A unit formed by new Wall Street powerhouse Guggenheim Partners is about to be hit with a $1 billion beanball, The Post has learned.
The new owners of the LA Dodgers are being forced to rework their pending $7 billion, 25-year media rights deal with Time Warner Cable, three sources close to the situation said.
The new deal could end up seeing the unit, Guggenheim Baseball Management, fork over $130 million a year to Major League Baseball under its revenue-sharing agreement, these sources said.
That’s more than 50 percent higher than the $85 million Guggenheim had expected to pay. GBM anticipated that MLB would continue a 2011 Dodgers revenue-sharing agreement rather than adopt the current arrangement.
Over the life of the deal, the massive mess-up in the structure of the deal could cost Mark Walter, Guggenheim’s CEO; Todd Boehly, its president; and Alan Schwartz, the New York company’s executive chairman, more than $1 billion in lost revenue.
The lost loot could hamper GBM’s ability to service the debt on the record-setting 2012 $2.15 billion purchase of the Dodgers or to maintain the team’s $216.6 million payroll, which is the second-highest in MLB.
While the amount GBM owes MLB under the deal will change, the $7 billion Time Warner Cable is on the hook for will not change.
MLB objected to the deal because much of the $7 billion in rights fees to the newly formed Regional Sports Network was guaranteed no matter how successful — or not — it turned out to be.
Such an arrangement is unusual for a TV-rights deal.
MLB teams must share revenue that flows from media-rights deals signed with RSNs.
Guaranteed revenue streams are subject to MLB’s 34 percent revenue-sharing agreement.
Guggenheim appears to be prepared to agree to the new conditions, four sources said.
The Dodgers — five months after announcing the media deal — have still not submitted it to MLB for approval, fearing it would be rejected, sources said.
MLB wants the revenue-sharing terms to be in line, on a pro-rata basis, with other media contracts.
Meanwhile, Guggenheim Partners, a global financial firm, may come under pressure from New York insurance regulators.
The company used cash from some of its insurance companies to help fund the Dodgers purchase.
Benjamin Lawsky, the superintendent of New York’s Department of Financial Services, is looking into forcing Guggenheim to increase the insurance companies’ reserves to offset the cash used in the Dodgers deal.
“One area we’re concerned about is private equity firms taking on riskier investments to try and juice up their returns,” Lawsky told The Post.
“People count on this money for their retirements, and we want to make sure it’s there when they need it,” he added.
Lawsky believes he has broad powers to protect all Guggenheim policy holders, and has issued a subpoena for Guggenheim’s records.
GBM, when it closes the Time Warner cable deal, could form a holding company and borrow money against it, moving GBM money from its insurance reserves. Guggenheim and MLB declined to comment.