Magic Johnson, basketball legend, is now a Dodgers owner

Los Angeles Dodgers will be bought by a group of owners that includes NBA legend Magic Johnson for a staggering $2 billion. The Los Angeles Dodgers sale is the most expensive in professional sports history.

An investment group that includes NBA Hall of Famer-turned-businessman Earvin "Magic" Johnson will buy the Los Angeles Dodgers baseball team from bankrupt owner Frank McCourt. And it won’t be cheap. Per a Tuesday night agreement with Major League Baseball, the team and its facilities will go for $2 billion, shattering the record for the most expensive sports franchise ever purchased.

The former record holder was the Manchester United Soccer club in England, bought in 2005 for $1.4 billion. No franchise purchase in North America comes close: In 2009, the Miami Dolphins went for a paltry $1.1 billion. In 2008, the Chicago Cubs, the former most-expensive baseball team, sold for $845 million. Chump change compared with the new deal.

In buying the Dodgers, Mr. Johnson is part of a large team of investors called the Guggenheim Baseball Management group, which also includes longtime MLB executive Bobby Kasten. Mr. Kasten has served as president of the Washington Nationals and the Atlanta Braves. The controlling owner of the franchise will be Guggenheim Partners CEO Mike Walter. Other stakeholders include movie executive Peter Gruber and Guggenheim Partners president Todd Boehly. Kasten is expected to run the team.

"I am thrilled to be part of the historic Dodger franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles," Johnson said in a statement.

Last night’s agreement, which came mere hours after three finalists were announced, is the first of a series of steps that, barring any snags, will culminate in the team’s sale at auction by April 30. Mr. McCourt, who bought the Los Angeles Dodgers for $430 million, will retain a partial stake in the land and parking lots surrounding Dodger Stadium, worth an estimated $150 million. The deal is subject to approval in federal bankruptcy court.

For Johnson, participation in the Dodgers deal cements his status as the ultimate sports star turned businessmen. The money management track record for the average retired professional athlete is notoriously poor – a star losing his millions in lavish spending and bad deals is an all too common story. But since retiring from a legendary basketball career with the Los Angeles Lakers in 1991, Magic has proven himself a shrewd and highly effective investor. His company, Magic Johnson Enterprises, is worth an estimated $700 million. Its ventures involve investments in poor neighborhoods, including a national chain of “Magic Johnson Theatres” (now wholly owned by AMC Theatres), a successful promotions company, and The Magic Johnson Entertainment movie studio. Until 2010, he held a $10 million stake in the Lakers and served as the team’s vice president. He has additional partnerships with Best Buy, 24-Hour Fitness, and T.G.I. Friday’s.

In addition, Johnson has flourishing careers as a motivational speaker and NBA analyst. As of 2009, his net worth was valued at an estimated $500 million, placing him in a four-way tie with Michael Jordan, Tiger Woods, and Sean “Diddy” Combs as the nation’s third-richest African-American.