Part of the discussion about the Dodgers Gondola project, which has been largely overlooked to date, concerns what will happen to the parking lots at Dodger Stadium after the project is completed, which is a large if, at this point.
As we have covered, the Covenants, Conditions, and Restrictions (CC&Rs) of Dodger Stadium Section 2.1.1, commercial development of the parking lots is wholly dependent on getting mass transportation (as defined in Section 5.1.2), “as including, without limitation, a subway
or a lightrail [sic]”) servicing Dodger Stadium.
How a gondola is actually a subway or light rail is a question for another day.
Five years ago, no one would have guessed that the terms ejusdem generis or statutory construction would show up at True Blue LA, but the times they are a-changin.’ Rather than discuss the operation of a gondola system, whose costs are still entirely unknown at this point, or Dodger Stadium Express, whose costs are known to the penny for the next three seasons — a topic we will cover next time, it is time to take a step back.
Everyone is focused on the impending lockout of the sport this coming December, with good reason, but if you take a step back, from the Dodgers’ perspective, the issues underlying the lockout and the Dodgers Gondola project are really the same story, just told from different perspectives.
While the shiny bright object of the pending strife is the question of a salary cap, the underlying story is the allocation of money to franchises, as sourcing has been upended by market changes. The Dodgers have largely been immune to these concerns as they are benefiting from the current system, but they have hardly broken it.
If anything, the organization perfected an imperfect model. When one looks at the landscape of baseball in this context, one should notice three prevailing trends:
- The Dodgers have the largest television rights deal in the sport (and the incompetence of Frank McCourt and MLB owners is largely to blame).
- Most other teams have had to deal with the death of the regional sports network model, and
- Teams are mimicking the Atlanta Braves’ model of serving as commercial landlords to line their own coffers.
Life as a Media Juggernaut
Baseball finances for most teams, apart from the Dodgers, are in flux due to the demise of the regional sports network system. Unlike the NBA and the NFL, which generally rely on national media revenue, other MLB teams are more reliant on regional/local media revenue. Most MLB teams, if not all, except Atlanta, do not make their finances public, so the figures below are not definitive; one would be wise to take them with a grain of salt.
As discussed in depth elsewhere, the Dodgers have a 25-year, $8.35 billion media deal, the largest in the sport.
Maury Brown of Forbes summarized the recently revisited controversy regarding the Dodgers’ alleged sweetheart deal regarding their media rights:
During the bankruptcy sale, McCourt sought to determine what the “fair-market value” of the Dodgers’ media rights might ultimately be, which could be higher than what he had been seeking with FOX when the sale finally closed. These “special terms” determined in the court-controlled proceedings amounted to $84 million annually, with escalators. By setting that figure, it put in motion the revenue-sharing terms for a future deal: the league taking 34% and distributing it to the league’s payees.
As history shows, that projected “fair-market value” was woefully short.
Guggenheim Partners eventually purchased the Dodgers for $2.15 billion in 2012, and said that a key part of their offer was the “special terms” for the projected local media rights. In 2013, the Dodgers went 50/50 with Time Warner Cable to launch Spectrum Sportsnet LA, the new regional sports network launched for the Dodgers in 2014, is a 25-year deal valued at $8.35 billion.
At the time, Maury Brown, then of Baseball Prospectus, reported on the “special terms” in question. The special terms set the Dodgers’ annual TV rights fees from the regional network at about $84 million, plus a 4 percent annual escalator, for the life of the contract the team signed with the network.
Current baseball rules require that big-market teams share 34 percent of regional network rights fees with small-market teams. Unlike NFL franchises, which receive equal shares of league-negotiated TV rights fees, MLB teams have widely varying broadcast revenues. The 34 percent revenue-sharing requirement was intended to level the playing field.
Here, that result did not play out.
Per the Los Angeles Times’ reporting, the average annual value of the Dodgers’ deal is $334 million. Once again, Mr. Brown (this time, from Forbes):
Needless to say, the league and other owners weren’t happy with the 34% of $84 million annually that had come out of the bankruptcy proceedings, but the Dodgers pointed out that those terms were driven by court proceedings.
MLB and the Dodgers did get those figures adjusted, but even so, they come woefully short of the AAV the Dodgers are getting….In 2012, the league steadfastly claimed that “All up-front cash payments and all annual rights fees shall be subject to revenue-sharing under normal principles.” The problem is, “all” was the amount subject to the bankruptcy sale based on the then “fair-market value.”
By allowing Frank McCourt into the club of MLB owners, MLB set in motion a series of events that led to the Dodgers gaining access to wealth beyond the dreams of avarice, something one could not have imagined while the organization was in the throes of bankruptcy.
In 2013, Bill Shaikin of the Los Angeles Times reported that the Dodgers and the league had hashed out a compromise.
After negotiations, MLB and Guggenheim made a modest adjustment, setting the “fair-market value” of the Time Warner deal at about $130 million for the first year rather than $84 million. That figure is used to determine the league’s cut, which for all local TV deals has since increased from 34% to 48%.
Ultimately, under this arrangement, Mr. Brown estimated that the Dodgers would retain an additional $2 billion that they would otherwise have shared with the league over the life of the deal. Needless to say, this figure is a source of agita in some corners of the league, given the financial might the Dodgers have finally unleashed during the past couple of seasons.
While MLB continues to bumble around its media rights, especially given the additional hoops one must jump through to access MLB streaming in 2026, the Dodgers are largely insulated from regional network concerns. This fact stands out, particularly given that the league will assume additional broadcasts in 2026, while the Dodgers glide above such concerns.
The Dodgers have built a financial juggernaut, with reported sponsorships from the Ohtani signing totaling roughly half of the league.
The rest of MLB plays at being commercial landlords
To compensate, the other teams in the league have had to adjust.
In that adjustment, certain realities have started to become painfully clear. Extra money has to come from somewhere. Where the Dodgers have largely risen above the difficulties with media rights, an aspect where the team is stagnant is the development of an alternative revenue stream, namely, commercial landlord income from team-owned land in the direct vicinity of the ballpark.
After all, if local/regional funds are in flux, most teams have scrambled to replace or address this instability by mimicking the Atlanta Braves and their Battery neighborhood. The gist is that the team owns the land around Truist Park and collects rent from its tenants as a year-round source of income.
Accordingly, the question at Dodger Stadium feels like it has shifted from “if the parking lots will be developed” to “when and how the parking lots will be developed,” because the economics of baseball have permanently changed under the system described above. The Dodgers are in no rush to develop the parking lots, but given the Gondola’s likely marginal impact on stadium traffic, there is no logical reason to build the bloody thing unless one were trying to unlock commercial development at Dodger Stadium.
For those who have never been to Atlanta when the Dodgers are around (which is fair because of both distance and objective racism), one might wonder what is around the ballpark: generally, restaurants, venues, and stores with operating hours one might expect in Fresno, California, i.e., things close earlier than one might think, especially on Sunday. The Braves also acquired a nearby six-building office complex, called Pennant Park, in 2025.
As the Braves are owned by a publicly traded company, the franchise is an anomaly in MLB: its books are open, even after being spun off from Liberty Media. On February 25, the team issued a press release regarding its legally mandated filing with the government.
Highlights include:
- Total revenue grew to $732 million in 2025, up 11% from the prior year.
- Baseball revenue increased 7% from the prior year to $635 million.
- Mixed-Use Development revenue grew 45% from the prior year to $97 million.
- Total Adjusted OIBDA(1) grew to $108 million in 2025, up 172% from the prior year.
- Baseball Adjusted OIBDA grew to $51 million in 2025, an increase of over $44 million from the prior year.
- Mixed-Use Development Adjusted OIBDA grew 51% from the prior year to $69 million.
- Operating income (loss) improved by $26 million to $(14) million, down from $(40) million in the prior year.
What MLB owners are counting on is for most to come up with the following conclusion to these numbers: “Oh no — Atlanta lost just under $30 million last year?!?”
Is Atlanta broke? Not really.
Rob Mains of Baseball Prospectus published a superb breakdown of Atlanta’s books in late February and skewered the league’s likely argument in labor negotiations going forward:
You look at those [negative] numbers and you think, “Geez, a company that has over two-thirds of a billion dollars in revenues loses tens of millions of dollars per year. Baseball must be a money-losing business. No wonder the owners need payroll relief.”
The numbers reported by the Braves are real. They’re not making them up. In fact, they are reviewed by the company’s independent audit firm, KPMG LLC. (See their letter on page III-12.) So why does Forbes, in its annual review of baseball finances, and people like me insist that the industry’s in what the Brits would call rude health?
I am sorry to tell you that I’m going to have to explain accounting. If that’s asking too much—I understand—suffice it to say “Yes, of course, it’s profitable”…
[emphasis added.]
Mr. Mains then describes generally accepted accounting principles (GAAP, pronounced “gap”) for the uninitiated, which standardize the reporting of operating income and net earnings.
Once again, Mr. Mains:
The Braves own, in addition to the ballclub, The Battery, a real estate development adjacent to the ballpark. Real estate entails a lot of depreciation. The roof, the [heating, ventilation, and air conditioning], the furniture, all of it has a limited lifespan. So it generates substantial depreciation charges. But the Braves don’t have to write a check for that. It doesn’t affect their cash flow…
Depreciation and amortization are legitimate charges. They’re supported by GAAP. But they don’t mean the Braves losing money in way most people think of it, i.e., running down their cash balance.
Yes, GAAP says [the Atlanta Braves] are in the red. But Forbes doesn’t. I don’t. Even the Braves themselves don’t. Every quarter, in addition the GAAP amounts, they report “Adjusted OIBDA,” which they define as operating income before various noncash and nonoperating charges that GAAP includes in net income, including depreciation and amortization. They even helpfully include a table showing the difference between Operating income (GAAP) and OIBDA (non-GAAP).
…Which numbers are correct, the GAAP losses or the non-GAAP gains? I had a career as a financial analyst, using the financial statements of companies to develop valuations of the stocks they issued in order to recommend them to investors….I generally used non-GAAP measures to derive valuations. They paint a clearer picture. Look, if the Braves were losing $30 million a year, they wouldn’t be able to borrow money, and they’d be running out of cash.
[emphasis added.]
Moreover, if Atlanta were losing that much money per year, Atlanta would not be able to extend Chris Sale for $27 million/year or make any other major additions, which is a discussion for our eastern colleagues at our sister site, Battery Power. They reported on the financial health of the Braves and concurred with Mr. Mains:
The Braves are a baseball club and also practically a real estate investment trust. Don’t make me tap the sign. It’s boring, but mixed-use development is where they profit the most. And to be honest, they could double their hotels, shops, restaurants, and parking outside the ballpark and still have room to grow.
Event hosting on the Braves’ properties is strong. They said there were 380 total events and concerts in 2025. And of these 147 were held at the Coca-Cola Roxy, 144 on the common areas, and 95 Truist Park events…
…The Braves paid off 21 million dollars in debt this last quarter. Their long term debt is up slightly more than 10 million dollars. Pennant Park cost the Braves 93 million. If you assume the Braves debt obligations are 21 million in a three-month period (as is the case with fixed payments), they have made 84 million dollars in debt payment this year. They did this without touching their revolving debt (kind of like a line of credit) and actually pay it down by 25 million.
So they effectively made almost one Pennant Park-sized property worth of debt payments this year. They appear to have the head room for more purchases. Another way to look at it is that in seven or so years, they can be debt-free. With zero debt payments, they could have pay 84 million dollars worth of players.
The revenue stream from commercial property is the way of the future. Look at every other franchise in MLB, and you will see teams either buying up or developing commercial real estate (hello, San Francisco), trying to relocate to build commercial real estate (hello, Kansas City, to varying success), or building new stadiums (hello, Tampa Bay), even in the face of incompetent ownership (hello, Las Vegas). Even the Cubs are trying to control the rooftops overlooking Wrigley Field.
Moreover, it would not be a difficult leap to imagine that ownership groups would not wish to share this revenue stream with players, even in the unlikely event of a salary cap being imposed/agreed to. If one were looking for a future potential third rail in labor negotiations, splitting the revenues from commercial real estate is an obvious candidate.
The Dodgers do not have this problem — yet.
The Dodgers currently have a literal sea of undeveloped parking lots and are riding high on the figurative hog of the current media deal. However, the Dodgers are not the type of organization to just sit still while the rest of the league rushes to become commercial real estate landlords.
One can be forgiven for forgetting the dark times of previous ownership.
Frank McCourt commissioned the Next 50 plan to modernize Dodger Stadium during his ownership, which clearly did not happen. For those who have forgotten, the original plans, which are still accessible, state the following:
The Dodger Stadium “Next 50” plan features Dodger Way, a ceremonial new “front door” and urban plaza surrounded by an administrative office building for the Dodgers organization; the Dodger Experience an interactive museum showcasing the history of the Dodgers and baseball in Los Angeles; a 20,000 square foot flagship Dodger Store; and the Dodger Cafe. Connecting all the elements of the project is The Green Necklace – a ring of gardens, open plazas, and amenities around the stadium, which moves the fan experience outside the walls of the stadium so they have activities which can extend their time at the ballpark beyond the game. The Top of Park plaza located at the highest elevation on site will feature breathtaking 360 degree views spanning the Downtown skyline and Santa Monica Bay, the Santa Monica and San Gabriel Mountains, and the Dodger Stadium diamond. Other features within the Green Necklace are two, 8-level, 900-car parking structures and a series of food service /retail concession clusters.
While the Guggenheim Group has upgraded Dodger Stadium during its ownership tenure, most notably by finally giving the stadium a badly-needed front door with the addition and renovation of Centerfield Plaza, it has never formally or publicly abandoned Next 50.
As we have established, the Next 50 plan cannot be implemented until the CCR requirements are met, which is not possible until the Gondola is completed. And as we have covered these last few years exhaustively, the Gondola Project is far from a sure thing. Still, it would be heartening if stakeholders were having conversations about the effect that any development would have on Dodger Stadium’s neighbors rather than regurgitating the same arguments about the Gondola itself.
