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Thursday, April 21, 2011

More On MLB's Dodger Coup

When I started this blog in 2004 (!), one of its aims if not its principal goal was to cheer on the exit of the McCourts. The McCourts make great villains: greedy, spendthrift, and foreign, they nonetheless provided a useful backdrop for what has turned out to be some remarkably good years, considering their late history under Peter O'Malley.

But the divorce exposed them for who they really were, and that was a story of wasted resources, of an unprecedented looting of team finances to support unimaginable personal opulence. The Bryan Stow beating may not have been the last straw, as Jon suggested yesterday, but it certainly was an additional warning sign that the McCourts had no particular concern about the team (recall that at the time of the beating, there was no head of security).

My own view of Selig's motivations is that Jay Jaffe is right: Selig has the votes needed to force a sale of the team. Why would that be? The obvious reasons to me are twofold:

  1. Frank's indebtedness directly attacks the valuation of the Dodgers, which in turn erodes the value of all other franchises. If, as the Forbes analysis is correct, McCourt's scheming and borrowing had eroded the amount of equity remaining in the team. All it could be sold for would be perhaps $300M — a pittance. With a sale imminent, either of partial or full ownership, there was simply no way the other owners could watch such a debacle.
  2. For Bud, it's personal. The other team that is likely to go on the auction block soon is that of his close friend, Fred Wilpon, who may need to liquidate the team in order to satisfy a judgement against him thanks to his witless involvement with Bernie Madoff. Selig cannot stop that from happening, but a low valuation for the Dodgers would be reflected in the sale price of the Mets. For the Wilpons, that could be the difference between penury and survival.
The last-ditch attempt to get a personal loan from Fox, backed by the Bingham McCutcheon lawsuit shows just how dire Frank's cash situation was. If Bud hadn't pulled the plug yesterday, it would be a bankruptcy court, or maybe a disgruntled player whose six-figure paycheck bounced. While embarrassing to the league, none of that would have been enough to justify taking over the team. Only a direct threat to other owners could do that.

I hope that this will be the real beginning of the end. We've had so many false endings with the McCourts that it's been like a bad slasher picture.


Update: Mike Ozanian once again:
... Selig will prevail because he will use “The Best Interests of Baseball” power of his office (which he has widened under his stay in office) to say that McCourt violated his fiduciary duty to the Dodgers by using the team’s finances to buy real estate.
Update 2: New employee (?) Steve Soboroff defends his boss:
Soboroff, a former advisor to former Mayor Richard Riordan, a mayoral candidate and the developer of Playa Vista, was hired by McCourt on Tuesday. In a meeting with reporters, Soboroff said, "Frank McCourt is financially fine."

Selig was said to be aghast at that statement, but Soboroff did not back down. He cited the Fox deal, potential real estate development in the Dodger Stadium parking lot and unidentified "other potential new revenue sources" as untapped sources of revenue for McCourt.

...

"We need more people like Frank McCourt."

Okay, Steve, I'll take that as a vote for "I, too, wish to be hated and derided like the sycophant I am." Yesterday's statement — nowhere to be found on the Dodgers' website — sent out by Josh Rawitch, was telling in what it did not say:
"Major League Baseball sets strict financial guidelines which all 30 teams must follow. The Dodgers are in compliance with these guidelines. On this basis, it is hard to understand the Commissioner's action today."
Up is down, and down is up.

Also: belated thanks to Jay Jaffe for forwarding an audio clip of Vinny's characteristically we're-here-to-watch-a-baseball-game remarks prior to yesterday's CG.

Update 3: I think I would read the phone book if it had Craig Calcaterra's byline.

If you’re thinking that this is a warning shot from McCourt to Bud Selig, you’re right. That kind of claim — baseball is interfering with our right to make money! — is the stuff of a tort action. And while I was somewhat dismissive of the prospects of a lawsuit in my posts earlier this morning [links mine -- RLM] — and on a straight “does baseball have the right to do this” basis, I still think McCourt has no legitimate claim — these comments (and some more research into Frank McCourt’s more-litigious-than-I-remembered history) make me wonder if we’re not ready for Armageddon.

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