The new majority owner of the Dodgers is close to acquiring the Santa Monica-based production company for nearly $400 million, the LAT is reporting. That would be almost double what the current owner paid just five years ago. What's next, Variety for $500 million?
As was the case with the Dodgers deal, rival bidders are saying that the price Guggenheim is paying, if accurate, is out of whack with what the company is worth. Privately held DCP doesn't disclose financial information, but industry executives familiar with the company estimated its annual earnings before interest, taxes, depreciation and amortization (EBITDA) at between $35 million and $40 million, almost double from what it was prior to the Red Zone acquisition. The company also has about $165 million in debt and $18 million in cash. The valuation that Guggenheim is reportedly placing on the company -- 10 times EBITDA -- had other potential suitors shaking their heads. They said a more reasonable price was between $250 million and $300 million.