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Over ten bids were submitted by prospective ownership groups for the Los Angeles Dodgers, and the investment firm handling the sale for Frank McCourt, The Blackstone Group, has winnowed the field down to at least eight. Mark Cuban, owner of the Dallas Mavericks, was not one of the bids that will advance to the final round. From the Los Angeles Times:
Mark Cuban was eliminated from the Dodgers' ownership sweepstakes Friday, along with baseball executive and former agent Dennis Gilbert, according to two people familiar with the process but not authorized to discuss it.
In addition, ESPN Los Angeles is reporting that the group headed by Steve Garvey and Orel Hershisher did not make the final cut. Bidding is reportedly expected to be at least $1.2 billion, with some estimates putting the eventual price just south of $2 billion.
The three groups led by Magic Johnson, Joe Torre, and former Dodgers owner Peter O'Malley are all still in the running, according to ESPN LA.
In the ongoing sale of the Los Angeles Dodgers, Monday brought a soft deadline for interested parties to submit opening bids. It was a soft deadline instead of a hard deadline because the deadline can be waived should other suitors emerge, but a number of bids rolled in anyway. How many bids? According to Bill Shaikin, "more than ten." That's actually according to Bill Shaikin's source, and not according to Bill Shaikin himself. Important distinction, kind of.
Mark Cuban submitted a bid. Steven Cohen submitted a bid. Peter O'Malley submitted a bid. The group including Magic Johnson and Stan Kasten submitted a bid. The group including Joe Torre and Rick Caruso submitted a bid. The group including Stanley Gold submitted a bid. The group including Dennis Gilbert, Jason Reese and Randy Wooster submitted a bid. And so on. Bids were submitted. Lots of 'em.
What happens now? More bids might come in. Some of the bidding parties might choose to consolidate. The bids will be evaluated by the bankers in charge of this process, and some of the parties will continue along while some of the parties might be eliminated.
When it's all said and done, Frank McCourt's looking for the Dodgers to fetch at least $1.5 billion. Good money, if you can get it.
In the sale of the Los Angeles Dodgers, Monday - today, this Monday right now - is a deadline. It's a "soft" deadline, but it's a deadline nonetheless. It's a deadline for prospective buyers to submit their opening bids. According to Tim Brown, the first bids started arriving at Blackstone Advisory Partners over the weekend. Things are heating up.
How are things heating up? What does any of this actually mean? That's where Bill Shaikin comes in. In this article from the Los Angeles Times, Shaikin answers a handful of key questions about the process. For example, what is a soft deadline?
What happens Monday?
Opening bids are due. The deadline is a soft one, meaning a well-capitalized prospective buyer would not necessarily be rejected for submitting a bid after Monday. Blackstone Advisory Partners, the investment bank handling the sale for McCourt, is prepared to receive about 20 bids.
So Monday is a deadline in that it is not really a deadline.* Got it.
* it's more of a woundedline. haha!
What happens next, once the bids are in?
What happens from there?
The bids are not binding. However, in addition to a proposed purchase price, the bid should outline how the ownership group would be structured and how the purchase price would be financed. Blackstone will use all that information to decide which bidders will continue in the process.
In all, Shaikin addresses ten questions, and he addresses them in plain, understandable English, making this an easier article to read about the Dodgers sale than most. It's worth a few minutes of your day, if this is an area of personal interest. If it's not, you should probably do something else.
Pretty soon (if not soon enough) we'll likely have heard the last of Frank and Jamie McCourt. But first there are a few hundred million dollars to be gotten.
News Corp.’s Fox has joined the auction process for the LA Dodgers by signing a nondisclosure agreement, the Wall Street Journal, which is also part of the entertainment conglomerate, reported.
The company, however, does not want to fully own the baseball franchise, like it did from 1998 to 2004, but is eyeing a minority stake to boost its chances of keeping the valuable Dodgers TV rights, according to the Journal..
It cited sources familiar with the company’s thinking as saying it is interested in a 15 percent-20 percent stake.
There are several groups and individuals interested in buying the team, but it doesn’t seem likely that the other groups would want to share ownership with another group holding a significant minority interest.
Oh, and about those TV rights:
Time Warner Cable is also expected to look to win the Dodgers TV rights to add content to two regional sports networks that it said it would launch after signing a long-term deal with the NBA’s Los Angeles Lakers.
One day, events surrounding the Dodgers will settle down. It doesn’t appear that day will be coming any time soon, though.
At long last, it appears that the sale of the Los Angeles Dodgers will proceed and meet a previously established deadline of April 30.
The Los Angeles Times reports that a dispute between outgoing Dodgers owner Frank McCourt and Fox, owner of the team’s TV rights, has been settled:
The Dodgers had said they could command a higher sale price by marketing their television rights now. Fox had asked for the enforcement of its current contract, which forbids the team from negotiating with other broadcast outlets before Nov. 30. U.S. Bankruptcy Judge Kevin Gross ruled in favor of the Dodgers, but Fox appealed and Stark put the sale on hold.
The Dodgers agreed Tuesday to honor the existing Fox contract, which expires after the 2013 season. That leaves a new owner free to launch his own Dodgers cable channel starting in 2014, or leverage that threat into a bidding war between Fox and Time Warner Cable.
This would seem to put the Dodgers sale on the fast track; as many as six groups have been linked to possible interest in buying the team. There is one thing that hasn’t been settled:
Fox did not, however, release McCourt from his obligation to repay a $30 million personal loan provided by the company in April so that he could meet the first payrolls of the season.
The article doesn’t indicate a deadline for repaying that loan.
And it is still amusing that the name of the bankruptcy judge in the Dodgers case is Kevin Gross; that’s the same name as this former pitcher who pitched for the Dodgers for a few years in the early 1990s.
It's pretty early to analyze seriously what a Joe Torre ownership group would mean for the Dodgers -- there are other, high-powered groups vying for the team, after all -- but it's not too early to start speculating, which is exactly what Mike Scioscia's Tragic Illness does:
Obviously this is far, far away, but it’s interesting to try to imagine what Torre might do if he returned to the team with some sort of executive power, similar to Nolan Ryan in Texas. You’d have to think he’d fight hard to retain Don Mattingly, as Shaikin also suggests, but what do we really know about his relationship with Ned Colletti?
And as Bill Shaikin notes:
If you're Don Mattingly, you're rooting hard for Joe Torre's group to buy the #Dodgers. Best chance to keep your job.
I can personally guarantee that if the Dodgers were to forge ahead with Colletti and Mattingly, it would be an exciting development. For Giants fans. But, again, it's still too early to get too deep with this.
Joe Torre told Major League Baseball before the holidays that he was going to resign from his post to pursue a position with a group looking to purchase the Dodgers, and in the meantime, MLB will use a closer-by-committee approach to replacing him, in which "closer" is defined as "discipline czar." From Jerry Crasnick:
Joe Garagiola Jr., Kim Ng and Peter Woodfork will do Torre's job in the interim while MLB looks for a replacement.
And as far as a permanent replacement goes, Jon Heyman throws Andy MacPhail as a possible replacement, probably because of his experience meting out punishment to the greater Baltimore area.
Torre is joining forces with Los Angeles real-estate developer Rick Caruso, according to Bill Shaikin of the Los Angeles Times:
"The Dodgers are an iconic franchise, and I am thrilled to partner with Joe Torre, one of baseball's all-time greats, to launch a bid for this storied organization," Caruso said in a statement. "Joe has a proven track record of fielding winning teams and I am looking forward to our group benefiting from his unique experience.
Torre joins a group that faces serious competition in their pursuit of the Dodgers. Both Magic Johnson and Steve Garvey are part of separate groups also making a similar bid.
The Los Angeles Dodgers filed for bankruptcy protection in June, and in September asked the court to auction off their media rights as part of a strategy to become solvent again. Fox Sports Net asked a federal judge to dismiss the case, saying that the team was perfectly capable of fulfilling its obligations, but using bankruptcy laws to avoid doing so.
On Thursday, the judge ruled that the Dodgers can sell their rights in an auction, which is seen as a huge win for Frank McCourt and the Dodgers, as the rights will make the team more attractive to potential buyers. From the Los Angeles Times:
Gross issued his ruling at the end of a two-day hearing. He said he believed the accelerated sale of television rights was in the best interest of the Dodgers and their creditors. The creditors' committee supported the Dodgers in the hearing.
The Dodgers had a contract with Fox Sports that would have prevented the team from auctioning off the rights until November 30, 2012, according to the Times. The accelerated timetable will likely increase the attractiveness of the franchise to potential buyers, as McCourt has agreed to sell the team by April 30, 2012. Fox has until January 14, 2012 to negotiate a new contract with the Dodgers, after which the team can accept bids from other organizations.
Fox Sports Net is planning to challenge the ruling and request a 14-day stay.
Just in time to strike quickly and replace James Loney with Albert Pujols! Now where did that number for Dan Lozano go ...
The Los Angeles Dodgers are just about officially up for sale, and one of the groups interested in buying them includes the locally beloved Magic Johnson.
The Dodgers are finally getting out from under the ruinous thumb of Frank McCourt, but is it too late for them to make a big free-agent splash with their new owner?
Mark Cuban, the owner of the NBA champion Dallas Mavericks, said he offered to buy the Dodgers several months ago but declined to enter negotiations when owner Frank McCourt said the price would be in the range of $1 billion to $1.2 billion.
“At that price, I wasn’t interested,” Cuban said Tuesday.
According to this tweet from Fox Sports’ Ken Rosenthal, Cuban spoke of possible interest in the Dodgers now that they’re officially on the market:
Mark Cuban on his level of interest in the #Dodgers: “At more than $1 billion none; under $1 billion, interested.” #MLB
Since, according to the announcement of the sale Tuesday night, the Dodgers are going to be sold in a “court supervised process”, the price could be driven up — or down — by various factors including the number of bidders.
Cuban has been linked to interest in a number of baseball teams in recent years, including the Cubs and Pirates. It’s been rumored that other baseball owners would vote to deny him ownership of a MLB team, but it’s possible that they want to get rid of Frank McCourt so much that they might approve Cuban.
Frank McCourt has finally decided to sell the Los Angeles Dodgers, announcing the decision in a joint statement with Major League Baseball late Tuesday night:
"The Los Angeles Dodgers and Major League Baseball announced that they have agreed today to a court supervised process to sell the team and its attendant media rights in a manner designed to realize maximum value for the Dodgers and their owner, Frank McCourt. The Blackstone Group LP will manage the sale process."
MLB took control of the franchise's business and day-to-day operations last spring, citing "deep concerns for the finances and operations." The team officially filed for bankruptcy in June, and in court filings filed last month MLB accused McCourt of "looting" nearly $200 million from the team's finances.
Despite it all, McCourt was reluctant to officially put the team on the block, even though it's long seemed inevitable to outside observers that the franchise would eventually change hands for a third time since 1998. McCourt purchased the team from Rupert Murdoch's NewsCorp in 2004 for $430 million. The franchise, which includes the stadium and the surrounding land, could fetch a billion dollars or more on the open market.
McCourt received a $1.2 billion offer from a group that included Chinese investors earlier this year, according to the Los Angeles Times, but MLB was skeptical about the genuineness of that offer. More recently, Mark Cuban, owner of the NBA's Dallas Mavericks, told the Times that he inquired with McCourt about buying the team but lost interest after learning of McCourt's 10-figure asking price.
"I don't think the Dodgers franchise is worth twice what the Rangers are worth," Cuban told the paper. Cuban bid for the Rangers last year, ultimately missing out when the team sold for $593 million to a group led by Nolan Ryan.
Bill Shaikin reports that embattled owner Frank McCourt might be very close to finally selling the Los Angeles Dodgers. Except he hasn't decided yet to sell the Dodgers. So, the world awaits.
Major League Baseball wrested financial control of the Los Angeles Dodgers away from Frank McCourt in part because they felt that he was not making financial decisions that were in the best interests of the Dodgers. In court filings on Monday, MLB itemized some of the more egregious financial shufflings of the McCourt era. From the Los Angeles Times:
In the filing, the league claimed McCourt funneled $73 million in parking revenue through Blue Land Co., a non-team related entity; used $61.16 million in team revenue to pay off personal debts; and took $55 million from team revenue for personal distributions.
I'm sure it makes Dodger fans happy to know that every dollar they've spent in tickets, food, and Manny wigs at Dodger Stadium all went to McCourt for his chinchilla remote cozies, which is why MLB claims that he "has completely alienated the Dodgers' fan base."
McCourt and the Dodgers volleyed charges back at MLB, saying ...
The Dodgers claim Selig approved the business structures about which he now complains, including the Blue Land mechanism by which the Dodgers pay $14 million in annual rent to play in their own stadium.
And if the story couldn't get any unseemlier, both sides are invoking the name of Bryan Stow, the Giants fan who was critically injured after a beating in the parking lot of Dodgers Stadium, to make key points about the other side.
It's a lot to digest, but the most important thing to take away from the article is probably that the name of the U.S. bankruptcy judge is Kevin Gross, who is presiding over the case despite having spent four years with the Dodgers.
It doesn’t seem possible, but a Los Angeles Times report indicates that we could be nearing the end of the McCourt saga with the Los Angeles Dodgers. The report says that Jamie and Frank McCourt have reached a divorce settlement in which Jamie will get $130 million and give up any claim to a share of Dodgers ownership.
The settlement would remove Jamie McCourt as an obstacle to Frank McCourt’s plan to retain ownership of the team by selling the Dodgers’ television rights in U.S. Bankruptcy Court. The agreement also would appear to set up a winner-take-all court showdown for the Dodgers between Frank McCourt and Commissioner Bud Selig.
The people familiar with the agreement spoke on condition of anonymity because the settlement has not been finalized. However, such a settlement would conclude what is believed to be the costliest divorce in California history.
The rest of the Times article details the history of the McCourt divorce, including the “lavish lifestyle” lived by both Frank and Jamie McCourt, “ultimately financed by Dodgers fans”:
She wrote of combined salaries of $7 million per year, plus $46 million to buy side-by-side oceanfront estates in Malibu, $27 million to buy side-by-side homes near the Playboy Mansion, additional properties in Massachusetts, Montana, Colorado, Wyoming and Mexico, $400 dinners and $1,000 per-night hotels, private jet travel around the world, even house calls from hairdressers and makeup artists.
It would seem that everyone connected with baseball will be better off when this is all finally settled.
The embattled Los Angeles Dodgers organization has described its financial situation for the rest of the 2011 season to a bankruptcy court, the New York Times reports. The document lists the team's payroll and revenue-sharing obligations through the end of September.
The reason this document has been released now is it shows how the Dodgers will spend a $150 million loan from Highbridge Capital Management, of which the Dodgers have already accepted $60 million. The loan will be discussed at a court date on July 22, along with a competing proposal for short-term financing from Major League Baseball that the Dodgers don't want to accept because they fear it will give Bud Selig too much leverage against the team.
Meanwhile, during a press conference on Tuesday, Selig implied that the Dodgers would soon be under new ownership.
In answering a question about how the Dodgers' bankruptcy might be bad for baseball, Selig recalled hearing last year how terrible the Texas Rangers' bankruptcy would be for baseball. The Rangers were sold in a bankruptcy court auction.
"It didn't turn out terrible," Selig said. "They wound up getting a great price and a wonderful ownership group. We will work our way through all these things. Life doesn't always work out exactly the way you want."
It appears that Selig will not settle the case with the Dodgers if Frank McCourt maintains ownership of the team.
For more on the Dodgers, check out True Blue LA.
A judge has ruled that a hearing in the Los Angeles Dodgers' bankruptcy process will not require the presence of Bud Selig, and that Major League Baseball will not need to turn over an array of documents to the Dodgers, the Los Angeles Times reports.
"This is clearly, in my mind, not an appropriate occasion to turn this hearing into a trial on the commissioner," U.S. Bankruptcy Judge Kevin Gross said.
Gross' decisions (he denied the Dodgers' motion to have MLB turn over documents from 31 categories, deeming them "not relevant") are, in sum, a win for MLB, which may have gotten slightly closer to wresting control of the insolvent Dodgers from owner Frank McCourt, whose financial woes have led to this declaration of bankruptcy. The hearing, on July 20, will determine whether McCourt can pursue his own external bankruptcy financing or will be forced to accept MLB's offer of a loan.
The New York Times reports that Major League Baseball is opposing a motion by the Los Angeles Dodgers that would require the league to turn over evidence that the Dodgers think will help them in bankruptcy court.
To further his case against Selig and baseball, McCourt demanded a lengthy list of documents and other evidence that would show, in part, that M.L.B. has been unnecessarily punitive in its handling of the Dodgers’ financial crisis, compared with the "velvet glove" treatment of other teams with money problems.
"This is not the time for Mr. McCourt to try to build a case to challenge M.L.B.’s administration of baseball," the opposition brief said.
The Dodgers claim these documents demonstrate "the commissioner's real agenda" with regard to the team (essentially, to treat the organization differently from other teams that it argues have had similar situations), while the MLB contends that the documents are irrelevant to the Dodgers' bankruptcy and financing of the team, which is what's really at issue.
MLB's opposition to the motion was the latest move in the wrangling between the embattled Dodgers organization and Major League Baseball. Dodgers owner Frank McCourt has accused the commissioner's office of preventing the team from getting the money it needs (by vetoing a huge new television deal that commissioner Bud Selig felt would give McCourt money he didn't deserve). Meanwhile, McCourt has "treated the team like a personal bank," contributing to its mountain of debt. Major League Baseball argues that the documents to which McCourt is seeking access merely show how badly McCourt has run the team.
The Los Angeles Dodgers aren't going quietly with their bankruptcy issue. In the past, owner Frank McCourt blamed MLB commissioner Bud Selig for the issue and now he'll take to the courts to prove it.
Selig is set to be deposed in two weeks by lawyers representing Dodgers owner Frank McCourt, according to a bankruptcy court filing late Thursday via a report in the Los Angeles Times. According to the deposition, Selig would be required in court on July 15.
While in court, McCourt's lawyers are looking for Selig to answer two important questions according to the Times: How the MLB approved the Dodgers' interlocking entities and rent payments to which the league now objects as well as how the MLB devised and implemented what McCourt has said is an MLB investigation with a "predetermined" outcome of ousting him from ownership.
Along with Selig, there are six other current or former baseball executives being summoned for depositions. This could get even uglier than it already is.
The Los Angeles Dodgers' bankruptcy filing, a move designed to alleviate some of the financial pressures on Dodgers owner Frank McCourt, has another major foe: Major League Baseball. In papers filed to a Delaware bankruptcy court on Tuesday, MLB is objecting to the Dodgers' bankruptcy filing, citing concerns about the Dodgers leveraging future assets to pay for current debts.
Commissioner Bud Selig claims in the filing that his office can provide a loan on better terms, and argues that the court should reject McCourt's financing proposal because it compels the team to sell valuable future broadcast rights to meet current expenses and to provide money for McCourt's personal use.
Broadcasting rights have become one of the most lucrative assets a professional sports team can claim, especially in the Los Angeles area. The Los Angeles Lakers' television rights deal with Time Warner Cable reportedly could rake in up to $3 billion, and the New York Yankees and Boston Red Sox have been able to maintain their massive payrolls in part because of substantial revenue from regional sports networks.
Yesterday, Frank McCourt secured a loan of $150 million to help the Los Angeles Dodgers make payroll and pay all of their expenses. Reportedly, the loan is a pretty terrible one. It includes a $4.5 million nuisance fee and 10 percent interest, which is pretty insane for an organization who, despite their current bankruptcy proceedings, has close to 10 figures in assets. Major League Baseball, understandably, disagrees with McCourt's financing plan and is expected to offer an alternative financing solution.
Because the Dodgers have filed for Chapter 11 bankruptcy protection and they are going through (possibly long) bankruptcy proceedings, that loan has to be approved by a judge. This is where MLB steps in with an alternative option that the judge could force McCourt to take instead of the loan he found for himself. Speculation is that their offer might include a provision that the team be sold to the highest bidder, which a bankruptcy judge might find exceptionally appealing, even if McCourt doesn't.
That offer is purely speculation, though, as there are currently no details out on a potential MLB offer. If McCourt gets his way and secures the loan he got for himself, these bankruptcy proceedings could take a long time.
Can an entire lineup be constructed out of the Dodgers poor financial decisions?
The Los Angeles Dodgers have filed for Chapter 11 bankruptcy protection in the state of Delaware, and according to Dodgers owner Frank McCourt, it's all the fault of Major League Baseball and MLB Commissioner Bud Selig. The league assumed day-to-day control of the Dodgers in April because of the team's financial difficulties, but that didn't stop McCourt from trying to secure a new television deal for the team. The 17 year, $3 billion deal that would have included $385 million up front was vetoed by the league, and McCourt claims that losing that deal is what forced the team into bankruptcy. McCourt said, in a statement:
"We brought the commissioner a media rights deal that would have solved the cash flow challenge I presented to him a year ago...Yet he's turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today."
Major League Baseball had no immediate comment on the matter. The Dodgers' bankruptcy filing shows debts in the hundreds of millions, and they have reportedly secured $150 million in financing that will allow them to make payroll during the bankruptcy proceedings.
Via tweet from New York Times media columnist Richard Sandomir, we learn Monday morning that the Los Angeles Dodgers have filed for bankruptcy.
There isn’t much more information than that available yet today; obviously, more information will be available (and needed, to analyze the situation) as the day goes on. For now, here’s some instant analysis from Craig Calcaterra:
… for the time being, this could buy McCourt some time. Why? because a bankruptcy filing puts a halt on all legal action with respect to the bankruptcy estate (i.e. the Dodgers). McCourt will certainly argue that this will prevent a takeover from Major League Baseball, though the court may decide differently when it gets a chance to weigh in, likely in the next few days.
All of this is undoubtedly true, and I am no expert in these sorts of financial matters. What seems clear is that Frank McCourt has made an absolute mess of what was once one of the crown jewels of baseball franchises (the Dodgers may be headed for a last-place finish just two years after posting the best record in the NL; it would be their first such finish in 19 years), and commissioner Bud Selig isn’t happy about this.
McCourt’s going to try his mightiest to keep the Dodgers. Selig will likely try to take them and have them sold. Only their lawyers are likely to get rich in the end.
Bud Selig rejected a proposed deal between the Los Angeles Dodgers and FOX on Monday, which if it had gone through, could have kept Frank McCourt as the owner of the Dodgers. Every plan McCourt had made to keep the Dodgers hinged on the approval of this deal, so it was unlikely that he was just going to limp away. Now, via the Los Angeles Times, a statement from McCourt's attorney, Steve Susman:
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
Fight! Fight! Fight! Prior to that paragraph, Susman claimed ...
the Court ordered, among other things, that the FOX transaction is 'in the best interest of the Los Angeles Dodgers and should be consummated immediately;'
This is almost certainly going to be a legal skirmish that will extend for quite a while. McCourt's days as owner of the Dodgers are likely numbered, but it's probably still a pretty big number, maybe with a comma and everything.
Pursuant to my authority as Commissioner, I have informed Los Angeles Dodgers owner Frank McCourt today in a detailed letter that I cannot approve the club's proposed transaction with FOX. This decision was reached after a full and careful consideration of the terms of the proposed transaction and the club's current circumstances. 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.
"Mr. McCourt has been provided with an expansive analysis of my reasons for rejecting this proposed transaction. Critically, the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt. Given the magnitude of the transaction, such a diversion of assets would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans.
"As I have said before, we owe it to the legion of loyal Dodger fans to ensure that this club is being operated properly now and will be guided appropriately in the future. This transaction would not accomplish these goals.
Or, in ten words: "This deal was a short-term cash grab. No thanks."
When news broke that the Los Angeles Dodgers were having financial difficulties, Frank McCourt said that people shouldn't worry. He had a television deal in place with FOX that was going to fix everything.
When MLB seized financial control of the Dodgers after there were whispers that the team couldn't make their monthly payroll, McCourt said it wouldn't have been a issue if baseball would approve that pesky FOX deal.
McCourt just reached a settlement with his wife Jamie McCourt that had Frank buying her interest of the Dodgers out using the money from the FOX deal.
Small problem, though: there isn't going to be a FOX deal. Bud Selig and Major League Baseball moved to reject the proposed deal between the Dodgers and FOX, leaving McCourt without a lot of options. The decision makes it almost inevitable that the team will have to be sold. From Tim Brown of Yahoo!:
Selig words: It is my conclusion that this proposed transaction with FOX would not be in the best interests of the ... Dodgers franchise.
Though MLB hasn't given a reason for the decision, it's believed that the deal was below market, which a) would have set a bad precedent for the other 29 teams, and b) might have lowered the value of the franchise.
I picture Frank McCourt acting like Ray Liotta in "Goodfellas" after Lorraine Bracco flushed his nest egg down the toilet.
Los Angeles Dodgers owners Frank McCourt and Jamie McCourt have been embroiled in a messy divorce, and a key component of the separation is a dispute over who owns the team. On Friday, the two parties came to a settlement. From the Wall Street Journal:
After a 20-month battle, Mr. McCourt and his wife, Jamie, announced a deal Friday that allows Mr. McCourt essentially to buy out his wife's interest in the Dodgers for $100 million, pending the outcome of a one-day trial in August.
The one-day trial in August has been set up to determine if the Dodgers are community property between the two McCourts, or if the team is solely Frank's possession. If Frank McCourt is granted sole ownership, he will then buy out Jamie McCourt using the money from a TV deal with FOX that Major League Baseball has not approved yet. If the deal with FOX is void, so is this settlement. If Frank McCourt loses the trial in August, the team will likely be sold.
See? Crystal clear. So there's a chance, Dodger fans, that Frank McCourt might stick around after all. Rejoice!
As if the Los Angeles Dodgers didn’t have enough financial problems, ESPN Los Angeles reports that the Dodgers must pay Manny Ramirez $8.33 million by June 30, part of $25 million of deferred money the Dodgers owe him on the contract he signed before the 2009 season.
Only four current Dodgers — Andre Ethier, Hiroki Kuroda, Rafael Furcal and Ted Lilly — are making more than $8.33 million this season.
Where’s the money going to come from?
Dodgers owner Frank McCourt had to draw advances against the team’s corporate sponsorship deals to meet his June 1 payroll obligations. Last week, USA Today reported that McCourt had the funds to meet payroll on June 15. The Dodgers, through a spokesman, declined to comment on the money owed to Ramirez.
So the answer to the question posed above is… who knows? By the middle of next week, on June 22, MLB is supposed to have concluded an investigation into Dodgers finances. Also on that date, Frank McCourt is going to ask a judge to issue a ruling that would approve a multi-billion dollar extension of the team’s TV deal with Fox… and as noted in the previous update to this stream, Jamie McCourt is going to ask for a ruling ordering an immediate sale of the team.
So if you hear fireworks from the direction of Los Angeles a week from Wednesday, that’s why. And Manny Ramirez may still be waiting for his money.
Perhaps, at long last, by June 22 we will know the future of the Los Angeles Dodgers ownership mess.
The Los Angeles Times reports that the commissioner’s office hopes to conclude its investigation into Dodgers finances by that date.
And just why is June 22 a significant date?
June 22 is the date set for a Los Angeles Superior Court hearing in which Frank McCourt will ask for a ruling that his ex-wife has no standing to challenge a proposed long-term television contract with Fox, one that he says would restore the team to robust financial health. At the same hearing, Jamie McCourt will ask Superior Court Judge Scott Gordon to order the immediate sale of the team.
This may very well mean that Frank McCourt will run out of money before June 22; it’s possible that if that happens, according to the article, that MLB would use that as a justification to seize the franchise and order its sale (at least, according to the article, that is what those close to Frank McCourt fear).
McCourt continues to claim that if he were allowed to conclude a television deal with Fox, all would be settled. Given the pending court case and MLB’s current supervision over Dodger finances, that’s unlikely to happen.
The Los Angeles Dodgers were rumored to be having trouble making payroll for May, a problem that would affect everyone from Matt Kemp to the licensed nitrate dealer who peddles Dodger Dogs. For this month, though, they're all getting paid. From ESPN the Magazine's Molly Knight:
Los Angeles Dodgers owner Frank McCourt was able to meet the team's payroll Tuesday with cash advances drawn on the team's corporate sponsorship deals, according to three people familiar with the matter who were not authorized to speak publicly.
Knight suggests that the Dodgers could have made extra concessions with regards to luxury-box availability in exchange for the cash advances, as well as discounts on future sponsorship fees.
Financial control of the Dodgers was taken over by Bud Selig and Major League Baseball earlier this spring, though owner Frank McCourt maintains that if MLB will just approve a really-this-is-good-for-everyone $3 billion TV deal with Fox, all the Dodgers' financial problems will go away.
All of the hullabaloo over Dodgers seems to center around owner Frank McCourt. Can he make payroll? Is he going to sue Major League Baseball and Bud Selig? There's a minor detail that's often glossed over, though: there's a co-owner out there, and she wants the Dodgers to be sold immediately. From the Los Angeles Times:
Jamie McCourt asked a Los Angeles Superior Court judge to order the immediate sale of the Dodgers, in a filing submitted on Wednesday and made public on Thursday.
If the motion is granted by the judge overseeing the McCourt's divorce, the Dodgers could have a new owner by next season, which would avoid a Thunderdome-style legal confrontation with Bud Selig and MLB. From KTLA.com:
It's believed Jamie McCourt will argue that her ex-husband's actions have affected the value of the club and, as part owner, she has the power to have the team's value maximized.
McCourt is asking for a hearing date on the motion Thursday morning.
From Bill Shaikin, our go-to guy for all things McCourt/Selig, who’s on the ground in New York at the owners’ meetings … here’s Shaikin’s quick summary, along with a snippet of Bud Selig’s press conference:
Commissioner Bud Selig met with reporters Thursday in New York at the conclusion of baseball’s quarterly owners’ meeting. Selig met on Wednesday with Dodgers owner Frank McCourt, who said he had impressed upon Selig the urgency in approving the team’s proposed long-term television contract with Fox, which would provide the funding McCourt now lacks to meet the May 31 payroll.
“I just emphasized the importance of timing,” McCourt said.
Q: How do you respond to McCourt saying the outcome is “predetermined?”
A: Number one, the outcome is not predetermined. When I talked to Tom Schieffer and offered him the position, I just told him to go out there. He’s got a lot of baseball experience. He and I were in the business a long time together. I have great faith in his ability. Nothing has been predetermined. That’s why he is there, to monitor things [on a day-to-day basis]. And that is why Proskauer, our law firm, is doing a lot of other work [on the MLB investigation into the Dodgers’ finances]. We wouldn’t have to go through all this if it was predetermined. I’m doing it because I think it is the right thing to do. There are a lot of facts that develop. You can’t develop facts … without doing this. So it has not been predetermined. People can say whatever they want. I will anxiously await the reports from both parties, Proskauer and the monitor. Certainly, the reports will be very important.
Actually, Major League Baseball would have to go through all this even if the outcome were predetermined, because otherwise the outcome would be more difficult to defend in court, if things come to that. This is simply due diligence, and if there’s one thing Bud Selig believes in — at least when it comes to legal matters — it’s due diligence. They’re going to cross every T and dot every I before they seize a man’s property, because the man is potentially litigious. Highly litigious.
McCourt’s smart to worry about the timing of the “investigation,” because we’ve seen that MLB can delay investigations and studies and Blue Ribbon Committee findings for exactly as long as it’s convenient. So this investigation will be completed exactly when Selig’s ready for its completion, and not a nanosecond earlier.
With the fate of the Los Angeles Dodgers very much in question, Bill Shaikin reports that the club doesn’t have enough cash on hand to meet team payroll at the end of this month:
The cash shortage was confirmed Tuesday by two people familiar with the matter, speaking on condition of anonymity because of the possibility of McCourt filing suit against MLB.
McCourt received a $30-million loan from Fox last month, which provided funding for the Dodgers’ two April payrolls and is expected to carry them through the first May payroll. The second May payroll, due at month’s end, is the one that appears problematic at this time.
If the Dodgers can’t meet payroll, Major League Baseball will step in and 1) issue paychecks, and 2) perhaps seize, or attempt to seize, the franchise from embattled owner Frank McCourt.
Defiant, McCourt claims the Dodgers’ finances will be in perfectly fine shape if MLB will just approve a 20-year TV deal, worth $3 billion, that would immediately infuse $285 million into the franchise. MLB has shown little enthusiasm for such a transaction; officially, no decision will be made until “monitor” Tom Schieffer “completes his investigation into the team’s finances,” a process that will reportedly take a couple of weeks (which seems optimistic).
After Los Angeles Dodgers owner Frank McCourt held a conference call to proclaim that a) he was fiscally solvent and b) that Bud Selig and MLB had no right to respond by wresting control away from, Major League Baseball was quick to respond with a terse statement. From the official press release:
It is unfortunate that Mr. McCourt felt it necessary to publicize the content of a private meeting. It is even more unfortunate that Mr. McCourt's public recitation was not accurate. Most fundamental, Commissioner Selig did not 'veto' a proposed transaction. Rather, Mr. McCourt was clearly told that the Commissioner would make no decision on any transaction until after his investigation into the Club and its finances is complete so that he can properly evaluate all of the facts and circumstances.
"Equally important, there has been no seizure of the Los Angeles Dodgers. Mr. Scheiffer has been appointed as a monitor, and a multi-page written directive from the Commissioner describing his role has been provided to Mr. McCourt. In our meeting, no one from the Dodgers asked a single, specific question about the terms of the document setting forth the monitor's role.
"Finally, Mr. McCourt is well aware of the basis of Baseball's investigation and has been provided an eight-page document describing the issues of concern to Major League Baseball."
It's not quite the same as a five-word statement that reads "Frank McCourt is a liar", but it's as close as MLB is probably going to come. Between McCourt's recalcitrant conference call, and baseball's quick, unapologetic response, it's looking like there's a battle royale brewing. Get the popcorn ready.
Frank McCourt met with Major League Baseball officials Wednesday afternoon in New York, and afterward held a press conference.
McCourt essentially made two points.
First, he’s got a “fully drafted, fully negotiated [television] deal, ready to be signed,” which he presented to Major League Baseball. Commissioner Bud Selig, who was not present at the meeting, vetoed the deal.
According to McCourt, the deal would “immediately invest $300 million in equity” and "provides complete stability for the Los Angeles Dodgers for the next two decades."
When asked about the total value of the deal, which includes a renegotiation of the next three existing years, and adds another 14 years, McCourt replied, "It depends on how you calculate the different components, but I’ve seen a valuation in excess of [$3 billion].
Second, McCourt sounded defiant about MLB’s takeover. In his initial statement, he said, “In 2004, I took my life savings and invested it in the Los Angeles Dodgers. Nobody handed the Dodgers to me, and nobody’s taking them away.”
When asked if he would sue Major League Baseball, McCourt said, “I am very committed to my position. I’m not going anywhere. This is a team that I love, and a community that I love. I am going to protect my rights, obviously.”
Later, McCourt said, “It’s just un-American to me, to be sitting here having this conversation, the thought that your private property, it’s susceptible to being taken away from you because you’re going through a nasty divorce or whatever.”
And regarding Tom Schieffer, the Commissioner’s designated “trustee” of the Dodgers, McCourt said, “We don’t believe that Commissioner Selig has the right to send in a receiver to come in and take over the Dodgers.”
It sounds like there might be some uncomfortable moments in Chavez Ravine over the next few days.
Update: Following McCourt's press conference, MLB issued statement denying that TV deal has been vetoed, but that decision won't come until investigation of Dodgers' finances is completed.
Frank McCourt -- semi-partial-maybe owner of the Los Angeles Dodgers, depending on which press release or court transcript you read -- is going to meet with Major League Baseball in New York on Wednesday. According to Steve Dilbeck of the Los Angeles Times, what happens behind closed doors will go a long way towards figuring out whether or not McCourt will attempt to take legal action to regain control of the franchise. Quoth the Times:
McCourt wants to know exactly what Schieffer has been asked to do, and how Selig envisions the Dodgers will be run during Schieffer's tenure. In addition to discussing how the Fox deal -- a deal that has been sitting on Selig's desk for close to a month -- would stabilize the Dodgers financially, McCourt would like Selig to consider the plans of new Vice Chairman Steve Soboroff in improving the fan experience at Dodger Stadium and in revitalizing the team's bonds within the community.
To recap how things have gone: McCourt had trouble meeting payroll for the Dodgers in April, taking out a loan from Fox at the same time he was presenting MLB with a potential multi-billion television deal with the media conglomerate. The possibility of a historic franchise becoming insolvent was too much for Selig, as he and MLB wrested control of the team.
Selig is not expected to be at the meeting, according to the Times.
Last Wednesday, Bud Selig and Major League Baseball basically seized control of the Los Angeles Dodgers, wresting the organization from the hands of Frank McCourt. Selig said at the time that he would soon name a trustee to handle the Dodgers' day-to-day operations, and on Monday, he has done just that.
Meet Tom Schieffer. Schieffer has been appointed as the Dodgers' trustee, and he'll be in charge of all of the businessy things that baseball teams always have to worry about.
The 63-year-old Schieffer was the president of the Texas Rangers between 1991-1999, and the team's general partner between 1994-1998. He was an investor in the ownership group headed by George W. Bush, and has a distinguished track record of accomplishments both in and out of baseball, having served three terms in the Texas House of Representatives, and having served as the US ambassador to Australia, and then Japan.
We are very fortunate to have someone of Tom Schieffer's stature monitor the operations of the Los Angeles Dodgers on behalf of Major League Baseball. Tom is a distinguished public servant who has represented the nation with excellence and has demonstrated extraordinary leadership throughout his career. The many years that he spent managing the operations of a successful franchise will benefit the Dodgers and Major League Baseball as a whole. I am grateful for Tom's acceptance of this role.
Schieffer was just one of many candidates for the job. He will most certainly have his work cut out for him.
From Jim Bowden:
Stan Kasten is the front runner to run the day to day operations of the Los Angeles Dodgers.He is no longer an owner of the Nats or any role
Bowden used to work for Kasten, so he might be expected to have some special insight here.
Kasten's got a sterling reputation within Major League Baseball, having served as president of the Atlanta Braves from 1986 through 2003, then as president of the Washington Nationals from 2006 through 2010. Generally speaking, Kasten's always delegated the baseball decisions to his general managers and focused on the business end of things. So if he does take over in Los Angeles, GM Ned Colletti figures to have a free hand in things, within financial limits.
Whether it's Kasten or someone else, Commissioner Selig will almost certainly appoint someone with an unblemished and well-known reputation. It's just too bad Sandy Alderson is already running a franchise in turmoil.
With the stadium and territorial rights issues faced by the Oakland Athletics, it was thought that current A's owner Lew Wolff would have interest in purchasing the Los Angeles Dodgers. Wolff lives in the Los Angeles area, and it made sense that a firmly entrenched franchise such as the Dodgers might have appealed to him. Today, though, Wolff denied any interest in owning any team other than the A's. From Steve Dilbeck of the Los Angeles Times:
Although Bud Selig's takeover of the Dodgers on Wednesday could lead to a sale, Oakland Athletics owner Lew Wolff said Thursday he would not be a buyer.
"I'm not interested in the Dodgers," Wolff said.
According to the Times, a list other potential buyers could still include Mark Attanasio, current owner of the Brewers -- though he shot that rumor down today -- and current White Sox executive Dennis Gilbert, who led an effort to buy the Texas Rangers last year.
The article also lists Mark Cuban as a potential bidder, though it seems as if MLB would rather approve Frank McCourt with an alias and a fake mustache to buy a team before they approved Cuban.
Hold off on those thoughts that Frank McCourt was going to raise up his hands, back away, and say, "OK, you got me. I'll get out of here." Steve Soboroff, who was hired as the Dodgers' vice chairman on Tuesday, claims that Dodgers co-owner Frank McCourt is in great financial shape. From the Los Angeles Times:
"This is like having money in the bank and having somebody hold your ATM card," Soboroff said. "The money is in the bank. The Fox deal is done. These actions are not allowing him to access money. That's a lot different than saying he's got financial problems."
The "Fox deal" that Soboroff refers to is a 20-year television contract between the Dodgers and Fox that would be worth at least $3 billion. McCourt reportedly presented the proposal to Selig, who had yet to approve or reject the deal before MLB took over control of the Dodgers' finances.
A McCourt-hired employee who has been on the job for about 48 hours, and who is willing to go on the record with quotes like this?
"That is not the issue. They have made a decision they want somebody else," Soboroff said. "There's a predetermined campaign to blow (Frank McCourt) out of town. I think it's irresponsible and it's hurting the city.
That's probably a pretty good indication that McCourt is at least thinking about fighting Bud Selig and MLB.
SB Nation L.A.’s Eric Stephen:
The erosion of confidence in the team has been apparent this season at Dodger Stadium. Attendance has dropped significantly within this season. On their second homestand of the year, three of the last five games have had crowds under 30,000, something that hasn’t happened since 2004. Don’t forget, that is just tickets sold; judging by the actual number of people at the park, it appears attendance has been far lower. This has been the perfect storm of negativity in Los Angeles: fans are fed up with McCourt, the Dodgers are struggling on the field, and the perception of Dodger Stadium as an unsafe venue has skyrocketed since the opening day beating of Bryan Stow and the too little, too late, PR-driven response from McCourt was distasteful.
There are still many questions to be answered in the coming weeks and months, but McCourt’s rein in Los Angeles is obviously limited. And it’s hard to imagine anyone missing him.
Wednesday night, Frank McCourt issued a 33-word statement regarding Major League Baseball’s move to take control of the Los Angeles Dodgers’ finances:
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.
Obviously, there are different ways to interpret “compliance.”
Bill Shaikin (via the L.A. Times):
Although Commissioner Bud Selig wrested financial control of the Dodgers from Frank McCourt on Wednesday, the end of the era of McCourt ownership is neither imminent nor guaranteed.
Selig also has anticipated the possibility of a legal response by McCourt, which could delay any ownership change for some time, according to two parties briefed on Wednesday's announcement but not authorized to discuss it publicly. Neither McCourt nor any of his representatives had issued a statement within three hours of Selig's announcement.
In addition, the divorce of McCourt and his ex-wife, Jamie, has yet to be settled. Jamie McCourt has asserted her claim of 50% ownership, based on California community property law. Those claims could take some time to resolve as well.
Nothing's guaranteed, but I'll be pretty surprised if anyone named McCourt is still running the Los Angeles Dodgers a year from now. Whether "less than a year" qualifies as imminent or not, I'll let you decide. And the divorce proceedings could certainly throw a spanner into the works. But Frank McCourt seems to be in some desperate need of money, and the quickest riches would seem to be selling one of the most prestigious properties in professional sports.
Unless McCourt's able to regain control of the Dodgers, presumably through the courts, I think he's likely to give up fairly soon and get the best deal he can get. Unfortunately, that probably won't happen soon enough for management to have the direction necessary for an aggressive drive to the postseason.
And doesn’t remember it fondly. Jonah Keri (via FanGraphs):
Not again. Good Lord, not again.
It’s impossible to see Bud Selig’s announcement that Major League Baseball will assume operating control of the Los Angeles Dodgers and not remember the last time MLB made this move.
On Valentine’s Day 2002, the league did the same with the teetering Montreal Expos. By the end of the 2004 season, MLB had presided over a trade that set the Expos’ successors back several years, helped short-circuit a last-gasp playoff run, ended baseball for good in Montreal, and reminded us why a sports franchise in league hands is a catastrophe waiting to happen.
And Keri proceeds with the grisly details. Yes, he’s still bitter. No, you can’t blame him.
The stunning news that Major League Baseball was taking over financial control of the Los Angeles Dodgers didn’t exactly come out of nowhere, but it is a drastic move that MLB hopes will preserve one of baseball’s oldest franchises. As everyone attempts to sort out the exact implications of the move, here are some of the initial impressions from people around the game.
Buster Olney first noted the implications of the move, suggesting that this was far from over…
Lest there be any doubt: MLB’s takeover of the Dodgers is a two-handed shove out the door. We await Frank McCourt’s legal shoves back.
…before waxing poetic with an appropriate analogy:
The McCourt debt/financial issues were like snow piling on a flat roof: The cave-in for a storied franchise like LAD convinced MLB to move.
The first to draw parallels between the Dodgers and how MLB handled the Montreal Expos was Joe Sheehan, who tweeted:
Well, any time you can re-create the management magic of the 2003-2005 Expos/Nationals, you have to do it.
Ken Rosenthal provided some back story on the MLB/Expos connection here, a story in which he also described the situation with Bud Selig and the Dodgers as “an intervention.”
And the esteemed Peter Gammons summed it up as succinctly as possible:
Selig to McCourt: It’s over.
With McCourt leveraging the franchise more and more under financial pressure — especially considering the ownership of the team was in dispute — it seems like MLB couldn’t afford to take a wait-and-see approach.
Breaking: (Bud) Selig expected to announce this afternoon MLB will take over Dodgers' financial operations.
Earlier this week, Los Angeles Dodgers' owner Frank McCourt took a $30-million loan from Fox in order to make payroll. The money was loaned to McCourt, not the Dodgers, and according to the Times, it was the second time that Fox had loaned money to McCourt to cover organizational costs. Apparently, it was the financial straw that broke Major League Baseball's back.
Bud Selig released the following statement about the move:
"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."
McCourt has been a controversial figure in Los Angeles since October 2009, when it was announced that he was divorcing his wife, Dodgers CEO Jamie McCourt. The legal battle has been messy, with Jamie McCourt continuing to maintain that she is rightfully the co-owner of the team. In December of last year, a judge invalidated a post-nuptial agreement that Frank McCourt claimed had given him sole ownership of the Dodgers.
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