Sunday, February 14, 2010

A handy refresher.

If you haven't tracked the situation here from the start, Yahoo! Sports' Tim Brown wrote a lengthy, detailed summary of the McCourt drama. There's not a ton of new information, but for some puffery from Jamie's attorney, Bert Fields. Brown quotes Fields: 
Unlike Jamie, I don’t think Frank is willing to spend what Jamie will to keep them competitive. You might ask him how much money he took out of the organization last year. You might be surprised. Rather than spend it on pitching. 
It should be noted there's nothing wrong with Frank drawing income. While Dodger fans might prefer he put some of his $6 million distribution into the team, that's not required. We can discuss the merits of how Frank uses his own money, but there's no concrete support for an inference that Frank is doing anything improper or illegal.

Yahoo!'s Brown also notes: 
Jamie’s lawyers suggest she was coerced into signing the contract and claim she is co-owner of the Dodgers. Courts overturn such agreements, Fields said, “all the time.”
Frank says the contract is “very clear, simple, straightforward and binding,” and that his estranged wife has no legal claim to the ballclub.
Fields is a character; it doesn't take a great deal of savvy to see through his rhetoric here. He might as well have said courts reverse "many" contracts, or do so "with some frequency." "All the time" means nothing. As we've discussed, I believe Frank is in a very good position with respect to the post-nup, unless he was hiding assets or somehow acting in bad faith. And Jamie would still have to convince the court to look past her legal expertise.
Further down in the piece:
Not only has Fields accused Frank of taking money “out of the organization,” but Jamie’s lead attorney, Dennis Wasser, in mid-December told the court, “Mr. McCourt is not spending all of his income on his family and on the team.”
Frank is not obligated to spend all his income on his family and the team. Aside from vague implications of financial chicanery, there's nothing at all to these quotes, either.
Brown also discusses the Dodgers' immediate liquidity:
Few, if any, believe Frank will be unable to pay his bills in the short term. By now, renewals on season tickets have arrived, and before the large bills start coming due – in spring training – so does the early broadcasting and advertising money, according to other owners. The first player paychecks go out in mid-April. The large majority of players are paid April through September, semi-monthly. By then, the ballpark (and the parking lot) is up and running. The Dodgers, unlike the Rangers and Padres, are equipped to survive a lean time.
These are important points. While the long-term viability of McCourt ownership is very much in doubt, it's highly unlikely the Dodgers are effectively insolvent. 
Fields is by far the most interesting player in this tragicomedy. Brown continues:
The Dodgers will be seven weeks into their season when a judge considers ownership of the team. If the judge honors the marital agreement, Frank would continue as sole owner. If he finds for Jamie, Fields said, she would expect Frank to sell. To her.
“The most desirable way would be that Frank sells his half to Jamie for a substantial amount of money, because the Dodgers are worth a substantial amount of money,” Fields said. “She has a widespread group of owners with a vast amount of money to put up.
In the event Jamie was awarded half the club under community property laws and if Frank did indeed choose to sell to her, Jamie and her partners would be subject to the controlling interests process with MLB. She would have to be approved by other owners, and her net worth – as the controlling party – would be a factor.
Fields is, as I suppose he should be, extraordinarily optimistic. Even if Commissioner Gordon finds for Jamie, striking the post-nup, I have to believe Frank would fight to the death to keep ownership out of Jamie's hands. And it wouldn't be a tough fight; he could argue (quite persuasively) that if he was struggling to support the franchise when he could borrow money on the value of the whole franchise, how could Jamie make it work with little more than half the resources?
As Brown discusses, the ownership approval process would be a beast for Jamie to get through. As publicly embarrassing as this situation has been, selling herself to baseball's other owners seems like a long shot. If she somehow prevails on the post-nup, I would be shocked if Frank allowed her to own the team. While that might be the only way to set his children up as future owners, I cannot see Frank swallowing the bitter pill that would be Jamie McCourt ownership.
All in all, Brown's piece is a great reason to jump back into discussion about the divorce. Nothing has changed fundamentally since the last time we dove into the topic, but as the season draws closer, so does the litigation. Selfishly, I hope Fields ascends to prominence. He's quite entertaining, in the Scott Boras kind of way. He's certainly a zealous advocate.

1 comment:

  1. Nice bit of Dodger PR. I can almost smell the ink from Josh Rawitch's pen.