Wednesday, April 20, 2011
GO AWAY, FRANK! MLB TO TAKE OVER DODGERS OPERATIONS
Update: Times report of the press release from Bud Selig:
"Pursuant to my authority as Commissioner, I informed Los Angeles Dodgers owner Frank McCourt today that I will appoint a representative to oversee all aspects of the business and the day-to-day operations of the Club. I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball. My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt's ownership. I will announce the name of my representative in the next several days. The Dodgers have been one of the most prestigious franchises in all of sports, and we owe it to their legion of loyal fans to ensure that this club is being operated properly now and will be guided appropriately in the future."Update 2: Bill Shaikin says McCourt was informed of this move late last night, and was given a letter outlining specific issues. I would lurve to get my hands on a copy of that correspondence.
Update 3: There is no truth to the rumor — at least as far as I can tell — that Vin Scully's contract will be sold to a Korean team to make payroll.
Update 4: The New York Times analysis:
The two people with knowledge of Selig’s thinking would not be identified because they had not been authorized to talk publicly about the commissioner’s possible plan of action.Ya think??!
They said Selig believes that McCourt has badly damaged the value and reputation of the Dodgers while concerned only with his own profits and perks.
Although McCourt is not part of Selig’s inner circle, like Fred Wilpon, the principal owner of the Mets, another troubled franchise, it might not be easy to force out even an unpopular owner [emphasis mine].
I have to think Bud's got the votes he needs among other owners to push McCourt out. Guy never acts without knowing he's got consensus.Update 5: Via Craig Calcaterra, TMZ.com reports the McCourts are being investigated by the IRS. This should not come as a surprise; Dodger Divorce wrote about their distributions hiding as tax-free "loans" from their various operating entities back in February.
Update 6: Joshua Fisher at Dodger Divorce finally gets away from his more prosaic pursuits (law school? Bah!) and gives us an earful:
Jamie, for her part, released a statement expressing approval of baseball's actions (link above). However, the necessity of MLB intervention in the first place is likely terrible news for her. Her biggest payday was going to come from either a sale of the team at market value or a massive check coming from the infusion of new capital in Frank's ownership of the Dodgers, through a sale of a minority share, the creation of a new cable network, or a lucrative extension of the club's current TV deal. Now, everything is in limbo.Update 7: Via Dodger Thoughts, AP via ESPN is reporting the Dodgers could ultimately land on the auction block:
A person familiar with Selig's thinking said the commissioner may choose to force a sale. The person spoke to the AP on the condition of anonymity because Selig's statement did not mention that.Update 8: Dylan O. Hernandez tweets that Ned Colletti has not been told who his new boss is.
Update 9: Tim Brown at Yahoo:
This, you should know, is not only about Frank McCourt’s inability to make payroll last week, for which he secured a $30 million loan from Fox, as the Los Angeles Times reported. Nor was it only about firing the security chief just before he let all the people into his building. Nor was it only about funding his divorce through season-ticket and beer sales. Nor was it only about a team that sometimes looks like it should be in Pittsburgh and not the second-largest market in the country.That, and the fact that with the team so very indebted, the clearing price for a forced sale would be around the $300M remaining in equity estimated by Forbes. With the Wilpons on the hot seat due to the ongoing lawsuit that could conceivably wipe them out, the last thing Selig wants to see is a transaction that could erode franchise values — especially one that would be used as a comp for his friends' team.
This was about all of it, every stinkin’ inch McCourt has taken, when he should have given two. This was about a franchise that can’t know how it will live tomorrow, since it never thinks about tomorrow, since it’s already borrowed against all of tomorrow’s money. This was about an owner securing a $30 million loan, using as collateral the settlement he expects to win from suing his own former attorneys at Boston’s Bingham McCutchen, which drafted the faulty marital property agreement. And then about being so desperate to take a below-value television deal in L.A, potentially devaluing other owners’ future contracts in places that aren’t L.A.
Steve Dilbeck in the Times has more. Apparently the Fox loan was collateralized by a promise to give Fox any proceeds from a suit against Bingham McCutcheon in case of default.
"No accountant would even let you put that on your balance sheet," said Raman Sain, principal at Holthouse, Van Carlin & Trigt, a Southern California accounting firm that reviewed the Dodgers' financial records for The Times last year.Update 10: More from Josh Fisher:
Sain said the nature of the loan -- as opposed to McCourt getting a traditional bank loan or line of credit -- indicated the Dodgers' financial situation was "pretty dire."
Total MLB takeover is a real possibility, but I want to spend a moment talking about one not quite as public at the moment: a sale in bankruptcy. A factor leading to bankruptcy, of course, is insolvency. I have no idea if the McCourt Enterprise's debts exceed its assets. But we have strong evidence that the Dodgers were very near the point of being unable to pay bills as they came due. MLB's intervention might keep the McCourt regime from having to declare bankruptcy, but there may come a point at which availing himself of bankruptcy protections and the opportunity to reorganize his finances might be attractive to Frank from a business standpoint.Jamie, he writes, "might be seeing a 9-figure payday vanish into thin air", and I'm inclined to agree. In fact, I wouldn't be surprised to see both of them in irons at a Club Fed near you.
County supervisor Mike Antonavich wants to see Peter O'Malley run the team as an agent of MLB. I agree with others, who say that Kim Ng, recently transported to the Commissioner's office, would be in the best possible position to land here and become the team's overlord.
Update 11: One last post before tackling the day's games: Jon Weisman on the irredeemable Frank McCourt. Excerpt:
... as I walked through all the different stories about today's news, as if I were a shopper in a McCourt Mall of Horrors, I found myself thinking about the person whose name has been in the news, top of mind, every day this month until today: Bryan Stow.If Jon's analysis is right — and there's good reason to think that it is — there's a tremendous irony in the prospect that the senseless bludgeoning of a Giants fan at Dodger Stadium impelled Bud Selig to finally eject the McCourts from their ownership position.
The Giants fan whose horrifying beating in the gloaming of Opening Day in the Dodger Stadium parking lot March 31 will not be found on any McCourt spreadsheet. The severity of the event, sadly enough, wasn't even unprecedented in Dodger Stadium history.
But in the days after it occurred, as you felt the groundswell of horror and shame sweep through the world of the Dodgers - an emotional wave that only gained momentum with McCourt's initial public declaration that nothing could have been done to prevent it - I began to feel that Stow's beating, more than any rising parking fees, inconsistent spending on players or appalling revelations of greed in court documents related to McCourt's divorce from wife Jamie, was the baseball world's "Network" moment.
It was just too ugly, and people weren't going to take it anymore.
I think McCourt realized this too, which is why, at a certain point this month, you started to see almost daily press releases, press conferences or other kinds of announcements determined to show his commitment to rehabilitating the Dodgers' (and in turn, his) relationship with the fans and baseball.
Labels: bryan stow, dodgers, good riddance, mccourts
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