It sounds to me like Jamie McCourt still wants to run the Dodgers. This statement comes from her lawyer:
Today’s bankruptcy filing is disappointing and disturbing. During the years Jamie McCourt was CEO of the Dodgers, the team’s financials, although heavily leveraged, were stable and improving. In the almost two years since Mr. McCourt fired her and took over management of the Dodgers, Mrs. McCourt has made repeated proposals to resolve her right to 50% of the team in a way that would preserve the value and integrity of the Dodgers for Dodger fans, for Los Angeles, and for her family. She has continued to do so despite the many personal attacks against her by Mr. McCourt and his representatives.
The rule or ruin philosophy that appears to have motivated today’s filing is bad for everyone who cares about, or has an interest in, the Dodgers.
This is why I think getting Jamie out of the way by letting the TV deal and the divorce go through would have been a good idea. All these complicating factors are just going to make it that much harder for MLB to resolve this situation effectively.
Please stop advocating that TV deal. It was a 17 year contract for TV rights far below market value designed to funnel 300 million dollars to settle the McCourts divorce debts. There was never any chance it was going to go through, and if it had it would have been far more damaging than anything McCourt has done or could do to that team. Josh Rawitch’s blog as well as Bill Shaikin have done a great job breaking this down for people, and I’d refer you to their work before you write another post claiming that approving that TV deal would have simplified anything at all.
Sorry David, but I think Brett’s right. The Fox deal would not have made anything more simple, other than resolving the Jamie-Frank divorce.
Thing is, the divorce is really not that complicated. All that will come of the divorce is how the assets are split when the team is sold – one way or another. Yes, it complicates the bankruptcy proceeding that the ownership of the Dodgers is still in question. But all of these issues are going to be resolved eventually, regardless of their order.
The Fox deal would have depressed the value of the franchise, leaving the Dodgers in such a state that any potential owner would be taking on serious risk. This would likely have cut down the pool of potential owners considerably. (There may be a fair number of people who can afford to buy a MLB team, but the # of people who can buy a team and then pour gobs of $ into is significantly smaller). The Fox deal would have complicated the issue, not simplified it.
Dylan » The way I understand the Fox Deal, was worth between $1.7 and $3 billion for 17 years. In other words, $100 to $176 million per year. That strikes me as a hell of a lot of money, enough to put the Dodgers in the top three or four in payroll for the next two decades. Even if the McCourts take a big chunk of that up front to settle their finances, they’re going to be in good shape for the next decade, given the money they make from ticket sales, national broadcasts and MLB.com, as long as they start managing the team properly.
If the Dodgers can’t run their team with a $100 million a year local TV contract, something is really seriously wrong.
Everybody keeps talking about the Dodgers not being able to afford to pay their players, but what about others things, such as…
Paying electricity bills for floodlights to be on?
Paying for plane travel to away games?
etc.
MLB is not trying to resolve anything but to force McCourt out, probably because they found someone who might want to own the Dodgers if they could get it for 10 cents on the dollar.
The McCourts own the Dodgers, why can’t they take whatever money they want out of it so long as they can keep the team competitive (4 playoffs in 7 years is not bad).
The Fox deal gives the DODGERS 3 billion over 17 years, not bad, even if some if it is paid up front and taken out by the McCourts.
If they set up a RSN it would not be owned by the Dodgers, just like NESN is not owned by the Red Sox (it is owned 80% by the Red Sox owners, but the profits do not go to the Red Sox, the Red Sox just receive the money for the broadcasting rights which are below market value to reduce revenue sharing).
If Jamie forces a sale, so what. MLB still has to approve the new owner, the only difference is McCourt will be in charge of the sales process and Jamie might take MLB to court if they reject a deal for no good reason. Jamie will want to maximize the sales price, so she should not want to force it in a manner that devalues the Dodgers.
Anyways, assuming the DIP financing comes through as a result of the Chapter 11 filing, McCourt does not need the Fox TV deal and can set up his own RSN in 2013, and Jamie might find forcing a sale more difficult with the Dodgers are under bankruptcy protection.
Be interesting to see if the court upholds MLB’s position that under it’s constitution, teams can not file for bankruptcy without it’s approval. My bet is that it does.
“The Fox deal would have depressed the value of the franchise, leaving the Dodgers in such a state that any potential owner would be taking on serious risk. This would likely have cut down the pool of potential owners considerably. ”
This is nonsense, the new owners would not be inheriting any debt as the Dodgers have assets of 1 billion against debt of 500 million. The debt gets wiped out before McCourt gets a dime (sales price-debt). There is no risk aside from that of getting on Seligs bad side and having him steal your team by rejecting TV deals.
Since when does a 3 billion dollar deal over 17 years less the 300 million McCourt takes out in advance decrease the Dodgers value anyways given the current agreement pays them 35 million year.
Also, with the Fox deal, concerns of selling the Dodgers likely become moot if Jamie can be convinced to schedule some of the payments for her share in the Dodgers over time and at interest.
David’s stuck on this idea of letting the TV deal go through. But how would that make it any easier to get rid of McCourt, which is obviously MLB’s goal?
David thinks Bud could get the other owners to force McCourt out after the Fox deal, but how would that work? Especially when McCourt would have huge money from the TV deal to drag out litigation forever. If you want to get rid of McOurt, you have to starve him of money.
I really don’t care one way or the other about McCourt, who’s being used as a scapegoat for much more serious problems in baseball (long-term decline in popularity, falling attendance and TV ratings, lack of offense aggravating all the other issues). But if you want McCourt out, the last thing you do is let him get three billion bucks from Fox.