SBD/April 29, 2011/Franchises

McCourt Says Dodgers Headed Toward Financial Peril Because Of MLB

McCourt has been working with Fox since November on a new TV deal
Dodgers Owner Frank McCourt on Thursday said that the team is "heading for a cash crisis," according to Matthew Futterman of the WALL STREET JOURNAL. McCourt revealed that he "has been working since November with News Corp.'s Fox unit to raise money to solve the team's financial challenges and settle his ongoing divorce from his wife, Jamie." He said that MLB Commissioner Bud Selig "has stymied the effort by withholding approval of four proposed deals, two of which were large loans." Sources indicated that McCourt's latest effort, presented Wednesday, is a "media-rights deal worth about $3 billion and includes a 35% stake" for McCourt in Prime Ticket, Fox's L.A.-area RSN. The deal with Fox that McCourt proposed "would have given him $285 million immediately -- all of which Mr. McCourt pledged to invest in the Dodgers." In addition to the 35% stake in Prime Ticket, the deal "includes a 150% increase in the annual media-rights fees that Fox pays the Dodgers to broadcast the games," to more than $80M a year by '14. McCourt Thursday suggested that MLB's takeover of day-to-day control of the Dodgers is "part of a plan" by Selig to "force a sale to a preferred owner." McCourt said, "Baseball is trying to make it appear that the Dodgers are under financial duress, and it's not true. What is true is baseball is trying to put the Dodgers into financial duress." But MLB Exec VP/Labor Relations & HR Rob Manfred said, "No one has ever suggested to Mr. McCourt we want a different owner. ... The commissioner wants to complete his financial investigation of the club before he deals with any transactions" (WALL STREET JOURNAL, 4/29).

PUTTING UP THE STOP SIGN: In L.A., Bill Shaikin cites sources as saying that one reason Selig has not approved the Fox contract is that Jamie McCourt "has not approved the deal." A source indicated that Jamie, in correspondence with Selig's office, "asserted her right to a say in the Dodgers' television deals by virtue of her half-ownership of the team." Sources noted that Selig "also has objections to the agreement beyond Jamie McCourt's claim." Shaikin notes if Jamie "believes the transaction could devalue the Dodgers -- perhaps by foreclosing the launch of a cable channel solely owned by the Dodgers -- she could object to the court." Meanwhile, Frank on Thursday "continued to press for a meeting with Selig to discuss what McCourt believes is effectively a hostile takeover of the Dodgers." Also, newly appointed Dodgers monitor Tom Schieffer "made his first appearance at Dodger Stadium," revealing that he "spoke with McCourt by telephone Thursday and expects to meet with him Friday." Schieffer said that he "appreciated that McCourt had instructed the Dodgers' staff to be receptive to him." Schieffer said that his "work overseeing the Dodgers' business operations and Selig's investigation into the team's finances should not preclude McCourt's playing a meaningful role. Schieffer: "He is certainly welcome to express his opinions. He is still the owner of the ballclub. We haven't seized anything. We're here to help" (L.A. TIMES, 4/29). Schieffer on Thursday also stressed that he "would not make decisions on who would play and where," and that GM Ned Colletti "would perform his duties without interference." But Schieffer also acknowledged that if Colletti "wanted to exceed the budget to pursue a player needed for a pennant drive, that move would require his approval." Schieffer said his main duties will be to monitor and investigate the financial situation and "try to figure out what the problem is" (LATIMES.com, 4/28).

WHAT'S ON TV? Former MLB Commissioner Fay Vincent said that the proposed agreement with Fox, "far from being McCourt's vehicle back into baseball's good graces, exacerbates a distrust of him because he could take most of the money and leave only a small percentage for working capital." Vincent added, "That is certainly his right to do, but Bud is worried that if he has to sell the team because McCourt goes under, selling the team with the TV rights stripped away is much more difficult. The team won't generate anywhere near the revenue" (USA TODAY, 4/29). In L.A., Tom Hoffarth writes Fox "appears to be the business entity that has the most to either gain or lose financially from this transaction" (L.A. DAILY NEWS, 4/29). SI.com's Jon Heyman wrote, "Fox must love the deal; it seems anxious to keep McCourt around, so anxious that it gave McCourt a basically unsecured personal loan of $30 million to keep him afloat. A lowball deal with Fox could affect other major-market teams with TV deals upcoming, which must worry MLB" (SI.com, 4/28).

LOOKING FOR ATTENTION: In L.A., T.J. Simers writes under the header, "Frank McCourt Is Suddenly The Great Communicator. Dodgers owner Frank McCourt, who hasn't said much to L.A. fans (or a certain columnist) in the last year, goes on CNBC's 'Squawk Box' and says baseball Commissioner Bud Selig won't take his call." Simers: "For the last year I have probably averaged one call a week to the Dodgers asking to chat with Frank" (L.A. TIMES, 4/29). ESPN.com's Buster Olney wrote, "Does anyone think that the ultracautious Selig -- who is responsible for initially picking McCourt to be the owner of the Dodgers -- has now recklessly targeted McCourt? No, McCourt earned this attention" (ESPN.com, 4/28).
Return to top

Related Topics:

Franchises, Los Angeles Dodgers, MLB

Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug