On July 20, 2011, in a Delaware bankruptcy court, current Los Angeles Dodgers owner Frank McCourt and Major League Baseball legal representatives will present competing plans for interim financing for the club.
McCourt’s savvy business move means that even if Selig seizes the heritage baseball franchise from the Frankenstein monster he himself created, the league - and next owner of the team - could wind up with McCourt as its landlord.
That factual backdrop explains why in the past 48 hours multiple sources have confirmed to me that MLB has reached out to AEG to inquire about the possibility of the company assisting the league - and the next permanent owner of the team - in building a downtown ballpark for the Dodgers. Read more…
On Nov. 28, 2008, Los Angeles Dodgers team owner Frank McCourt and team president Jamie McCourt announced a partnership between the ‘Dodgers Dream Foundation’ and the local Friedman Charitable Foundation to build 42 baseball diamonds around the city.
As part of the charitable venture, the McCourts noted that Bruce Friedman, Chair of the Friedman Charitable Foundation, had pledged $5 million to the construction project.
At the time of the charitable initiative, the Dodgers were in the midst of a contract negotiation with Manny Ramirez. A negotiation which prompted Jamie McCourt to observe that day to Dylan Hernandez of the LOS ANGELES TIMES:
The Dodgers recently made a two-year, $45-million offer to slugger Manny Ramirez that they later withdrew, and the McCourts seemed to be hedging against lavish spending during a time of such great economic uncertainty.
Jamie McCourt said the fact that the majority of contracts were guaranteed was a significant issue.
“I think, oddly enough, maybe if things weren’t guaranteed, then we could pay for it,” she said. “If people can’t play anymore, it’s like, ‘Oh well, see ya.’ Different story. Whatever money they are guaranteed could be money that we could otherwise have given to community.”
The cost of the project to build youth fields is unknown, but the Friedman Foundation has committed to donating as much as $5 million, matching every dollar spent on the endeavor by the Dodgers Dream Foundation up to that amount.
Frank McCourt said that while he and his wife contribute money out of their own pockets to the Dodgers’ charitable causes, the team and its foundation are separate entities and the funds to pay for the fields won’t be taken out of the team’s operating budget. But he too said the Dodgers had to re-examine their priorities.
“To me, it’s more, how do we prioritize?” he said. “Where should we be investing?”
Thanks to documents from the subsequent McCourt divorce proceeding, we now know their priorities: $167,050,000 borrowed against the Dodgers and spent on real estate for the McCourt’s personal and private use since taking over the team in 2004.
On March 4, 2009, the Dodgers signed Ramirez to a two-year, $45 million deal.
On March 4, 2009, the United States Securities and Exchange Commission filed a civil lawsuit in United States District Court against “Dodgers Dream Foundation” benefactor Bruce Friedman for stealing $228 million from 1,500 investors in a massive Ponzi scheme. (Of that $228 million, it was later learned that Friedman used $57 million in fraudulently obtained investor funds for his personal and private use since 2004.)
One year earlier, on March 29, 2008, the McCourts bestowed on Friedman one of the highest honors the franchise could provide. From the L.A. TIMES on June 20, 2010:
Friedman also gave generously to charities — nearly $5 million, by Gill’s reckoning. One of his favored charities was the Dodgers Dream Foundation, which the baseball team founded to benefit underprivileged youth.
On March 26, 2008, according to credit card records obtained by the SEC and FBI, Friedman donated $25,000 to the McCourts’ other Dodger charity, “Thinkcure.”
Might that donation have had something to do with Friedman’s on-field appearance at the Coliseum 72 hours later?
Less than a year after that first pitch opportunity, and just four months removed from his $5 million pledge to the McCourts’ Dodgers Dream Foundation, Friedman had fled to Belize and then eventually France, where he was arrested by French authorities. Friedman is now in the process of being extradited to a U.S. federal lockup, where he will await trial after being subsequently criminally charged in a 23-count federal indictment that includes multiple felonies.
So what became of the McCourts’ promise to build 42 baseball fields to benefit the local community? Without Friedman’s millions in stolen Ponzi cash, 2 1/2 years later, two such diamonds have quietly been built. And though they didn’t get their hands on the $5 million Friedman had promised, according to Friedman’s credit card records, on Dec. 20, 2007, he illegally transferred $110,000 in “investor” funds to the Dodgers for game tickets. Read more…
As Los Angeles Dodgers fans celebrate the demise of Frank McCourt’s appalling stewardship of the Dodgers the past seven years, somehow Bud Selig has emerged in the media as a heroic figure swooping in to save the day.
(Dr. Selig: No Choice Now But To Slay His Very Own L.A. Creation)
Nothing could be further from the truth.
It was Selig who, in January 2004, ignored a nearly all-cash $430 million offer for the Dodgers by local L.A. billionaire business magnate Eli Broad after MLB owners initially refused to ratify McCourt’s purchase of the Dodgers from News Corp. at the same price.
On Jan. 28, 2004, longtime LOS ANGELES TIMES baseball writer Ross Newhan noted the following as part of the newspaper’s timeline chronicling McCourt’s pursuit of the Dodgers:
The day after that vote was called off, Newhan reported on Jan. 10, 2004:
Selig seldom calls for a vote unless he knows the outcome and it would be a surprise if a conference call produced a rejection, although there has been some speculation that the commissioner — intent on satisfying News Corp.’s determination to sell the team after a protracted process in which negotiations with two other bidders, Dave Checketts and Malcolm Glazer, ultimately broke down — would usher it through the full course and then let the owners decide if there were reason to be concerned about the financing.
McCourt was not included on Forbes’ most recent list of the 400 richest Americans (requiring a net worth of $600 million) and was a distant loser in bidding for the Boston Red Sox, but he owns valuable waterfront property in Boston that he reportedly is using as collateral in financing the acquisition.
11 days after Selig determined that he did not have the necessary MLB owner votes needed to ratify McCourt’s bid for the Dodgers, Newhan reported in the L.A. Times on Jan 20, 2004:
[Los Angeles developer and billionaire philanthropist Eli] Broad, whose net worth has been estimated at $3.8 billion, notified News Corp. (Dodgers Owners) Chairman Peter Chernin by letter last Wednesday that he was willing to offer the same $430 million if McCourt’s deal fell through.
His involvement, coming at the urging of Mayor James K. Hahn and former Dodger owner Peter O’Malley, among others, seemed to amplify concern in and out of baseball about McCourt’s ability to operate the Dodgers at an acceptable level and about the fact that he is proposing to invest little or none of his own money, with News Corp. loaning him almost half the $430 million.
McCourt needs three-fourths approval of the 30 owners, but the ownership committee has yet to recommend approval or rejection, and Commissioner Bud Selig has yet to schedule a conference call during which owners would vote on the sale.
.. Whether Selig is determined to have McCourt approved as a favor to News Corp. because of its national and regional TV contracts with baseball or whether he would let owners reject the sale, feeling that he could tell News Corp. that he had done everything he could, isn’t clear.
If Selig’s intentions weren’t clear at that point, perhaps they should’ve been.
On Oct. 12, 2003, four months before MLB owners balked at approving McCourt’s stewardship of the Dodgers, ESPN.com reported of Selig’s stance on McCourt’s future ownership of the storied Los Angeles franchise:
A day after News Corp. reached an agreement in principle to sell the Dodgers to Boston real estate magnate Frank McCourt for $430 million, MLB commissioner Bud Selig expressed confidence the deal would be completed despite questions about whether McCourt had sufficient financial backing.
McCourt’s financing remains unclear, baseball officials said, and his partnership has not been completed. A report from Boston indicated that McCourt might sell or find development partners for his properties there to help pay for the Dodgers.
Thanks to a report less than a month ago by FORBES magazine, we now know the financing McCourt used to somehow satisfy News Corp’s $430 million asking price - and the approval of Selig and at least 75% of MLB owners. Read more…
In an opinion piece titled, “One of baseball’s enduring myths,” published by THE SPORTING NEWS on May 14, 1994, then-acting Major League Baseball Commissioner Bud Selig wrote of the powers of his office as set out by the ubiquitous “best interests of baseball” clause:
The all-power commissioner’ never was an accurate portrayal
The truth is, the Major League Baseball commissioner by definition has never been all-supreme or omnipotent except where public confidence and integrity are concerned. The notion of an almighty commissioner directing the business of baseball is incorrect.
For Dodger fans wondering why Selig hasn’t stepped in to try to clean up the mess that their storied franchise has assuredly become, that would be your answer.
Actually, that was your answer until Selig sent a letter to Texas Rangers ownership eight months ago. Read more…
More news of the recent and rather bizarre operation of the Dodgers continues to bleed out of a Los Angeles courtroom this week as Frank and Jamie McCourt wrangle over a divorce settlement.
(A World Series ring will do that)
Bill Shaikin and E. Scott Reckard of the LOS ANGELES TIMES report today that in a deposition for the couple’s legal divorce proceeding, Frank McCourt revealed that last year he solicited $25 million in cash from the founder of a company “best known for marketing the Proactiv acne treatment.”
McCourt said that in exchange for the money from Guthy-Renker founder Bill Guthy, McCourt offered the acne treatment marketing titan “a Championship Ring (when we win World Series).”
As part of the deal, if McCourt was unable to pay Guthy back the $25 million in five years, the loan would convert into a small ownership stake in the team (2.77%). The ownership stake would be based on a $900 million valuation of the team at the time of conversion - which McCourt admitted was a “very high” estimate.
McCourt said that Guthy turned down the offer, saying that Guthy said he preferred “less risky investments.”
When he bought the team with no money down in 2004, McCourt did a similar deal with three other investors. One has since been repaid and the other two loans have not yet matured.
The Times reports Jason Moskowitz, a Palos Verdes entrepreneur and chief executive of SkyBridge Private Air, was one of those three investors.
FanHouse has also learned that the Dodgers’ ownership includes two limited partners who provided loans to help the McCourts finalize their purchase of the club in 2004, according to people familiar with the matter. One of the limited partners is Franklin Weigold, a long-time executive with Analog Devices, Inc., a Norwood, Mass.-based maker of electronic equipment. Weigold lives part of the year in Los Angeles and was also part of the McCourts’ failed bid to purchase the Boston Red Sox in 2001.
So why did McCourt go to Guthy to obtain $25 million in cash in 2009 in the first place?
The Times reports the move was in response to the shaky financial state of the Dodgers: Read more…
The haggle for ownership of the Dodgers between Frank and Jamie McCourt began today during their divorce proceeding in a Los Angeles courtroom.
(Funny, had her pegged for Secretary of Grate)
At issue is a document signed by the couple in 2004 that Frank claims gave him full ownership control of the Dodgers and Jamie ownership of the couple’s homes. Meanwhile Jamie claims that she never signed anything that would allow Frank to cut her out of an ownership interest in the team.
The next week a judge will hear arguments from both sides on the subject as Frank’s lawyers claim Jamie knew what she was signing while Jamie’s attorneys claim Frank actually switched out a page in the document to screw her out of the team.
Much more interesting though are some of the bizarro details of the lifestyle and largesse enjoyed by the couple -at the direct expense of Dodger fans. Read more…
TMZ.com reports today the latest divorce sordids between Dodgers Owner Frank McCourt and estranged wife Jamie.
Fired Los Angeles Dodgers CEO Jamie McCourt claims Frank McCourt and his lawyer, Lawrence Silverstein, fraudulently altered documents in an effort to strip her of the ownership of the team.
Frank claims in 2004, when they bought the Dodgers, Jamie signed over complete ownership of the team to him. In their bitter divorce case, Frank has submitted an agreement signed by Jamie, which includes an “Exhibit” that gives him complete ownership of the Dodgers.
But in new legal papers filed today by Dennis Wasser, Jamie’s lawyer … Wasser claims there was another “Exhibit” that was the final word on ownership of the Dodgers, which preserved Jamie’s rights to the team.
Wasser now says, after the document was signed, Frank and his lawyer pulled a switcheroo, by substituting the old “Exhibit” for the new one — thereby cutting Jamie out.Read more…
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?
In an interview with Jon Weisman of ESPN’s Dodger ThoughtsMolly Knight, who recently published a lengthy piece in ESPN The Magazine about the McCourts divorce, reported why the Dodgers allegedly hired Ned Colletti as GM and how Jeff Kent landed a “shocking” two-year contract extension with the Dodgers in 2006 worth over $22 million at age 38.
(”You want me to teach women to play baseball? That’ll be $22 million”)
Weisman: “What was her (Jamie McCourt) biggest impact on the organization?”
Knight: “I still have no idea. Oh, maybe the hiring of Ned Colletti. I’ve heard stories that she became close friends with Jeff Kent after he volunteered to help domestic violence victims as part of her WIN Initiative.
“Both she and Frank respected Kent’s willingness to serve the community. Jeff mentioned Ned Colletti to Jamie because he knew they were looking for a GM. Jamie suggested it to Frank.
“Ned killed in his interview because he didn’t ask how much money he’d have to play with. A few former execs told me all this, so take it with a grain of salt. But it starts to make sense that Kent was responsible for Colletti when you see the contract extension he was rewarded with after Colletti got there.”
So because Kent showed up for Jamie McCourt’s community projects, he was able to get Colletti’s foot in the door. The same Colletti who later handed the 38-year-old Kent an outrageous, two-year, $22 million contract.