It’s every Dodger fan’s worst nightmare, even if they haven’t quite considered the possibility yet: what if Frank McCourt was running a long con in order to attempt to keep the team?
When he finally agreed to sell on November 1, we were ecstatic, understandably. If it didn’t quite add up that a career litigator would so abruptly abandon his fight just weeks before his day in court, after years of insisting he’d never sell, we didn’t notice – we were too busy dreaming about white knights who might be interested in purchasing the team.
Yet despite our joy, it’s becoming hard not to notice the inconsistencies in all this that have been piling up over the last few weeks. Despite agreeing with MLB to sell nearly six weeks ago, the filing didn’t make it to bankruptcy court until December 6. We didn’t get concerned, because surely a transaction involving a billion-dollar team could be complicated, and, hey look over there, is that Ned Colletti handing his secretary a backloaded two-year deal? Then, despite giving up all of his Los Angeles-area homes to ex-wife Jamie in their settlement, Frank claimed he had no intention of leaving Los Angeles and actually attended the annual owner’s meetings in Milwaukee, a move that raised eyebrows considering there had to be more than a few people there disgusted at what he’s put the sport through. Besides, even though he had agreed to sell the team, he still had something of an in – the right to keep the parking lots that surround the stadium, thanks to one of his many shady restructurings of the organization.
At the time, Mike DiGiovanna of the LA Times briefly asked why McCourt was choosing to sell:
But after a bruising two-year battle to keep the Dodgers, why not wait a few more weeks to see if he won in court?
“I had personal reasons to make the decision that I’m not at liberty to share at this time,” McCourt said.
As November continued, the story largely shifted to the legal battle between FOX and the Dodgers, as McCourt attempted to persuade the court to allow him to market the club’s television rights immediately, despite the FOX contract clearly stating those rights were exclusive until the end of the 2012 season. McCourt argued that getting a current valuation of those rights would allow for higher bids of the team than if the prospective buyers were uncertain what their worth would be; playing on the bankruptcy court’s sympathy towards making sure creditors get repaid above all other concerns, the court agreed over FOX’s obvious objections. The ruling seemed dubious at best, since even if McCourt was able to secure a higher bid for future television rights, any new owner would not be obligated to abide by that deal, and could simply re-open the bidding again. This is the part that’s most troubling, because it’s not hard to think that media rights could be worth more a year from now, when the team might have a new owner and a whole hell of a lot more positive press than it does right now.
With the ruling in hand, McCourt can proceed in soliciting rights bids while simultaneously working to sell the team… except with purchase bids due by January 13, buyers have reportedly still not seen the “bid book”, a confidential document outlining the Dodger financial state, despite a December 1 report that said the book would go out “next week”. (i.e., last week.)
This all caught the eye of local legend Ross Newhan, now blogging independently, in a December 2 post I linked to last week:
”This has been going on more than a month and no one has seen a book, including the top league officials who, I presume, would have to approve it,” one of the sources said. “It makes you wonder.”
What he and others are wondering would provide Oliver Stone with a conspiracy script that would shock Dodger fans.
The question he and othes are asking is this:
“Does McCourt really intend to sell or is he still seeking a way to retain ownership?”
Though Newhan admits the idea is far-fetched, he lays out the path that McCourt could take if this was his goal, and wouldn’t you know it, the first item is “get permission to sell media rights,” a week before that decision occurred.
Fred Roggin of NBC Los Angeles picked up on the scent yesterday (h/t to Philip for the link), and though his piece was laughably titled “exclusive” (presumably by a headline writer who has never heard of Ross Newhan), he backs up the story that buyers are unsure of where this process is taking them:
I’ve talked with a number of prospective buyers who are all perplexed because they don’t have the book with the Dodger financial information.
Here’s the best part, however. Newhan posted his story on December 2, and Roggin chimed in yesterday, December 13. About a month ago, on November 13, I received an email that I admittedly didn’t think much of at the time. (Yes, it’s largely because half of it was written in caps, and I’m a snob like that.) It’s from a reader who will remain anonymous, in response to Bill Shaikin’s story about McCourt attempting to convince the court to let him sell the media rights, and he may have been the only one to see all of this from the very beginning:
WHAT MCCOURT IS TRYING TO GET AWAY WITH: He is still trying to sell the tv rights (may the judge save us by refusing to order another corporation, Fox, to give up their negotiated privilege not to do so under duress) so when, according to McCourt’s scheme, the tv deal is negotiated by Blackstone (McCourt) sometime this winter, McCOURT CAN HALT THE SALE OF THE TEAM, WITH THE AGREEMENT IN HAND TO RECEIVE THE FUNDS TO PAY OFF THE CREDITORS, GET THE DODGERS OUT OF BANKRUPTCY AND KEEP THE TEAM. THAT’S WHAT HE’S TRYING TO PULL HERE, BILL, and no journalist, let alone the braindead octogenarians running MLB, gets that.
What does Fox get out of it? A deal with McCourt, a cheap deal for them, not the blockbuster the next owner would realize from HIS negotiated sale of the rights when the bidding is open to Time-Warner after next November. Fox is currently the only entity ostensibly refusing to go along with McCourt’s request—if they DID agree, it would be OBVIOUS there’s something big in it for them, a MUCH smaller rights fee to pay—so they’re pretending to fight it. When the judge is ready in 2 1/2 weeks to hear their reasons for going against a sale of the tv rights now, all they have to do is show up in court and announce they’re throwing in the towel on the “fight”. Since MLB has already monumentally stupidly agreed to let McCourt have his tv rights sale now, as quid pro quo for agreeing to sell the Dodgers, there will be no one to object to giving McCourt the tv sale now, and the rest of the plan McCourt and Fox have hatched will extend Fox’s telecasts of the Dodgers forever at a bargain rate, and McCourt will keep the Dodgers as a result.
I won’t pretend there’s not a bit of “tin foil hat” going on in there, because clearly this entire conversation is one big conspiracy theory that might be way, way off base. Still, there’s enough smoke there to not dismiss this outright. MLB did agree not to oppose the sale of the broadcast rights, as they otherwise would have, in order to finally get McCourt to agree to sell. And FOX and Time Warner, who have had rights fees wars for years across the country, are, by all indications, gearing up for a massive war over Southern California sports telecasts.
While allowing the two corporate giants to fight over the Dodgers would surely increase the ultimate payoff, if McCourt’s goal is simply to get enough to cover his debts, pay off his ex-wife, and get the team out of bankruptcy, then perhaps he’s less interested in “every last penny” as he would be in “as much as I can get, as soon as I can get” – and not only are the Dodgers and FOX supposedly still negotiating despite the court ruling, McCourt tried something similar in the past, attempting to sell the future rights to FOX for what was considered below market value in order to see an immediate influx. In addition, it’s not like he hasn’t previously been in bed with FOX on prior loans anyway. Besides, if the latest reports are true which indicate that the Dodgers are contractually restricted from creating a new regional network with Time Warner, ESPN, or Comcast are true – i.e., all the big players who aren’t FOX – then that’s just a further incentive to stick with FOX. (That’s a battle which has yet to play out in court, though.)
But it doesn’t have to be FOX. That might be the ultimate goal of getting the court to open up the bidding, to show FOX that even if McCourt would prefer to stick with them, he’s no longer obligated to. Otherwise, FOX would just wait out the ownership transfer and still likely have time to speak exclusively with the new boss before their rights deal expired. Now, they have motivation to strike a deal before the rights get shopped around. So as the theory goes, McCourt could come to an agreement with FOX or someone else on a long-term rights deal, one that would be a step up from what the Dodgers currently get yet still likely below what the results of an all-out bidding war could be, and all of a sudden McCourt could go back to the bankruptcy court and say, “my house is in order, I have the money to pay off my ex-wife, all of my creditors, and operate the team. Throw out the agreement with MLB.”
And that’s what the big, big sticking point in all this is. McCourt has that agreement with Major League Baseball, and another with his ex-wife. By April 30, he has to both sell the team and pay Jamie about $130 million. Even if there’s a hint of truth to any of this, MLB still has the right to approve the new television contract, and it goes without saying that they would never, ever allow McCourt to sign such a deal and collect even a penny of the new earnings. This would set up yet another massive court fight, one bigger than any we’ve seen thus far, and while it may seem unlikely that McCourt and his legal team could convince the court to throw out the agreement with MLB, no one thought he’d be able to convince them to open up the television rights either – the last few legal arguments have all gone Frank’s way.
If this whole idea wasn’t so deliciously evil – and I’m talking head-thrown-back, maniacal-cackling, lighting-a-cigar-with-a-game-worn-Jackie-Robinson-uniform evil – it’d be brilliant. Now, as I’ve been reminded of by a reader lately (and quite correctly so), I am not a lawyer. I’m far more comfortable discussing wOBAs than CPAs, and when I started this blog over four years ago I never dreamed this would be the sort of thing we’d be spending our time on, so it’s eminently possible that I’m not reading the tea leaves correctly on all this.
So maybe this is much ado about nothing. Maybe I spent my Wednesday morning linking to a dozen Bill Shaikin articles simply because of a crazy, alien-abduction-sounding theory, because I have to admit, this whole thing sounds ludicrous enough that part of me is reluctant to even hit ‘publish’ on the post.
But maybe, just maybe, Frank McCourt is a slimy, court-manipulating evil genius who’ll stop at nothing to get what he wants and attempt to rebuild his name. I just don’t want to say we never saw it coming, and there’s been enough oddities since the deal was announced to wonder just what’s really going on.