NO LOVE FOR THIS SALE - On All Saints Day, Angelenos were blessed with a joyous proclamation that the Los Angeles Dodgers and Major League Baseball agreed to the sale of the Dodgers and its media rights under the supervision of the Federal Bankruptcy Court.
But before we start singing the Hallelujah Chorus, we need to realize that you cannot trust Frank McCourt, the product of the corrupt Boston construction business, as far as you can throw Shaq with your left hand tied behind your back.
The key question is whether there is enough money in the deal to satisfy Boston Frankie.
The Dodgers have over $700 million in debt. This amount includes $150 million of debtor in possession financing that was needed to replenish the team’s working capital that had been plundered by McCourt family.
Boston Frankie will also have to fork over $130 million to Princess Jamie, his spendoholic former wife who has taken to living in her $46 million Malibu estate now that the Holmby Hills estate is on the market at a fire sale price.
Boston Frankie and the Dodgers also have legal bills that may approach $50 million for the divorce and the bankruptcy cases as well as footing the legal bills and other related expenses for Major League Baseball.
Then there is the small matter of taxes that will be in the range of $150 million. The taxes will consist of taxes at ordinary rates on the recapture of the depreciation of the value of the players’ rights and real estate as well as capital gains on any remaining profit.
The Internal Revenue Service may also levy some additional fines based on its current audit of Boston Frankie’s overly aggressive accounting policies, especially those related to the write off of personal expenses such as jet planes, expensive hotels, children on the payroll, and huge dinner tabs, including those with various elected officials who have acquired tastes for high end wines paid for by third party supplicants.
And do not forget the contingent liabilities associated with the Bryan Stow beating and Boston Frankie’s personal borrowings.
In addition to Boston Frankie’s substantial liabilities, there is also the question of the value of the Dodgers, its related assets, and its media rights.
Other Dodger sale columns:
● “Who Are the Potential Owners of the Dodgers?” - Daily News
● “How Top Suitor Dennis Gilbert Got Rich? – LA Weekly
While Boston Frankie will say that the Dodgers are worth well in excess of $1 billion, will any sane buyer be willing to pay a record price for a team that is losing money, where paid attendance is off by 18%, where there is substantial discounting of ticket prices too artificially inflate attendance figures, where no shows are 25% of the paid attendance, and where very valuable season ticket sales are off by over 35%.
At the same time, any new owner will need to make a considerable investment in the team and the stadium.
To produce a winning team, the new owner will need to increase the Dodgers payroll by more than $50 million to attract new talent as well as retain Matt Kemp, Clayton Kershaw, and selected other players.
The new owner will also need to spend big bucks to remodel, if not gut, 50 year old Dodger Stadium, hopefully restoring the old infield while adding skyboxes and other premium seats that will be needed to fund the increased payroll.
The new owner must also invest in a well thought our marketing and advertising campaign to help restore the Dodgers’ tarnished image and appeal to the changing demographics. Of course, just being rid of Boston Frankie … the most despised person in all of Southern California … will be worth millions.
Most importantly, our new owner will also need to build a knowledgeable management team that has the ability to select and sign talent that will fit with the team, rebuild the Dodgers farm system to a point where it will provide young, homegrown talent, and operate and market the team on a day to day basis.
All this means that we need to have a new owner who is willing make a substantial equity investment to buy and improve the team and then be patient enough to wait for future returns.
There is no doubt that Boston Frankie made the right decision to work with Major League Baseball in “a manner designed to realize maximum value for the Dodgers and their owner.” Otherwise, he would be fighting a very expensive, no win battle against Major League Baseball, Fox Sports, the banks, and the fans with the very strong possibility that he would lose everything as no sane buyer would be willing to inherit his problems.
Nevertheless, there is a real possibility that the Boston Frankie’s needs are substantially higher than the value of the team. So what happens then?
Are there any provisions in his settlement with Princess Jamie that will force Boston Frankie to pay even if he does not sell the Dodgers? And if so, where does he get the required cash?
Does the agreement with Major League Baseball require the sale of the Dodgers at any price, or are there certain thresholds that must be met? Or will Major League Baseball Major make up any shortfall just to be rid of the worst owner in baseball?
The answer is that we do not know.
But we need to remember that we have the power of our wallets and that power is what precipitated the fall of the plundering dirtballs.
Attendance dropped by 18%. The now shows were 25%. And as a result, revenues and profits headed south, resulting in an operating loss so that the Dodgers were unable to pay the banks the interest on the $550 million of loans.
And we need to maintain the pressure by not buying season tickets, by not attending Opening Day, by trashing any politician that dares to appear on Opening Day, and by boycotting the sponsors and advertisers such as Untied Airlines, Southwest Airlines, Toyota, Hyundai, and Bank of America.
We need to save Vin Scully, the voice of the Dodgers since 1950, our institutional memory who reminds us of the “Boys of Summer” as if it were yesterday, who remembers our six World Series (1955, 1959, 1963, 1965, 1981, and 1988), and our heroes of the past.
So say NO to Boston Frankie until we are able to send his sorry stealing soul back to Boston. And then we all can stand and sing the Hallelujah Chorus.
(Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com. He can be reached at: [email protected] ) –cw
Tags: Dodgers, LA Dodgers, Frank McCourt, MLB, Major League Baseball, Jack Humphreville, Vin Scully
CityWatch
Vol 9 Issue 88
Pub: Nov 4, 2011