McCourts reach divorce settlement, to decide Dodgers fate

http://www.dodgerdivorce.com/

Good resource for all things Dodger divorce related. Perversely enjoyable.

MLB rejects Dodgers' TV deal, Frank McCourt screwed, Dodgers in limbo

-Link-

The TV deal has been reported to be worth $3 billion and Frank McCourt would receive $385 million upfront. That money was critical to the financial health of the Dodgers. MLB's action nullifies the divorce settlement, sending the McCourts back to the drawing table and thrusts the Dodgers into limbo.

MLB issued a statement explaining the decision.

"This decision was reached after a full and careful consideration of the terms of the proposed transaction and the club's current circumstances," commissioner Bud Selig said in a statement. "It is my conclusion that this proposed transaction with FOX would not be in the best interests of the Los Angeles Dodgers franchise, the game of Baseball and the millions of loyal fans of this historic club."

Selig also said in his statement that he sent a letter to McCourt where "expansive analysis" for his rejection of the TV proposal was explained. The Dodgers' current TV deal with Fox expires in 2013.

Frank McCourt was disappointed with the league's ruling, according to a statement released by Steve Susman, senior partner of Susman Godfrey.

"We are extremely disappointed with the Commissioner's rejection of the proposed FOX transaction which would inject $235 million into the Los Angeles Dodgers," the statement read. "As Commissioner Selig well knows, this transaction would make the Dodgers financially secure for the long term and one of the best capitalized teams in Major League Baseball.

"Commissioner Selig's letter of rejection is not only a disappointment, but worse, is potentially destructive to the Los Angeles Dodgers, and Major League Baseball. Accordingly, we plan to explore vigorously our options and remedies with respect to Commissioner Selig's rejection of the proposed FOX transaction and our commitment to protect the long-term best interests of the Los Angeles Dodgers."

MLB had taken control of the troubled franchise and was investigating the team's finances. Selig said he would not make a decision on the TV deal until that process was complete. But Selig indicated in Monday's statement that the terms of the divorce settlement in which a large chunk of the Fox up-front money would not go to the Dodgers led to his decision.

Best news that could happen for Dodger fans (and baseball fans). Selig finally showed his spine for once. McCourt wll now most likely sue MLB and this will take a couple of years, but the process has at least started. It sucks that the Dodgers will most likely lose their talent in the interim (Matt Kemp, Ethier, etc.). But the long term gain of losing McCourt trumps the short term loss.

"Samphin wrote:

Best news that could happen for Dodger fans (and baseball fans). Selig finally showed his spine for once. McCourt wll now most likely sue MLB and this will take a couple of years, but the process has at least started. It sucks that the Dodgers will most likely lose their talent in the interim (Matt Kemp, Ethier, etc.). But the long term gain of losing McCourt trumps the short term loss.

Yeah, and I "hate" the Dodgers, but McCourt is such a dbag I can see him leveraging everything he can sell then crying about bankruptcy, the new owners would be left with a bad situation.

McCourt remind me of a mixture of Harcourt Fenton Mudd:

http://www.youtube.com/watch?v=Ag1EbxYKh_4

And Carter Hayes.

http://itsaboutthemoney.net/archives/2011/06/21/commissioner-selig-frank-mccourt-must-go-a-petition/

Absolutely an amazing piece for anyone who may have questions how McCourt's screwed up this franchise...wow.

If you don’t closely follow events west of the Rockies (or west of the Hudson), here are the basic facts about McCourt’s ownership of the Dodgers. McCourt bought the Dodgers from News Corp (Fox Sports) with $150 million he borrowed from Bank of America, $75 million he borrowed from Major League Baseball (MLB) and a $196 million debt package from Fox. That’s $421 million of debt.

After the purchase, McCourt rearranged this debt to his liking. McCourt traded his Boston parking lots to Fox in exchange for forgiveness of some of the Fox debt. Then he caused a Dodger affiliate, Dodger Tickets, LLC, to borrow $250 million to refinance most of the remaining acquisition debt. Plus McCourt cashed in on $50 million of “rebates” from Fox. With this rearrangement, McCourt effectively purchased the Dodgers – for a final purchase price of between $355 million and $371 million – in exchange for parking lots and $300 million (more or less) of debt. By all reports, McCourt put not one dime of his own into this purchase. Moreover, McCourt did not himself have to borrow the money used for the purchase – he got the Dodgers to do it for him.

It’s been frequently reported that McCourt “bought the Dodgers on a credit card”. That’s only half the story. The other half of the story, the more important half, is that McCourt bought the Dodgers on the Dodgers’ credit card.

Once McCourt had control of the Dodgers’ credit card, he continued to use it, this time to finance his family’s cost of living. Then Dodgers’ Executive Vice President Jeff Ingram (now team Vice Chairman) testified that the Dodgers built their team budgets around the personal cash demands made by the McCourts – from a financial standpoint, the team’s top priority was to raise the funds required by the McCourt family. Ingram described it like this: the “family and business checkbooks were largely one and the same.” Ingram actually testified that the family used the team like a “credit card”.

In an email disclosed in Jamie McCourt’s divorce filings, Ingram describes Jamie McCourt’s attitude towards the Dodgers as follows: “why have a family business but to support the family lifestyle.” Remember, Jamie McCourt was the team’s CEO. Jamie McCourt had the power to reach for the Dodgers’ checkbook and sign the checks herself.

How did the Dodgers manage to fund the McCourt lifestyle? Let’s start with salaries: Jamie McCourt received up to $2 million annually for her services as Dodgers’ CEO. Frank McCourt received up to $5 million annually from one or more businesses affiliated with the Dodgers. The Dodgers also paid up to $600,000 in annual salary to two of the McCourt children, one of whom was attending Stanford University and the other of whom had a full-time job at Goldman Sachs.

But $7.6 million a year was not nearly enough money to meet the needs (estimated at over $2 million a month) of the McCourt family. The McCourts spent money at a rate that turned heads, even in Los Angeles. Best known is the McCourt appetite for real estate. After buying the team, the McCourts proceeded to buy four homes in Los Angeles – two in Malibu, two near the Playboy Mansion – at a combined cost of around $89 million. This figure includes the estimated cost of McCourt “improvements” to these homes, including a roughly $14 million bill for tearing out tennis courts at one property and replacing them with a swimming pool. Then there were the other expenses: the vacation properties, the private jet, the private drivers, the hairdresser who worked exclusively for the McCourts five days a week … the list goes on and on. Here’s an expense that’s one of my personal favorites: over one 18-month period, Jamie McCourt paid over $100,000 to various florists, and charged the Dodgers for the expense.

The McCourt lifestyle unraveled when Frank McCourt fired his wife as Dodgers’ CEO, claiming that Jamie McCourt was having an affair with her driver. (Naturally, the driver’s salary was being paid by the Dodgers; Frank McCourt has alleged that his ex-wife and her driver spent 2½ weeks together on vacation in France, with the Dodgers once again paying the tab.) In turn, Jamie McCourt filed for divorce, and claimed half ownership of the team. But the McCourt’s wild spending did not stop with the divorce filing. Despite the McCourts’ owning four homes in Los Angeles, Frank McCourt currently lives in a suite in the newest luxury hotel in Beverly Hills, at a cost north of $30,000 a month. Meanwhile, Jamie McCourt reportedly uses one of the McCourt’s multi-million dollar homes “exclusively for swimming”, while a second is used to store furniture. Plus each McCourt has hired floor-fulls of lawyers and accountants to fight the divorce. Remember: the Dodgers are ultimately paying for all this, because neither McCourt has any other source of income.

How much have the McCourts managed to extract from the Dodgers? Well, if we ignore the debt the Dodgers took on so that the McCourts could buy the Dodgers but include the McCourt salaries, the McCourts have withdrawn from the Dodgers anywhere from $109 million (Frank McCourt’s estimate) to $141 million (Jamie McCourt’s estimate). The truth is, the real amount the McCourts plundered from the Dodgers may be more than $141 million – at the moment, all we have to go on is what each McCourt has been willing to admit to

.....(read rest at site) Crazy Graphic about the SCHEME McCourts set up to steal money's that should have been put back into the club and MLB.

"BigDogsHunt wrote:

http://itsaboutthemoney.net/archives/2011/06/21/commissioner-selig-frank-mccourt-must-go-a-petition/

Absolutely an amazing piece for anyone who may have questions how McCourt's screwed up this franchise...wow.

.....(read rest at site) Crazy Graphic about the SCHEME McCourts set up to steal money's that should have been put back into the club and MLB.

and just think, he is the guy that should have owned the Sox not the Henry group....

"finyank13 wrote:

and just think, he is the guy that should have owned the Sox not the Henry group....

No that's completely false and something McCourt spread to the public. McCourt was never seriously considered for the Red Sox and in fact if Henry's group didn't get the Sox the next in line was James Dolan, which would have been another disaster. Numerous reporters (i.e. Gammons, Heyman etc) have shot that down numerous times.

Not sure if this was mentioned in anyone's links but the best case for the Dodgers would be for McCourt to default on payroll this month (which is definitely possible especially since Manny Ramirez is owed 6 million alone by the end of June). That way MLB can step in and kick McCourt out and take over the team and ultimately put it up for sale as soon as possible.

So really ANY fan of baseball, whether you like the Dodgers or not, should be rooting for McCourt to default this month. I firmly believe that every sport is better when you have your major big market teams good (not saying that have to make the playoffs every year but they need to be in the races deep into the season).

"Ray Finkle wrote:

No that's completely false and something McCourt spread to the public. McCourt was never seriously considered for the Red Sox and in fact if Henry's group didn't get the Sox the next in line was James Dolan, which would have been another disaster. Numerous reporters (i.e. Gammons, Heyman etc) have shot that down numerous times.

Not sure if this was mentioned in anyone's links but the best case for the Dodgers would be for McCourt to default on payroll this month (which is definitely possible especially since Manny Ramirez is owed 6 million alone by the end of June). That way MLB can step in and kick McCourt out and take over the team and ultimately put it up for sale as soon as possible.

So really ANY fan of baseball, whether you like the Dodgers or not, should be rooting for McCourt to default this month. I firmly believe that every sport is better when you have your major big market teams good (not saying that have to make the playoffs every year but they need to be in the races deep into the season).

There were more mysteries in that deal than Area 51.......Gammons I will never really consider as legit, the guy is a homer in the truest sense, Heyman however is interesting...any link??

Because a simple google search provides numerous links of McCourt trying steadfastly to purchase them.....not that I dont believe you Fink, you are always honest on here...

Agreed on your last paragraph, how the Dodgers have remain irrelevant for this long puzzles me....

"finyank13 wrote:

There were more mysteries in that deal than Area 51.......Gammons I will never really consider as legit, the guy is a homer in the truest sense, Heyman however is interesting...any link??

Because a simple google search provides numerous links of McCourt trying steadfastly to purchase them.....not that I dont believe you Fink, you are always honest on here...

Agreed on your last paragraph, how the Dodgers have remain irrelevant for this long puzzles me....

No links unfortunately but I just remember either reading/hearing from numerous reporters that McCourt was never really considered and I'm almost positive it was talked about in "Feeding the Monster" a book about some behind the scenes stuff that went on with the franchise from the time Henry's group took over the team until 2007. Yes he wanted to buy the club because that was his hometown team and he was from Boston but he was never a real candidate. Much like anytime Mark Cuban says he wants to buy MLB Team X for example.

EDIT: I just did a quick search and found this link from Yahoo Sports:

http://sports.yahoo.com/mlb/news?slug=ycn-8338955

Many fans may remember that when the Red Sox went up for sale in 2002, Frank McCourt was one of initial bidders to buy the team. As a Boston real estate developer, McCourt wanted to buy the team and build a new stadium on the South Boston waterfront. However, the bidding soon climbed beyond McCourt's means, settling at $700 million when the team was sold to John Henry and his group. McCourt would settle for the Dodgers instead, buying the team for $430 million in 2004.

So yeah basically McCourt threw his name into the bidding but didn't have enough capital to be a serious candidate.

"Ray Finkle wrote:

No links unfortunately but I just remember either reading/hearing from numerous reporters that McCourt was never really considered and I'm almost positive it was talked about in "Feeding the Monster" a book about some behind the scenes stuff that went on with the franchise from the time Henry's group took over the team until 2007. Yes he wanted to buy the club because that was his hometown team and he was from Boston but he was never a real candidate. Much like anytime Mark Cuban says he wants to buy MLB Team X for example.

EDIT: I just did a quick search and found this link from Yahoo Sports:

http://sports.yahoo.com/mlb/news?slug=ycn-8338955

Many fans may remember that when the Red Sox went up for sale in 2002, Frank McCourt was one of initial bidders to buy the team. As a Boston real estate developer, McCourt wanted to buy the team and build a new stadium on the South Boston waterfront. However, the bidding soon climbed beyond McCourt's means, settling at $700 million when the team was sold to John Henry and his group. McCourt would settle for the Dodgers instead, buying the team for $430 million in 2004.

So yeah basically McCourt threw his name into the bidding but didn't have enough capital to be a serious candidate.

In the end I am glad he didnt buy them, because this awesome rivarly that has taken place over the past decade or so, wouldnt have.....sorry Samphin but thats your headache right now bro!!

I think LA will be fine though, yeah it sucks right now, but the Dodgers might be besides the Yanks, Sox, Cubs has got to be one of the more desireable franchises to own, more so than STL, or Philly IMO....for an investor with some capital and likes sports, in particulary baseball......

"finyank13 wrote:

In the end I am glad he didnt buy them, because this awesome rivarly that has taken place over the past decade or so, wouldnt have.....sorry Samphin but thats your headache right now bro!!

I think LA will be fine though, yeah it sucks right now, but the Dodgers might be besides the Yanks, Sox, Cubs has got to be one of the more desireable franchises to own, more so than STL, or Philly IMO....for an investor with some capital and likes sports, in particulary baseball......

Well certainly after owning a New York franchise, LA would probably be #2 on anyone's list due to the market they're in. It's sad that the Dodgers (and to a lesser extent the Mets) have become a laughing stock due to the owner being a complete fool but things are going to change and change fast especially since like you said the Dodgers are one of those teams anyone would want to own. Say what you want to about Selig but he's deadset on getting McCourt out of there and as quick as possible.

And yes I agree thank god McCourt didn't buy the Red Sox, who the heck knows where they'd be right now. I'm guessing they probably don't win a WS in 2004 or 2007 and probably don't come half as close as they have success wise either.

classic check-mate...your move sir:

The only thing that can save current Dodgers owner Frank McCourt is a high-dollar and stable new television contract — one that will bring financial security to a club buried in bankruptcy court.

Well aware of that fact and still craving an ownership change, Major League Baseball commissioner Bud Selig has made his most aggressive move yet, threatening to terminate the Dodgers from the league if McCourt does not sell the team. This according to Maury Brown, founder of The Biz of Baseball.

Selig would never actually go through with it. He’s not going to give the boot to a franchise with a cherished 128-year history and further alienate an already frustrated fanbase. But the threat of termination alone is sure to scare away any potential investors who might have helped McCourt climb his way back to respectability. And that includes television networks.

McCourt is planning a response, the language of which could turn ugly now that the 58-year-old divorcee has been backed into a corner. But what’s been apparent all along is now even more indubitable: McCourt is cooked. Fried. Roasted. Because the club he’s owned since 2004 is nothing without the league it’s part of, and landing a television deal is going to be near impossible for a team labeled — even falsely — as doomed.

Fox joins the fun and puts the squeeze on....this cant end soon enough.

http://latimesblogs.latimes.com/dodgers/2011/09/fox-sues-dodgers-trying-to-halt-tv-rights-sale.html

Fox Sports filed suit against the Dodgers in U.S. Bankruptcy Court late Tuesday, alleging the team has breached its current television contract in pursuit of a new one. … The suit asks that the court reject any such sale except in accordance with the current contract, under which Fox retains exclusive negotiating rights through November 2012 as well as the right to match any other offer. The auction process proposed by McCourt and his attorneys would not honor those rights.

Frank McCourt’s multi-front war to maintain control over the Los Angeles Dodgers just got a bit simpler: according to Bill Shaikin of the Los Angeles Times, Frank and Jamie McCourt have reached a settlement regarding ownership of the Dodgers. The deal has Frank paying Jamie $130 million in exchange for her giving up a claim to ownership of the team. Where Frank gets $130 million is an open question, but one has to think that Jamie was worried about the future. A future in which, due to how encumbered the Dodgers are, her half-ownership stake in the team could be worth very little, thus rendering $130 million a more palatable option.

Great, now just sell the franchise and leave!!!