Monday, November 2, 2009

Instant replay.

I re-read that last post a couple times and remain very unhappy with how it turned out. Unlike the umpires tonight, I have the opportunity to revisit what went down and decide how to move forward. I'm going to leave the old post there, because I know a few of you want the details. The important part, though is this:

Based on a close look at the McCourts' financial position and the financing mechanisms which allowed them to purchase the Dodgers, I have concluded that the McCourts are not worth close to the $1.2 billion suggested by Jamie in her application for divorce. The Dodgers, as an asset, might be worth $800 million, but given the most recent information available, 58% of the asset's worth is tied up in debt.

With respect to the $400 million Jamie lists in "other assets" of the marriage, I do not believe that figure to reflect net worth. For instance, although the couple owns residential assets worth (at the time of purchase) approximately $123 million, those combined residences secure $60 million of debt. I assume that "other assets" includes various business ventures of the couple, many or all of which are encumbered to a similar degree as the Dodgers and the residences.

Therefore, it is my conclusion that should the Dodgers be regarded as a community asset, each of the McCourts stands to emerge from the divorce with a net worth of something like $225-$300 million, not quite the $800 million Jamie's filing might lead you to believe. If this is indeed the case, it would be extremely difficult for one person to buy out the other's interest in the Dodgers without leveraging the purchase to a considerable degree. If the two decide (or are told) to sell the team to a third party, expect the purchase to be at a discount, damaging their takes even further.

If the asset-transfer agreement (or post-nup) is upheld, Frank wins big time. He would walk out with something like $450-$500 million in net worth, compared to Jamie's $100-$150 million. Her demands for a healthy support package should surprise no one, as she stands to lose the most given unfavorable judicial treatment.

The bottom line, and the most important thing for Dodger fans to understand, is that the Dodgers--as an organization--are in a really rough spot here. If Frank wins the post-nup battle, the Dodgers are stuck with an owner the fans no longer trust. If Jamie wins on the post-nup and one party buys out the other, the organization is back in the hands of a leveraged owner with potentially limited resources. And, of course, the fans no longer respect either McCourt. Finally, if the Dodgers are sold to a third party, the fans will have to endure their third ownership change in a little more than a decade.

From 1954 to 1996, the Dodgers were owned by one family and employed two managers. By the opening of spring training in 2011, the Dodgers might have been owned by four groups and helmed by seven skippers in the last 15 years. As a business-minded kind of guy, I am terrified at what that frequent turnover and instability means from an organizational standpoint. As a fan, I must admit to feeling a loss of connection to the club I grew up cheering because of the blurry, disjointed facsimile I see today.


  1. Excellent job. I enjoy this blog very much. Keep up the good work!

  2. Qualitatively, thank you. The exposition is simple and accessible form.

  3. Thank you very much)) Just yesterday, just thinking about it all, thank you for sharing your own experience!