Distressed over the deteriorating financial condition of the Los Angeles Dodgers, Commissioner Bud Selig has seized control of the flagship MLB franchise and will appoint a trustee to oversee “all business and day-to-day operations” of the ballclub.
The surprise move came after a questionable $30 million personal loan to Dodgers owner Frank McCourt from Fox Sports to meet payroll, a loan that sidestepped Selig’s approval.
Here’s the official word from Selig:
“Pursuant to my authority as Commissioner, I informed Los Angeles Dodgers owner Frank McCourt today that I will appoint a representative to oversee all aspects of the business and the day-to-day operations of the Club. I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball. My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt’s ownership. I will announce the name of my representative in the next several days.
“The Dodgers have been one of the most prestigious franchises in all of sports, and we owe it to their legion of loyal fans to ensure that this club is being operated properly now and will be guided appropriately in the future.”
Basically, MLB will control the team, approving all significant financial changes to the Dodgers’ ledgers (i.e., trades and contract extensions). Most in baseball see this as a precursor to a sale of the franchise, as Selig is reportedly ready to invoke the “best interests of baseball” clause of his duties to bring in new blood.
The implication is clear: Selig takes a dim view of how Frank McCourt — and, to be fair, Jamie McCourt as well — has ravaged the team’s finances while running up some $433 million in debt. While the team reportedly would have had issues meeting payroll without the Fox loan, the McCourts lived quite the opulent lifestyle, taking $108 million out of the team coffers and spending tens of millions on the likes of new houses and a Russian physicist, Vladimir Shpunt, hired to channel positive thoughts toward the team. In February Selig shot down a $200-million loan from Fox that would have settled the McCourts’ divorce proceedings, pledging future television revenues as repayment — but a deal totally in Fox’s favor. If the loan was not repaid, Fox could extend the current Dodgers broadcasting deal for $50 million a year. A bargain, when you consider large-market media deals are usually much more lucrative: in Dallas-Fort Worth, Fox Sports pays $80 million yearly to the Texas Rangers ownership for TV cable rights.
Jamie McCourt, who certainly has some culpability in the proceedings (before she and Frank split, she collected a large salary from the team, and the pair also basically charged the Dodgers rent to play at Dodger Stadium), issued the following statement: “As the 50% owner of the Los Angeles Dodgers, I welcome and support the Commissioner’s actions to provide the necessary transparency, guidance and direction for the franchise and for the Dodgers fans everywhere.”
Attendance is down at Dodger Stadium this season; even before San Francisco Giants fan Bryan Stow was beaten in the Dodger Stadium parking lot on Opening Day, the Dodgers season-ticket base had deteriorated by some 10,000 over the last five years (27,000 in 2007 to 17,000 now, according to court documents), and attendance in recent games have slumped thanks to fan concern about the atmosphere at Dodger Stadium, which by all accounts has deteriorated in recent years.
It’s been a busy time for Selig in terms of franchise management. Last year he directly interceded in the affairs of the Texas Rangers, with MLB lending owner Tom Hicks some $40 million during tough times, arranging the sale of the team to a group that included Nolan Ryan and Chuck Greenberg — and then issued some strong warnings when Hicks and his lenders tried to back out of the deal. He also arranged a $25 million loan to the New York Mets before heavy losses suffered by team owners due to the Madoff trading scandal were made public.
It’s a sad turn for the Dodgers, once one of the most stable franchises in baseball under the ownership of the O’Malley family; it was the sort of operation where long-time employees were treasured and employees received a free ice-cream cone every day the team was in first place. Fox, who bought the team from the O’Malleys, didn’t exactly distinguish themselves but didn’t run the franchise in the ground, either.
The next move: the appointment of an MLB rep to run things. After that, let the speculation begin over a potential new owners; Mark Cuban‘s already been asked about his interest (yes, he’s interested, but not if it comes down to a bidding situation; surely Cuban knows he’s loathed by enough MLB owners and members of the commissioner’s office to know he won’t be offered the team on a silver plater), but the ideal candidate would be someone with strong ties to the Los Angeles business community, someone who knows development and someone who could afford both the team and Dodger Stadium. Someone like Lew Wolff.
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