While the McCourt divorce may seem mind-numbingly complicated as it pertains to the future of the Dodgers, it really isn’t. To understand why, you must go back to how the McCourts were somehow allowed to *buy* the team in the first place.
In 2004, the Dodgers were sold to the McCourts. Excerpt from the press release:
McCourt said he invested in excess of $200 million cash into the $430 million purchase, the most ever paid for a Major League franchise.
Where did Frank McCourt get the $200 million “cash“? From a Bank of America loan.
The rest of the purchase price came from a loan from Fox, which owned the very team McCourt was buying.
Those loans were largely collateralized by future club revenue, parking lots owned by McCourt and - most importantly - the good faith and credit of Major League Baseball.
In other words, McCourt bought the Dodgers without a dime of his own money. (Not that he had any in his checking account anyway.)
So why would MLB foster such an insane arrangement?
Because it wanted to keep the payroll of the team in MLB’s second-largest market artificially low. With the Dodgers’ payroll currently hovering at around $85 million, less than half of what the Yankees pay their players, I’d say Bud Selig and hatchet man Jerry Reinsdorf succeeded rather infamously in that endeavor.
B & J most recently pulled off the same scam in tapping hyper-leveraged Tom Ricketts to take over the Chicago Cubs. Meanwhile Cubs bidder Mark Cuban, swimming in liquidity and ownership experience compared to Ricketts, never received serious consideration.
So what does all that have to do with the McCourt divorce and the Dodgers?
Bill Shaikin of the LOS ANGELES TIMES reports this week:
The Dodgers could be ordered sold if Frank and Jamie McCourt do not resolve their bickering over payments such as property taxes and attorney fees, the judge presiding over their divorce warned Wednesday.
With each of the McCourts claiming to be low on cash, and with bills piling up, Los Angeles Superior Court Commissioner Scott Gordon threatened to resolve both issues at once by putting the Dodgers on the block.
What’s the odds MLB would allow the judge to “put the Dodgers on the block,” which could mean that the club could actually be sold to … *gasp* … the highest bidder?!!
After witnessing how MLB essentially backstopped Frank McCourt’s nearly half-billion in loans to purchase the Dodgers, I think it’s safe to assume that MLB will not allow Mr. McCourt to lose ownership of the team regardless of the divorce proceedings.
With that in mind, I expect a MLB-facilitated settlement sooner than later. Though it will not come easy, as Jamie is a notorious publicity hound. She’s the one who is fueling the tabloid coverage and will do all she can to keep that going. Her motivation is just as much achieving pseudo-celebrity as ending up with most of the couple’s assets.
She knows deep down that she’ll never get the Dodgers, so the next few months are a pure publicity play. The price of shutting that down for Frank and MLB is most likely everything he owns - except the Dodgers.
That actually will be a great deal for Frank unless Jamie is able to get her hooks into the insane revenue that will begin pouring into the franchise in 2013 - when the club’s television rights go up for bid. In ‘13 the Dodgers are expected to start a club-owned network similar to what Yankees have with their “YES” network.
How the revenue from that 2013 television arrangement is split up will dictate the Dodgers’ payroll for years to come.