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SBD/October 3, 2011/FranchisesPrint All
Key questions surrounding the Dodgers, including the ownership status of Frank McCourt and the future of the club's cable TV rights, will be addressed beginning late this month after Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware late Friday scheduled a critical four-day evidentiary hearing. Beginning Oct. 31 in Wilmington, and continuing Nov. 1, 2 and 4, Gross will hear arguments on a proposed sale of the TV rights, MLB's move to strip the franchise from McCourt, and a further league move to disqualify McCourt's current counsel in the case. As a result, McCourt's future with the team could be known by early-to-mid November. Gross ordered McCourt and MLB Commissioner Bud Selig each to testify under oath and in person at the hearing. And in his firmly worded order, the judge made it clear he will not tolerate more of the angry back-and-forth accusations that have dominated the three-month-old case. "The purpose of this order is to schedule an evidentiary hearing which will enable the Court to make its decision based upon facts rather than the harsh allegations and innuendo of the antagonists," Gross wrote. "The Court's direction for the prompt hearing will enable the court to maintain control over parties who's animus toward one another could result in unnecessary, spiraling, and excessive litigiousness which would become increasing challenging to disentangle." The judge acknowledged the huge stakes inherent to the hearing, saying "there is no middle ground" in the case.
SETBACK FOR DODGERS: Gross additionally levied a major blow against the Dodgers when he said he would not allow the club to seek discovery on the financial status of other MLB clubs. McCourt has consistently argued MLB is unfairly singling out the Dodgers, particularly noting the lack of league discipline levied against other financially troubled clubs such as the Mets. "The issue at hand is not whether the commissioner should or should not be taking actions against other owners. It is whether the Commissioner is treating [the Dodgers] and/or Mr. McCourt unfairly," Gross continued. "The Court will not turn [the Dodgers'] ills and whether the commissioner is treating [the club] and Mr. McCourt unreasonably and vindictively into a sideshow of all of MLB. The hearing is not a referendum on the Commissioner or other baseball teams. ... These cases are about the Dodgers." The timing of the hearing itself is a setback for the Dodgers, as the club had wanted these key issues heard no earlier than Dec. 12, allowing the club time to take discovery and prepare arguments. Meanwhile, McCourt's estranged wife Jamie on Friday filed an objection against the Dodgers' recent motion to establish a quick, two-stage process to sell the cable TV rights. The objection puts Jamie into the same camp with FS West and MLB opposing the bid. FS West in particular says its current rights are being trampled upon amid the new rights sale effort. And the Dodgers said Friday in a separate financial statement filed with the court that it has spent $5.79M on bankruptcy-related expenses for the three months ending Aug. 31.
STATING THEIR CASE: The Dodgers quickly followed up Gross' scheduling order this morning with a new motion arguing for a modification to allow discovery into the financial state of other MLB clubs. The motion argues Gross "overlooked facts and precedent ... that warrant modification of the scheduling order so that [the Dodgers] can obtain the discovery needed to present evidence." The motion continues, "By forbidding wholesale any such discovery, the Scheduling order unfairly impairs [the Dodgers'] ability to prove that the Commissioner has not acted in good faith. Without the benefit of appropriate benchmarks against which to measure [the Dodgers'] operations, this Court will be deprived of an important objective basis to make that assessment.” Gross will hold a hearing Wednesday on the Dodgers’ bid to modify the scheduling order and allow discovery into the business operations of other MLB teams.
The Brewers Friday announced that they are "raising ticket prices next season," with the average price increasing to $24.01, up 8.6% from this season, according to Don Walker of the MILWAUKEE JOURNAL SENTINEL. Season-ticket holders "will also see an increase of 8.6%." The hike "comes after a season in which the team froze ticket prices for season-ticket packages and single-game seats." One "interesting twist to the announcement is the decision by the Brewers to introduce a new ticket structure for single games." Under the new plan, there "will be three categories of games for those wishing to buy single game seats" -- Blue, Gold and Marquee. For the 56 Blue games, "seats will be either $1 or $2 more than this past season." A Gold game seat "will be anywhere from $1 to $6 higher than this past season." The Marquee games "will be the most expensive, but the team decided not to increase prices for those games." However, there "will be three fewer Marquee games next season." The NL Central-champion Brewers drew 3,071,373 fans to Miller Park during the regular season, a "new franchise attendance record" (JSONLINE.com, 9/30). The Brewers tested dynamic pricing system out for three games this season, and Brewers COO Rick Schlesinger said that the team "would try it out again for a few games" next season. But overall, Schlesinger is "not convinced the system works in Milwaukee." Schlesinger: "I need to be shown that it works for us. I'm learning more about it and debating it" (JSONLINE.com, 10/1).
OWNER'S BOX: In N.Y., Tyler Kepner notes when Mark Attanasio bought the Brewers in January '05, the team "had the majors’ lowest payroll, at $27.5 million, and a streak of 12 consecutive losing seasons." Attanasio said it "was possible" the team could re-sign impending free agent 1B Prince Fielder, but the team "probably cannot raise" its $85.5M payroll for '12. Attanasio "owns more than twice the percentage of any other Brewers investor and has full decision-making authority." But he "still owns less than half the team." He said that that figure is "about 38 percent." MLB Commissioner and former Brewers Owner Bud Selig said, "Mark is quiet, thoughtful -- he has a personality that really fits Milwaukee, even though he’s not from here" (N.Y. TIMES, 10/1).
Terry Francona Friday said that “he knew it was time for him leave as Red Sox manager when he couldn’t get through to his players even as the season spiraled to an ignominious close,” according to Peter Abraham of the BOSTON GLOBE. Francona said that another factor was the “uncertainty he felt over whether team ownership stood behind him.” Abraham notes Francona's departure "was a jolt" Red Sox Owner John Henry and Chair Tom Werner "didn’t expect." Francona described “a perceived lack of support from ownership.” He said, “I don’t know that I felt real comfortable. You’ve got to be all-in on this job. I voiced that today.” Red Sox President & CEO Larry Lucchino “disputed” that assertion, saying, “I was actually puzzled by that comment. We have done nothing differently this year than we have done in previous years.” Henry “did not attend the press conference, having suffered what has termed a minor injury when he fell while aboard his yacht earlier in the day.” Lucchino said that Henry’s absence “should not be interpreted as a lack of support for Francona.” Francona said earlier this week that “he had not heard from Henry during the team’s slump” (BOSTON GLOBE, 10/1). Francona said of leaving, “I think it's the right thing to do for the organization and myself.” He met with the club execs Friday to discuss “whether the team would exercise options on his contract for 2012 and 2013, worth $4.5 million per year” (BOSTON GLOBE, 10/1).
WHOSE DECISION WAS IT? In Boston, Dan Shaughnessy wrote under the header, “Ignore That Spin From The Brass -- He Was Fired.” Francona “blamed himself, worked hard to stay on message, but late in his goodbye press session, he veered off the rails and threw John Henry under the team charter.” Shaughnessy wrote ultimately it was a “disconnect between Henry and Francona that prompted this change.” He added, “Too bad Henry was not there to answer the charge” (BOSTON GLOBE, 10/1). In Boston, Steve Buckley wrote ownership Friday night said that “they wanted Francona back and asked him to take the weekend to think things over.” But if “the guy doesn’t feel they have his back, then what’s the point.” Buckley: “It’s hard to believe -- it’s preposterous, really -- that the Red Sox are kicking this guy to the curb” (BOSTON HERALD, 10/1). ESPN BOSTON’s Gordon Edes writes under the header, “Departure Makes Your Head Spin” (ESPNBOSTON.com, 9/30).
VIEW FROM THE TOP: The BOSTON GLOBE's Shaughnessy notes Henry "made it home from the hospital in time to watch a soccer match" Saturday. Shaughnessy: “Isn’t that just swell? Certainly we’re all relived that the Sox owner was not seriously injured, but yesterday morning wasn’t the time to announce that Henry made it home in time to watch his Liverpool team play Everton in the Merseyside derby. It’s not what loyal citizens of Red Sox Nation needed to hear” (BOSTON GLOBE, 10/2). In Boston, Tony Massarotti wrote, “When John Henry first bought this team, the Red Sox were [a] passion and a priority for him. … They were truly championship-driven. But in the last few years especially, the Red Sox have seemed far more interested in promoting their brand than in truly improving their baseball team." Massarotti: "Earth to John: if money is what drives you … then sell the team” (BOSTON GLOBE, 10/1). Also in Boston, Chad Finn wrote of Francona's departure, “Absolutely call it the most foolish, shortsighted baseball decision by John Henry and the increasingly tone-deaf Red Sox ownership has made during its stewardship of this franchise” (BOSTON.com, 9/30). The BOSTON GLOBE's Nick Cafardo: “It’ll be interesting to see whether the owners regret not being more proactive in picking up Francona’s option. They don’t seem to be sweating it now. But baseball people are surprised that the Sox would allow this to happen, which is why many believe there was more here than met the eye” (BOSTON GLOBE, 10/2).
WHERE WILL THEO GO? When asked if they would grant “another team permission to speak with" GM Theo Epstein, Lucchino said, “We’re not prepared to answer that question here” (BOSTON.com, 10/1). Lucchino “didn’t even want to contemplate whether Epstein might be following Francona out the door.” Lucchino: “You don’t even have a full enough plate right now; you’re going to raise another question like that?” (ESPNBOSTON.com, 9/30). A source said, “The Cubs are obviously interested in Theo and the talk is not going away. I think it’s possible” (BOSTON GLOBE, 10/2). In Boston, Scott Lauber noted Lucchino and Werner’s answers regarding Epstein “were noncommittal.” Lucchino: “Theo is under contract with us, so it is an issue that has not been addressed or discussed.” Lauber notes since Epstein “remains under contract, the Red Sox would have to grant permission for any team to speak with him” (BOSTONHERALD.com, 10/2). A source said that “it’s '50-50' the GM would leave for the right situation” (ESPNBOSTON.com, 10/2).
Tony Reagins stepped down as Angels GM on Friday in a move team President John Carpino said was a "little bit" of a surprise and Reagins “characterized as his own choice,” according to Bill Plunkett of the ORANGE COUNTY REGISTER. Reagins said, "I just felt the club needed a fresh perspective and a different direction." Angels Owner Arte Moreno did not make himself available to the media, but “his statement in the official news release seemed to indicate Reagins' resignation was not as voluntary as Reagins made it sound.” Moreno in the statement said, "Though we finished 2011 with a winning record, we remained short of our objective in winning a championship. In moving forward, we felt a change was needed" (ORANGE COUNTY REGISTER, 10/1). In L.A., Mike DiGiovanna noted the move “came one day after Reagins vowed to be ‘creative and aggressive’ in attempts to upgrade the team this winter.” Reagins was promoted to GM after the '07 season, and he “had two years left on his contract.” He said that he “had been contemplating the move for a month before informing upper management of his intentions Friday.” Carpino said that Reagins' successor “probably will come from outside the organization, an indication the jobs of longtime assistant GM Ken Forsch and special assistant Gary Sutherland are in jeopardy.” Carpino “would like to have someone in place in early November for the start of free agency” (L.A. TIMES, 10/1).
UPS & DOWNS: In L.A., Bill Dwyre wrote Reagins “was a loyal part of the organization for 20 years.” He was “on duty when the Angels traded away Mike Napoli and brought Vernon Wells on board for around $80 million.” Whether he was the “driving force in those decisions -- the current biggest aggravations for Angels fans -- is not clear and never will be.” Dwyre: “It happened on his watch and his watch needed to end to demonstrate to the people buying tickets and all those red jerseys that 2012 will not be more of the same” (L.A. TIMES, 10/1). ESPN L.A.’s Mark Saxon noted Reagins “had some successes as GM -- swinging trades for Mark Teixeira and Dan Haren among them.” Most recently, Reagins “worked out a five-year, $85 million contract extension” with P Jered Weaver. But Reagins “also had some big misses” (ESPNLA.com, 9/30).
With a $40M renovation of PNC Field "forcing them out of their ballpark in 2012, the Scranton/Wilkes-Barre Yankees will spend much of next season playing their home games in Western New York," according to Mike Harrington of the BUFFALO NEWS. In conjunction with the Triple-A Int'l League, the Yankees on Friday "announced six sites for their home games." Establishing Western New York as its home base for the year, Scranton "will play 37 games at Frontier Field in Rochester," seven at Dwyer Stadium in Batavia and six at Coca-Cola Field in Buffalo. The team also will play 10 "home" games in Syracuse, eight in Lehigh Valley and four in Pawtucket. The Yankees had "hoped to put the 72 'home' games at an independent league ballpark in Newark, N.J., but the New York Mets nixed that idea last week, citing territorial rights." Buffalo Bisons VP & GM Mike Buczkowski said that the Int'l League "is still finalizing details on how costs will be broken down for things such as umpires, hotels and baseballs that are normally provided by the 'home' team" (BUFFALO NEWS, 10/1). Rochester Red Wings GM Dan Mason said that the Scranton games in Rochester "will be run by the Wings staff, and Rochester Community Baseball will keep 100 percent of the profits." Red Wings CEO Naomi Silver said, "This is an opportunity to make some money. We'll at least break even. We wouldn't do it if we didn't feel fans would come out" (DEMOCRAT & CHRONICLE, 10/1).
Arsenal CEO Ivan Gazidis said that the EPL club's finances "are 'sound,' despite a two-thirds fall in pre-tax profit following reduced property sales and player trading losses," according to Christopher Thompson of the FINANCIAL TIMES. In its results for the year ended May 31, Arsenal Holdings reported that group revenues "were down" from US$589.7M (all figures U.S.) last year to $396.9M. That was "due to 'the expected lower level of property sales activity' and a [$22.7M] loss on player trades, although this did not include the sales" of Samir Nasri and Cesc Fabregas over the summer transfer window. Pre-tax profit fell from $86.9M to $23M. Arsenal "benefited from bumper property sales" in '10 of $243.5M -- which fell to $47M this year -- as it "sold land around its former stadium." The club said that it had cash of $248.6M and net debt of $151.8M. Arsenal's operating profit from its football business "fell from nearly" $88.5M to $71.1M as its wage bill climbed by $21.3M to $193.1M, while broadcasting and commercial income "remained nearly flat." The club's wage bill "accounts for 55 per cent of its football revenues, up from 50 per cent the previous year" (FINANCIAL TIMES, 10/1). In London, Jim van Wijk noted Arsenal's Emirates Stadium "continues to more than pay its way as continued improved matchday income helped to reduce the group's overall debt, down" from $210.5M to $151.8M, much of which is "secured on low, fixed-interest rate bonds paid back over a long period against the cost of relocation in 2006." Gazidis said, "We didn't have the same kind of profit from player sales that we had in the previous season and that explains the slight reduction in profit, but this is a very solid, very healthy set of results and it gives us a good platform to move forward from." Gazidis "feels the Arsenal brand will continue to develop as the north London club look to keep pace with the likes of Manchester United in terms of sponsorship deals" (London INDEPENDENT, 10/1). But the BBC's David Bond noted, "Many fans fear that soon the financial gap with the rest of the top teams in the Premier League will soon be too big to close" (BBC.co.uk, 9/30).
ALL IN THE FAMILY: In London, Jeremy Wilson noted both the Nuggets and Avalanche will be "passed to" Josh Kroenke from his father Stan Kroenke, but Josh also is "attracted to the idea of eventually becoming involved" in Arsenal. Josh Kroenke "repeatedly praises the Arsenal executives and stresses his focus on the job in Denver." But he said of having a role with the EPL club, "That would be great. I don't pretend to possess the knowledge base that the people over there who are running it do but, from a business stand-point in sports, it's all similar yet different. I love London. I would love to be involved at some level but I have to understand what I am doing on the most intricate levels before I get involved in something like that." He continued, "My dad's philosophy is to hire the people you think will do the best job and let them do their job. I've had a few conversations with Ivan. He is very smart. It's fascinating to learn about and I'm sure at some point I'll be itching to get involved. I just can't say how yet. For the time being I'm really happy with where I am." Kroenke Sports & Entertainment President & CEO Jim Martin said soccer is "already there as a global product. Stan thinks globally. It's a huge opportunity in Mr Kroenke's mind, far beyond what we could ever achieve with the teams here. I'm an NFL fan, I love (American) football and think it is the greatest game around. We think of that as the pinnacle. Well, internationally, it's not. It's football but it's not our football. It's soccer. It (Arsenal) is an opportunity that is beyond the rest of the organisation, at least at this stage." Josh Kroenke added, "I know my dad has a certain vision. He's in it for the long haul in everything he does, from his wineries to real estate to his sports investments. He is a competitive person. ... He wants to win and that won't be any different at Arsenal" (London TELEGRAPH, 10/1).
St. Petersburg Mayor Bill Foster said that he “planned to actively work with the Rays in the postseason to boost attendance, and he was unaware of any development group working on an alternative stadium site in St. Petersburg.” Foster: "My interest is representing the 250,000 people that are continuing to foot the bill on the stadium. Their interest will be represented by the city. My angst is keeping them in St. Petersburg" (ST. PETERSBURG TIMES, 10/2).
MONEY MAKER: Manchester United Commercial Dir Richard Arnold said that the money the EPL club “can make from exploiting its fan base will ‘dwarf’ the income it has been acquiring from sponsorship deals.” The economic climate is forcing club Owner the Glazer family “to delay a planned initial public offering of about a third of the club’s equity on the Singapore stock exchange.” But when it does go to market, ManU’s commercial potential “is bound to be a key part of its sales pitch.” Meanwhile, team officials in recent weeks have “closed the latest of several deals with credit card companies that will enable United to earn income directly from their fans around the world.” Arnold said the club had not yet taken its fan base “and put that into a money-making machine” (FINANCIAL TIMES, 10/1).
FEELING A TREMBLE? MLS San Jose Earthquakes GM of Soccer Operations John Doyle said that the team is “prepared to spend big in the offseason to help rebound from a dismal 2011 campaign.” In San Jose, Elliott Almond noted the initiative to “improve on-field results coincides with the team's push to build a $60 million, soccer-specific stadium across from Mineta San Jose International Airport.” The “slim chance” of the club earning a playoff berth next season “has led management to ask ownership to open its pocketbooks for the first time since San Jose re-entered the league as an expansion team in 2008” (SAN JOSE MERCURY NEWS, 10/1).