Thursday, April 21, 2011

High finance and low lifes

Bud Selig and Frank McCourt, 2006:
Don't look at him with the naked eye!
No matter what happened Wednesday on the playing fields of Major League Baseball, the biggest drama happened behind closed doors when Commissioner Bud Selig essentially seized control of the Los Angeles  Dodgers.

Any MLB franchise is valuable, financially and otherwise, but some are more so than others. I am, of course, devoted to the Twins; I honor and respect the histories and traditions of the teams in Pittsburgh and St. Louis, Detroit and elsewhere; but there is no doubt that (despite the best efforts of the Bostons, Chicagos and Philadelphias) that the cornerstone teams of baseball are the New York Yankees and Los Angeles Dodgers -- the dominant teams in the nation's largest metro areas, one on the East Coast, the other on the West Coast, one in the American League, the other in the National.

And now the Dodgers are effectively in receivership. It's a complex and tawdry tale, which can perhaps be summed up thusly: Frank and Jamie McCourt, the married/divorced couple who took the Dodgers off News Corp's hands, looted the operation.

In recent days it was reported that Frank McCourt borrowed $30 million from Fox -- News Corp again -- to meet payroll. This on top of some $430 million in long-term debt with which the McCourts saddled the operation.

Selig has repeatedly this spring blocked Frank McCourt -- who has continued to operate the Dodgers single-handedly despite a court ruling that the team is community property -- from tying up the lucrative television rights with News Corp. McCourt, without question, needs capital; Selig pretty clearly regrets ever letting these clowns in to the ownership club and wants to force both Frank and Jamie out; and News Corp is eying a potential killling.

I don't think Selig is afraid that Fox wants to own the Dodgers again; News Corp has been there and done that. I think he fears that McCourt's immediate financial desperation will lead to a too-cheap long term TV contract that will make the Dodgers a less attractive property. Fox doesn't need to buy the cow if it can get the milk for free.

This fiasco isn't over yet. McCourt apparently intends to fight this out, although he is surrounded by problems, each of which might be enough to topple him -- not the least which is a reported IRS investigation into the financial manipulations by which he and his (ex-)wife pulled some $100 million out of the operation for personal use without paying a dime in taxes.

Meanwhile, we'll see how long it take Selig to do unto the Wilpons and the Mets as he has to the McCourts. One key difference, I fear: He likes the Wilpons and doesn't much care for the McCourts.

I offer this link if you're interested in the sordid details: Dodger Divorce is a first-rate blog run by a University of Minnesota law student that has been on top of the McCourt divorce saga from the get-go.

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