The love-fest is all but over. This morning Major League Baseball seized control of the Los Angeles Dodgers organization. Commissioner Bud Selig announced that he plans to appoint a trustee to oversee “all business and day-to-day operations” of the Dodgers ballclub.
Selig’s statements includes;
“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.”
The McCourt’s ownership seemed contrived from day one. The McCourt’s highly leveraged purchase of the Dodgers in 2004 was viewed skeptically. McCourt actually needed a $145-million loan from Fox, the team’s previous owner, to finalize the deal.
The Commissioner previously rejected McCourt’s $200 million loan deal with Fox Sports because it would not benefit the team. Last week McCourt, essentially went around Selig’s back to acquire the needed $30-million loan from Fox in order to meet payroll. Apparently, this was the last stand for Major League Baseball. As the LA Times put it; the loan was secured with “funds that McCourt does not have.” McCourt has been acquiring assets with other highly leveraged assets for years. Finally, the McCourt’s miraculous reign over the Dodgers is over.
The separation of Frank and Jamie McCourt has been a messy one for Major League Baseball. During the proceedings court documents from the McCourts’ divorce revealed that the Dodgers had been charging themselves millions in rent each year. Why, you ask? Because some of that money could then go toward the McCourt’s lavish lifestyle expenses.
According to a report, the McCourt’s have spent $167,050,000 on real estate for their personal and private use, and are consequently carrying $59,700,000 in mortgages. Those totals pertain to 7 lavish private residences from Malibu to Cape Cod.
Apparently creating parking lots (McCourt’s road to riches) is a lot easier than running a baseball team. If McCourt had continued down this path, Dodger Stadium, one of the greatest venues in sports, might have been turned into McCourt’s next lot.