SBD/May 9, 2011/Franchises

McCourt Could Lay Claim To Dodger Stadium Even If He Sells The Team

McCourt split Dodgers, Dodger Stadium among separate companies
Since buying the Dodgers, Dodger Stadium and the surrounding parking lots in '04, Frank McCourt has "divided those assets among separate companies, providing the embattled Dodgers owner with a possible claim to the stadium and the land even if he loses the team," according to Bill Shaikin of the L.A. TIMES. If MLB forces McCourt to sell the Dodgers, he theoretically "could sell the Dodgers, then make more money from renting the stadium to the new owner, taking a cut of parking revenue and reaping the benefits of future development within the parking lots." However, McCourt "would not be able to implement any such plan without overcoming opposition" from MLB and from his ex-wife, Jamie. The MLB constitution authorizes Commissioner Bud Selig to take over a team and its stadium, as well as "any other property," but Shaikin noted it "makes no specific mention of parking areas or undeveloped land." McCourt would not comment on the possibility that he could "keep the land even if the team is sold, with MLB having no say," but he did stress that the league "approved the separation of assets in conjunction with his purchase of the Dodgers." Still, unless the divorce court "agrees with Frank McCourt, Jamie McCourt would have to agree to sell the team but keep the land," and the sale price "would be significantly lower if the land were not included in the purchase." If MLB "seizes the Dodgers from McCourt and puts them up for sale, the league would be obligated to try to get the best price possible." Yet a sports investment banker indicated that "maximum value would be difficult to obtain if McCourt did not include the stadium and/or the land in the sale." The banker said, "It's going to be a problem for baseball" (L.A. TIMES, 5/8).

EVERYONE AGAINST FRANK: Two sources indicated that the Dodgers' situation "is not on the agenda" for this week's MLB owners meeting in N.Y., and "no action is expected with regard to the team." The L.A. TIMES' Shaikin noted if the Dodgers fail to meet payroll at the end of this month, reported to be a possibility, MLB "would pay the salaries, with McCourt almost certainly asked to sell the team." If he "were to refuse, the league constitution specifically provides for 'involuntary termination' of the franchise if the owner fails to repay any debts to the league within 30 days." Any "involuntary termination requires a three-fourths vote of the owners." None of the "other 29 owners has spoken out publicly in support of McCourt, and one said Selig has all the votes should he recommend the Dodgers' franchise be terminated." The owner said, "The vote would be 29-0" (L.A. TIMES, 5/7). In Boston, Nick Cafardo wrote, "Still wondering whether Larry Lucchino emerges as a front-runner to buy the Dodgers" (BOSTON GLOBE, 5/8). In N.Y., Bob Raissman named McCourt the "Dweeb Of The Week" for "continually spinning his self-imposed Dodgers debt to the consternation of MLB and Dodgers fans." McCourt's media appearances are "getting very tired very fast." Raissman: "McCourt's best course of action would be to turn this into a comedy tour, then, maybe, more people would pay attention to him. Until that happens, he might be better served by laying low and shutting up" (N.Y. DAILY NEWS, 5/8).

STUCK IN THE MIDDLE WITH YOU: ESPN L.A.'s Ross Newhan wrote under the header, "Bud Selig Due Some Blame For Mess." The MLB commissioner "shares a responsibility in the demise of the Dodgers under the McCourts." Selig's support of the McCourts' "highly leveraged purchase of the Dodgers for $430 million from Rupert Murdoch's media giant News Corp. came as a shock." But given Murdoch's "financial tentacles into baseball at a time when other networks were dropping out of baseball coverage, Selig ignored some red flags and approved the deal." Still, Selig has "taken the right step after taking the wrong one in 2004" (ESPNLA.com, 5/6). In N.Y., Mike Vaccaro noted the Mets and Dodgers played a three-game series at Citi Field this weekend, five years removed from being the "class of the National League." Vaccaro: "It is good that Bud Selig has started to try to fix the Dodgers (even if he deserves to take a hit for allowing the McCourts in the henhouse in the first place), and it’s admirable that he’s sticking by old friend Fred Wilpon, but the fact that these two flagship franchises have been allowed to wither to where they are is disgraceful" (N.Y. POST, 5/8). In N.Y., William Rhoden wrote there is "no question that Selig has shown Wilpon, a longtime ally, as much consideration as possible while appearing to aggressively go after McCourt." But Rhoden added, "Their overall situations sure look pretty similar to me. ... Everyone’s legacy is in jeopardy here." What MLB "needs from Selig is wisdom and evenhandedness." In the end, the commissioner "should probably let them both stay or kick them both out" (N.Y. TIMES, 5/7).

RED FLAGS ALREADY? In N.Y., Richard Sandomir profiled SAC Capital Advisors Founder Steve Cohen, a prospective Mets bidder whose profits from his hedge fund "have been consistently lucrative and whose trading records are now being examined as part of a discovery request by federal prosecutors in an insider-trading investigation." Cohen has been "accused of nothing improper, and has asserted publicly and vigorously that he has no cause to worry about ever being charged with wrongdoing." But he "would make for an intriguing and perhaps challenging addition to the ranks of Major League Baseball owners." Bidding for a minority stake in the Mets "appears to be down to three, at most," and two sources indicated that Cohen "could be the front-runner" (N.Y. TIMES, 5/7).
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