It was about time for some new divorce news, though I didn't expect the newest developments to be this explosive. Let's start with the Wall Street Journal's John Emshwiller:
In Thursday's court filing, Ms. McCourt said that her husband's personal financial statement as of Sept. 30, 2008 showed his net worth at $834.9 million. However, a follow-up personal financial statement showed that as of last June 30, Mr. McCourt's net worth had dropped to $163.4 million. Ms. McCourt's filing contends that the second financial statement was prepared after the couple separated and its results were "fabricated" through "blatant balance sheet manipulations" to show a much lower level of wealth. Ms. McCourt's filing contended that the "net equity value" of the assets of Mr. McCourt's enterprises was in excess of $2 billion.
The Times' ever-handy Bill Shaikin offers Jamie's resulting demands:
In filing for divorce in October, Jamie McCourt asked for $488,000 per month in temporary support. The revised request -- for $988,845 per month -- reflects property-tax bills as well as additional records that her lawyers claim can show the couple averaged $2.3 million per month in salaries, distributions and perks starting in 2004, when the McCourts bought the Dodgers.
Frank McCourt still would have $1.3 million per month to maintain his lifestyle, her lawyers wrote.
"Jamie fully recognizes that the . . . award which she will be seeking will be viewed by many people as being astronomical," according to the filing. "That may very well be the case. But Jamie's request also has been thoroughly documented . . . as being wholly consistent with the parties' marital lifestyle."
As we've discussed, Jamie's legal position demands that she go after every available dollar. Greedy? Yes. Justifiable? Absolutely. Back to Emshwiller for a moment:
Ms. McCourt's attorneys included in their filings a private placement memorandum, dated May 2009, where Mr. McCourt appears to be proposing to sell a share in the Dodgers as part of the creation of a global sports enterprise. The memorandum said that an entity---Global Sports Partnership LLC, to be run by Mr. McCourt's operation---would own the Dodgers and professional soccer teams in England and China.
And let's close for the night with Shaikin, on perhaps the most important Dodgers news, which concerns more local revenue streams:
The Dodgers intend to launch cable channels in English and Spanish in 2014, after the expiration of their contract with FSN, with annual profit projections of at least $150 million, according to documents in the filing. Alternatively, the Dodgers estimate they also could sign a five-year extension with FSN for $300 million, according to the deposition of a club executive. The Dodgers remain interested in building an NFL stadium adjacent to Dodger Stadium, and in persuading City Hall to lift zoning restrictions and allow "over a million square feet of mixed-use developments" in the stadium parking area, according to the filing.
Both pieces discuss how much the McCourts were taking out of the Dodgers (approximately $2.3 million each month) and the financial maneuvers required to do so tax-free. Needless to say, there's a ton to discuss about these most recent filings, and we'll get there tomorrow.
Hey, it's tomorrow! Some quick thoughts:
Hey, it's tomorrow! Some quick thoughts:
- If you're Jamie, aren't you at least a little bit wary of waving your arms in the air and declaring you haven't paid taxes in the last several years? I mean, if her strategy is "it's my stuff too," that would seem to carry over to IRS problems. It could all be kosher, but there's also the public relations side of things. As commenter Mike suggests, it's tough to ask for support from a community you extract millions from without personally paying a dime. Especially in California right now.
- Emshwiller's article in the WSJ notes that Frank (and Jamie?) have racked up $390 million of debt seemingly secured by ticket sales. This looks, to me, like the mystery debt service piece, and could go a long way to explaining why those season ticket renewals matter so much. I haven't seen the instrument, but it could well be a "floating" line of credit, so the availability of loan proceeds depends on ticket sales. As renewals go up, so does the borrowing base of the credit facility. Layman's terms: your ticket dollars might flow through to a financier; Frank might have already been paid for your future ticket purchases. This piece is something I want to know much more about.
- Shaikin provides a description of "how Frank McCourt hopes to transform the Dodgers from a baseball team into the anchor of a sports business empire." Emshwiller has a 7% share in that business empire costing $150 million. That puts the value of the whole venture at about $2.1 billion. This strikes me as pie-in-the-sky talk, for now. But interesting, nonetheless.
Lastly, and this is important: remember that all of this comes from Jamie's filings. Frank's will probably be equally (but oppositely) outlandish, and the truth likely resides somewhere in the middle. Jamie's legal team's job hasn't changed: live on the border of reasonableness. The spousal support issue is one that might very well be settled between the parties. It's in their best interests to make seemingly-outrageous claims at this stage. That's not to say we can't learn a great deal from this part of the process. But it's just that: a waypoint on the journey.