Dodgers' owners Frank and Jamie McCourt to separate, placing ownership in doubt

DoppelgangBang:

BTW ... with the Yankees looking like a lock to win this WS, it's just making me sick and annoyed at all of MLB again. The Yankees had some payroll room and tons of needs and they just went out and GOBBLED UP all the best FAs ... are CC, Burnett, and Teixera helping them to this title? Yes. And their damn payroll is more than TWICE ours. And we're the next biggest market. They're still 50M above 2nd place ... it's just sickening, honestly.

I hate the yankees so much.

I'm not sure I'd want the Dodgers in a situation where they could emulate the Yankees. I think it's bad for baseball, but until the MLBPA gives in to a cap of some sort, it's the way it's going to be.

grabarkewitz:

Actually Ken, I think the $25 to $50 million that seems to be unaccounted for is just the tip of the iceberg. Something smells about this franchise from the neck up. This team is a freakin' money machine. The only way you lose money is if you are not doing it right, like Fox. Frank & Hot Lips have managed to surround themselves with smart people who can stretch a dime. The thing is, they shouldn't have to. Even with a crappy television deal, this team still makes money in that aspect. The team sells out Dodger Stadium on a regular basis, we got a sweetheart deal on Camelback Ranch and even in the Bay Area, I see tons of Dodger merchandise. The money should be flowing like the mighty Mississippi.

Corey mentions equity, but I get the scary feeling that the McCourts are only meeting their financial obligations, but doing very little to pay down the massive debt on this team. I mean if the Giants, who don't have our revenue stream, can spend while paying off their amusement park, can operate the way they do, then why can't we? I am going to be one very interesting observer when the financials start becoming public.

I think it will probably prove true that The Brand rode the peak of the equity bubble over the past few years as much as anybody. The multiple palaces they "own" are probably highly leveraged with minimal down payments, and now worth about what they owe.

The $16M palace they sold in MASS was probably highly leveraged. Frank felt his parking lots in Bahstahn were worth over $350M, while the local real estate experts valued the properties at closer to $150M. After failing to find a flush buyer in 2 years Frank was forced to sign over the parking lots to Fox in exchange for a $140M note. I do think he made a big cap gain on that land.

Frank and Hot Lips seem to have played a high stakes version of house flipping, and could have ended up pretty well given the cash cow the Dodgers are, had they not gone splittsville. The $1.2B in assets Hot Lips mentions is probably overstated by double at this time, and the remaining $600M in value is probably made up 75% of debt. Another 4-5 years of their shell game of drawing big $ out of the Dodgers franchise could have resulted in their empire having a net worth near $1.25B, with over half in equity, but that would depend on a rebound in the economy and continued buy-down of debt. In effect, Hot Lips is counting her chickens before they hatched.

Mike Scioscias tragic illness:

Well... CC and Teixeira are...

Burnett was dominant in his first start against the Phils, but they lit him up last night, all right. He has a repuatation of being either "On" or "Off", and that's been the case this postseason.

Babe Herman:

DT has a heads up about a site called DODGER DIVORCE. Before you blow it off as some kind of TMZ type deal, to me it looked like a good clearing house of information. There's a real good (scary) post there about the financing of the Dodgers by the McCourts.

It is even worse than I speculated. There is no way the Dodgers can spend any money while this divorce is going on. Hell, the franchise is leveraged to the hilt and that is assuming the McCourts haven't spent the dividend in maintaining their jet set life style. Kudos, Bud Lite, kudos! By pushing this money-challenged nimrod and his life-sucking wife onto one of baseball's best franchises, you have done more damage to the game in your short tenure than all of the other massive screw ups done in the name of baseball since Abner Doubleday laid out the first diamond (I know he didn't invent the game, but I needed some literary license). Someone please explain how Bud Lite does not end up in a court room as part and parcel of this farce?

Babe Herman:

DT has a heads up about a site called DODGER DIVORCE. Before you blow it off as some kind of TMZ type deal, to me it looked like a good clearing house of information. There's a real good (scary) post there about the financing of the Dodgers by the McCourts.

I saw that last night. A website devoted to a particular divorce - What a country !

The host started out projecting their real worth (equity) at about $600M, which is 4 times from of the top of my head $150M (25% of $600M) projection of a few days ago, but the more he pondered the more he dropped his figure.

Great data though. A $770M team value minus $420M or so in debt load yielding $350M in net worth to The Brand is good math, but may be poor projection. As the host notes, they are likely to get a much lower sales price if they are forced to sell. As such, I might reduce the selling price by 20%, or $150M, below the team value estimated by Forbes. AND, The Brand's track record is to spread what $ they have around, on multiple holdings, as opposed to placing a lot of cash (equity) in any one holding. So, I would project that the actual debt associated with the Dodgers is 10% to 20% above that $420M figure. All told, this would bring their equity stake in the Dodgers down closer to $150-200M.

As to the other $400M in holdings referred by Hot Lips. I think those assets are as illusory as was the value of their original parking lots in Bahstahn. Frank felt the parking lots were worth close to $400M, but ended up defaulting that land to Fox 2 years later as he couldn't make his projected killing by selling the land, and could otherwise not pay the loan to Fox. As excellently documented on the Divorce site, the Bahstahn parking lots were swapped for a $145M note - and then Fox found out that there was almost $60M in debt associated with the land ! So, Franko's $400M Bahstahn land ended up netting all of $90M. I think the $400M in non-Dodger properties being hyped by Hot Lips now will end up netting a similar value - lots of heavily leveraged properties that haven't escalated in price to anywhere near where they hoped.

So, I think as things progress the projections of Frank & Hot Lips true wealth will narrow toward $250-300M in total, and Frank will have to part with his beloved money tree.

kennerbuggy:

That was very interesting. It goes hand in hand with Hot Lips arranging their asset claims to where she had no liability associated with the team. Frank wanted the team $. Hot Lips wanted the safest $.

All this scheming, and around each other, AND long ago, is what is making this divorce situation such a blood bath.

The separation of the land from the stadium and club will probably lead to some nasty twist - for us and the city.

I am looking more and more forward to the day when the accountants get involved. This is not going to end well for Bud Lite, the McCourts and worst of all, the Dodgers. I am hoping that Bud Lite realizes his mistakes and gets someone with real money to buy this team and has the willingness to spend to keep the franchise strong. I go back to the Brewers' sale. Bud Lite made sure his team was sold to a person who had money, was willing to be there for the long haul and didn't need to rely on the team as his sole source of his wealth. One has to wonder why no one said anything when the sale to the McCourts was being discussed? Was the fix truly in? Is there that much Dodger hatred from Bud and his cronies that he would hamstring one of the premier franchises in the game to make sure the game is all about Boston and New York?

This has been gone over before. Bud Selig was indeed doing Fox a favour in choosing to approve the sale of the Dodgers to the McCourts. The McCourts were the only people who were willing to buy the Dodgers without also insisting on having Prime Ticket included in the deal. Fox wanted to keep Prime Ticket for themselves. After all, that's where the real money is.

The Yankees own YES and are making good money via the network.

The Red Sox own NESN, which made up more than half the value of their sale the last time around, and they make good money off of it.

The Dodgers own... nothing. At least so far as television networks are concerned.

Fox used the Dodgers and Prime Ticket (as well as Fox Sports West and a long-term commitment to the Angels) as a means of preventing ESPN from launching ESPN West in the late 90's. Once that was accomplished they didn't care who they sold the Dodgers to so long as Fox got to keep Prime Ticket as part of the bargain.

And boy did that get LA a great and wonderful owner.

bigblaster:

How long are the Dodgers contracted to PT?

I wanna say just another year or two ... but not certain.

More warm fuzzies from Bill Shaikin of the Times.

Oh, now I see that the host of "Dodger Divorce" refers to Shaikin's article for some of his info.

http://www.latimes.com/sports/la-sp-shaikin4-2009nov04,0,5095602.story

grabarkewitz:

Shaikin has found his niche, court reporter to the wannabe stars.

I hope that there is more and more exposure from local media of all of the dealings of these owners. I hope it will be relentless and the divorce fallout will culminate in their relinquishing the team to more worthy owners.

This wonderful organization does not deserve these two. Los Angeles and its fans deserve better. Unfortunately, it will drag out. Frank McCourt is a very dogged individual who would hold on until the last possible second to this team until he is forced to sell. Such grandiose delusions of his "stewardship."

Even DT is jumping on the bandwagon, although some of his regulars have been saying the same thing for years. Let's face it, the McCourts talked the talk, but never went farther than that. Player development, the lifeblood of any decent franchise is dying with this team. Sure, they spent over slot on Garrett Gould, but that is a rare occurrence. Like Weisman says, player development takes will and patience - two things that are lacking with this ownership. Evans rebuild the farm in short order because he hired the best people and he knew that down the road the payoff would be huge.

Then, when the payoff is about to show, the McCourts buy this team and give the architect the boot while mouthing that they will build from the ground up. We should've been scared then. Evans had done all the heavy lifting while Frank & Hot Lips took credit. Now, we are back to nearly the same situation when at the end of the O'Malley era. We were still spending the dividend in Latin America, but it was being wasted because of poor scouting (thanks, Omar Moreno, Jr. ) and our drafts were a joke (who can forget dropping the number five pick on Bill Bene or passing on Delino DeShields to draft the already injured Dan Opperman?). At least Dodger Boy wasn't shy about spending on the draft or the international market. Now, we have Logan White, the best at his game, rummaging through the bargain basement because his bosses are more interested in appearances than reality.

Even when the McCourts sell, can we trust Bud Lite to do right by this team? First, we had Fox, who were willing to spend the money, but spent it in all the wrong places. Now, we have the McCourts, 'nuf said. Should we be scared that Bud is going to try this again? I know I am terrified at the potential outcome. Donald Sterling is still rich - try to sleep through that, tonight.

JamesMiranda:

You know, I heard Mark Cuban was once interested in buying the Cubs...

This is true, but Bud Lite does not let just anyone into his clubhouse. Right now, he has some big problems. Tom Hicks is fighting for his financial life in Dallas and Liverpool - the MLB is propping up the Rangers and his partner with Liverpool in the Premier League is getting death threats and wants to sell. It doesn't end there. I have to question whether Rogers Communications will hold onto the Jays. I would also wonder when Ken Kendrick and his ownership group grow tired of trying to make a go in Phoenix. I mean, Bud Lite has a snootful of problems and the McCourts are just part of it.

Since Selig has been trying to screw the Dodgers for years maybe someone can convince him that forcing Cuban upon us is the perfect way to accomplish that. Maybe he'll believe that Cuban would be a horrible owner as he's the opposite of what Selig wants to institute for most teams.

arbfuldodger:

Hot Lips' boy toy may not be all he seems ...courtesy of TMZ

This just keeps getting better.

Babe Herman:

This just keeps getting better.

It sounds like now that Fuller's ex stands to get a nice increase in alimony and child support, she is recanting the previous physical abuse accusations.

I really have a problem understanding how someone in line to inherit the Pillsbury fortune or part thereof, could take a job as a "driver".