to Magic Johnson group.”
Now, Magic is rich. But he is very-wealthy-pro-athlete rich, not founder-of-an-investment-firm-in-Greenwich rich. And while the exact ownership breakdown hasn’t been disclosed, it’s safe to assume that both Boehly and Walter have a larger stake in the Dodgers than Johnson does. And regardless of the numbers, there’s no denying that Magic is the public face of the Dodgers’ ownership.
It’s obvious why Boehly and his fellow finance bros do this sort of thing. They are paunchy, polo-shirt-wearing financiers who still clip their BlackBerries to their belts (see below). On the whole, they look like the type of guys who’ve committed financial crimes, even if they haven’t. Meanwhile, Magic Johnson is Magic Johnson—charming, beloved, and not sporting a belt clip of any sort.
This leads us back to the Chelsea sale. One of the bidding groups that Boehly appears to have beat out was being led by the British millionaire Martin Broughton, who owns the IAG, the parent company of British Airways. Like Boehly and the Guggenheim group, Broughton had convinced two star athletes—Formula 1 driver Lewis Hamilton and tennis superstar Serena Williams—to back his bids.
Although the Broughton-Hamilton-Williams bid has not won the day, it’s clear that even Boehly’s competitors have learned the lesson of the Guggenheim group: Get some big-name athletes to sign onto your bid and let them lead the public charge.
This trend creates an interesting conundrum for the athletes themselves. On the one hand, you don’t want to be trotted out simply as a prize horse to dress up someone else’s financials. On the other hand, owning a stake in a sports team tends to be a pretty decent financial investment, and if you want to make real change within a franchise, it’s helpful to be in rooms with people like Boehly and Broughton when important decisions are being made. Hamilton and Williams, for instance, are both vocal supporters of recent anti-racist movements and have done a fair bit of philanthropic work in their respective communities, and it’s conceivable that they would want to incorporate those commitments into their ownership practices.
So, this is where our two big stories for the week dovetail. If you’re Magic Johnson or Serena Williams or Lewis Hamilton, you are famous enough to become the face of an ownership group. That means that you bear some of the responsibility for the decisions that that group makes. When the Dodgers’ ownership signed Trevor Bauer, for instance, they purportedly didn’t know about his reported history of sexual violence. They did, however, know about his history of harassing women online and his general poor behavior both on and off the field. They chose to sign him anyway. And while no one is blaming Magic Johnson directly for Bauer’s abuse, as the face of the ownership group, he still has to wear that decision. If he was directly involved in the process of approving the Bauer signing, then he and the rest of the ownership should admit their mistake and implement new procedures to prevent abusers from getting multi-million dollar contracts to throw a baseball. If he’s really just an investor in name only, then his seat at the kids’ table might be much more useful to the real money-people in the room than it is to him.
As more players become owners, it will be increasingly important to keep this tension in mind. The point of putting players and former players in positions of power is not only to give current players a representative in the front office—it’s also to ensure that there is at least one person in the front office that cares more about the long-term well-being of the sport and its social impact than about money. If player-owners are only there to enrich themselves and provide PR cover for the real decision-makers, then better that they weren’t there at all.
RODNEY’S ROUNDUP
Do you want to read about. . .
. . . the NCAA’s (doomed) search for a new president? “College sports doesn’t need a new president. It needs three.” by John Feinstein in The Washington Post (April 29, 2022).
. . . the far-right embracing former NBA star Royce White? “How a former NBA player and activist became a far-right media darling” by David Gardner in The Washington Post (April 28, 2022).
. . . when sports federations actually mix with government agencies? “In Azerbaijan, sports and politics mix” by Ulkar Natiqqizi in Eurasianet (April 22, 2022).