In a ruling that could have a huge impact on the future of the Dodgers, and by extension, the Giants, NL West and MLB, the judge in the McCourt divorce proceedings ruled that a marital agreement signed by the couple was invalid. It really wasn't hard to see this one coming. The agreement itself had 6 signed copies, 3 of which specified that the Dodgers were owned solely by Frank McCourt and 3 that did not. During testimony on the subject, Frank McCourt's lawyer admitted to adding in the sole ownership language after the documents were signed. The only surprising part of the ruling is that it took 100 pages of writing to make! It seems to me it could have been made in two short sentences: The document was doctored. It's invalid!
The ruling does not directly address the issue of who owns the Dodgers, but absent a formal agreement, it's hard to see how Frank can make much of a case that the team is not family owned. Jamie had a title of VP and clearly was making important decisions about the team. At the very least, it would seem that she has a right to 50% of the team's value. The complicating part is the team will likely have much more value in the future than it does right now.
I have to admit that I'm not versed in divorce or property law, but in short, it seems like this ruling will most likely lead to the team being sold so the assets can be equally divided. To make it even more complicated, apparently one of the potential buyers out there is a group of investors headed by Jamie McCourt! On the other hand, Frank McCourt appears to be out there all by himself with his attorneys. What's bad for the Dodgers is that it appears likely that Frank McCourt is going to do everything he can to keep from either selling the team or giving up control of it. I can see a real possibility of the team going into bankruptcy by the time it's all said and done.
The strange part of all this is I think the Dodgers might well be better run with Jamie McCourt in charge. From everything I've read, she doesn't seem like a nice person, but I always thought she was the brains behind the operation. Frank seems like an affable bloke who was along for the ride, kind of like Michael Huffington(remember him?)
The best case scenario for the Dodgers and MLB, but probably not for the Giants and their fans, would be for a group led by Peter O'Malley and backed by Patron Saint of all things LA Eli Broad to buy the team. I'm not sure, but I think MLB has some say in who buys a team. I would think that MLB would back the O'Malley/Broad group over Jamie McCourt without having to deliberate on it very long. The thought of a Dodger team with Peter O'Malley and backed by Eli Broad's ultra-mega bucks is just plain frightening to any long time Giants fan.
Stay tuned. This could get even more interesting!
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I agree, with his lawyers admitting doctoring the documents, I would think it would be pretty cut and dry.
ReplyDeleteI don't get how it would go into bankruptcy court, do they owe someone money?
Interesting that Jamie is potentially bidding on Dodgers, because she would probably get $1 out of every $2 of the bid, meaning that she can up her bid by, say, $10M but know that she will get about $5M of it back (after lawyer fees and such), meaning her group really only put up $5M.
Wow, Peter O'Malley wants back in? Shouldn't have sold it in the first place then. Who is Eli Broad? Don't know who he is; should I?
I would have to think that there would be other ultra-mega bucks people who would want the Dodgers, and yes, the thought of that is frightening.
However, meanwhile, if Divorce Court drags on, that could put the Dodgers in a state of stasis for a while. The longer the organization is set adrift, the longer it will take them to get their bearings back.
The MLB has a say over the people coming in to buy the team, they have to be vetted by the league (you know, for any bad background, I don't think anyone with a criminal background, even slightly shady, can hope to get approved). You can thank their anti-trust exemption for that.
OGC,
ReplyDeleteOMG! Yes, the McCourts pretty much live on borrowed money. The borrowed 100% of the money to purchase the Dodgers! There are rumors out there that Frank is signing players to contracts he knows he can't pay just to drive the net value of the Dodgers down just so Jamie won't get anything out if it if they end up having to sell the team.
Eli Broad is a land developer in SoCal who made billions, apparently got out in time, and now funds pretty much every philanthropy and cultural edifice in the city of LA. Disney Hall, Museum of Contemporary Art, you pretty much can't go to any cultural or entertainment event in LA without seeing his name plastered on the wall as a patron.
There was a big article in the LA Times magazine pullout recently about how Peter O'Malley maintains an office decorated with Dodger stuff and has been quietly assembling a group of investors including Eli Broad in anticipation of the McCourts not being forced to sell the team.
That's pretty much all I know about it.
Wow, I knew he had to borrow money, because all his assets was in other properties, but it was my understanding that they sold all that so that the Dodgers were their only major asset, besides maybe their home. The MLB is usually pretty careful about allowing too much debt being taken on to finance a franchise purchase, from what I've read before, so I thought he should not be so close to bankruptcy. Maybe he took too long to sell off his prior properties and their value fell with the Great Recession. Wow!
ReplyDeleteDouble Wow and an OMG, I like to follow business so I'm surprised I never ran across this guy's name. He sounds like a more successful version of the A's owner, Wolfe, who also was a land developer in SoCal as well, but grew up in Bay Area (south bay to be exact, hence his desire to move team down there, I think).
Yeah, I believe Eli Broad was the Broad part of Kaufman and Broad whose names were on every other subdivision in SoCal for the last 20 years. You wanna know where all the money ended up that the banks and homeowners lost? Yup, Eli Broad's bank account! He's an older guy, though, so he might have cashed out before the big crash came. Anyway, he's loaded.
ReplyDeleteAnyway, Broad is a bit of a tease. He's been linked to bringing football back to LA many times and nothing has ever materialized there, so the O'Malley/Dodger connection may be more of the same B.S.
The bankruptcy comment might have been a bit of hyperbole in reference to all the money that's being drained to the McCourts' divorce attorneys, but I think it's actually a real concern. Frank has reportedly been trolling for investors over the past 2 years and has not been able to get anybody to bite. I think that tells you something.
There is even one conspiracy theory on some Dodger oriented sites that Frank is somehow funneling money to the team through his divorce lawyers with some wag joking that by the time it's all over, the divorce lawyer will own the team. Then again, maybe Frank can get it all back after he sues the law firm for legal malpractice for botching the marital agreement.