Wednesday, January 27, 2010

Does Frank want out of the Dodgers?

Over at NBC's Circling the Bases, journablogger Craig Calcaterra caused quite a ruckus with a blind item about the McCourts. He wrote this morning:
[T]here is buzz coming from some insiders and writers close to the Los Angeles Dodgers that, while Frank McCourt is going to go to the mat to beat his wife Jamie for ownership of the team, he wants out sooner rather than later and will look to turn around and sell within a year or two of the conclusion of the litigation.
The Dodgers were something less than pleased with Craig's post. Within a few hours, they sent Craig the following statement, which he ran at CTB:
The NBC report is completely erroneous, inaccurate and irresponsible journalism. The Dodgers are not for sale. Mr. McCourt has made it abundantly clear that he is the long-term owner of the Dodgers and he looks forward to the day when his four boys will own and operate the team.
In addition to taking umbrage to the club's reference to his craft as "journalism," Craig offered a few points to consider. His thoughts can be summed up like this: (1) No one ever said the Dodgers were for sale; and (2) Frank can't say he wants to sell the club because it might lead to an unfavorable settlement in the divorce.

Craig's right, though I think the two points can be combined: the Dodgers cannot be for sale. Not right now. As the club is a contested asset in the divorce, liquidating it would present serious problems for the court. While it's conceptually possible for the club to be sold and the proceeds held in escrow until the post-nup issue is resolved, Jamie would smartly argue that she doesn't want the money, she wants the team. 

As for the Dodgers' statement, it's mostly fluff. Frank will make it "abundantly clear that he is the long-term owner of the Dodgers" until he takes action in the opposite direction. And his eager anticipation of the day he gives his kids the keys to the Dodgers rings a little hollow. It wasn't so long ago that he used the club's "family ownership" as a way to endear he and Jamie to a Los Angeles community fed up with corporate control of the team. A few short years later, he's in court fighting against family ownership. 

The only part of the club's statement that matters is that the Dodgers are not for sale, which is true. It should be noted, though, that the Dodgers might not be for sale simply because they can't be. While I'm not convinced Frank's looking to get out as quickly as possible, the statement the club offered to refute Craig's rumor tells us nothing we didn't know already.


  1. I would glady sacrifice 1-2 years of non-competitiveness for Mark Cuban as the future owner of the Dodgers. In fact, at this point, I'm almost willing to roll the dice with anyone else. Devil you know, yada yada, but jeez, this is a cluster.

  2. Major League Baseball's Front Office won't approve Mark Cuban as a MLB team owner. Bud Selig and Bob DePuy were adamantly against Cuban's interest in buying the Cubs..

    If the Dodgers are sold, it will probably be to a group of investors, with the owner with the largest percentage. The price isn't going to be the Forbes Valuation of the team, but probably $200-250 million less, because the Forbes valuation includes market valuation, which isn't more subjective than objective cost analysis.

    The sales price may also be lower if the new owners take over some of loans that were used to buy the Dodgers in 2004. With a debt valuation probably around $430-$450 million, the McCourts are probably looking for a small profit in a sale. They are not going to get $750 million for the club. No prospective buyer is going to agree to that price when the team is making low profit margins and huge overheads.

    There isn't going to be a white knight like Eli Broad or Mark Cuban to come in and make all better. Owning a MLB baseball team is about tight profit margins.

  3. Exactly, tired of hearing about Cuban and i don't want him owning my team.

  4. The tax advantage of depreciating player salary for the first five years of ownership is now over. It is not surprising that McCourt is thinking about getting out.