Wednesday, February 17, 2010

Let me take you back...

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...to November 5, 2003. Eric Gagne was nine days from winning a Cy Young in recognition of a transcendent season. And Frank McCourt was knee-deep in his bid to purchase the Los Angeles Dodgers. The Los Angeles Times ran a thorough piece by Thomas R. Mulligan and Roger Vincent titled, "Dodgers Buyer Covering All the Bases." A recurring moitf the article is Frank's relationship with the communities playing host to his business ventures. Let's jump right in--I don't know how to link this article in a publicly-available way, so this will have to do for now.


[T]hose familiar with the 49-year-old's track record say that, whatever his ultimate plans, he is bound to let them unfold slowly. That, they say, is because McCourt has learned from experience the importance of handling major undertakings in person and building community support before taking potentially controversial steps.
[...]

McCourt is sending another clear signal by moving to Los Angeles. McCourt and his wife and business partner, Jamie, are house-hunting and scouting schools for the younger two of their four sons, Casey, 17, and Gavin, 13.
McCourt, according to people close to him, plans to open a West Coast office of McCourt Co., his Boston-based development firm. To that end, he dispatched his older sons, Drew, 22, and Travis, 20, to the Southland over the summer to gather information on the regional economy.

[...]

The rap against McCourt from some hometown critics is that he has repeatedly announced big plans for his South Boston land but has done little more than operate commuter parking lots on it.
Douglas Lemle, owner of the Barking Crab, a waterfront restaurant adjacent to McCourt's property, calls McCourt "a gremmie," a term from Lemle's youth on the beach in Honolulu.
"A gremmie's a guy who sticks his board in the sand and waits for the big one and never surfs," Lemle said.
There's bad blood between the two dating from a 1997 incident when McCourt began towing unauthorized cars of Barking Crab customers from one of his lots. Lemle retaliated by posting a sign directing complaints to McCourt's home phone, resulting in a barrage of angry late-night calls.

[...]

Despite sparring with popular Mayor Tom Menino, McCourt has cultivated a strong political and community network around Boston. Away from home, however, his magic touch sometimes has deserted him.
In his wife's hometown of Baltimore, McCourt refurbished a large building in the trendy Inner Harbor, opening several restaurants and nightclubs to great local fanfare in 1989. But the place closed nine months later amid friction between McCourt and the entertainment firm he had hired to operate the facility.
McCourt and his investors took a $30-million bath. The lesson he apparently took from the debacle was never again try to run a business by long distance.
A few years earlier, McCourt had secured a large waterfront parcel in South Portland, Maine, announcing ambitious plans for office and retail development, condominiums, a marina and parkland. Ultimately, faced with grass-roots opposition and a slowing economy, all he finished were the condos and marina, letting options on the rest of the land expire at a loss.
Former South Portland town manager Jerre Bryant believes that McCourt failed to adequately win community support. He never could shake the tag of a big shot from Boston with no feel for local concerns, Bryant said.
McCourt did better advance work for his unsuccessful 2001 bid for the Boston Red Sox. His bid was contingent on moving the team from venerable Fenway Park to a new stadium he would build on his South Boston site.
Support was hardly unanimous in insular "Southie," but McCourt won praise for showing up at neighborhood hearings and otherwise touching all the political and community bases.

McCourt is already well into his Los Angeles networking.
Well, here we are in the Winter of 2010. The Dodgers are reportedly talking about bringing Gagne back on a spring training flyer. And Jon Weisman recently offered what ought to be regarded as the defining evaluation of Frank McCourt in Los Angeles' eyes:

It’s not an act. He’s not just saying the right thing to say the right thing. Every so often, in fact, he says the wrong thing – something that raises more questions about him than answers – because his belief in his good intentions is so strong that he doesn’t always seem to realize when his words leave him open to second-guessing. 
He wants the support of Dodger fans, in part because the support obviously will do him good, but also in part because he believes he’s earned it. He understands that fan dissatisfaction is part of the game any time you're not celebrating a World Series title. He understands that he’s a target, though he doesn't seem to accept all the reasons the red dot on his back has grown into the size of the flag of Japan. He even understands, though he's not one to talk much about them, that he makes mistakes. But he believes he will be vindicated in the end, and he is not planning for that end to be this year, courtroom or not. 

From my vantage point, it sure seems like Frank McCourt expected the Dodgers to be like the rest of his business ventures. Building community support would be key, but, when it all comes down to it, might would make right. So he made a big show of moving to Los Angeles, hobnobbing with the local heavy hitters, establishing a presence, and hammering home the concept of family ownership--he so badly wanted fans to connect to him.


And in the end, might could have made right. Armed with cash and enough political capital to make do, who knows what Frank could have accomplished. Might the Dodgers be playing down the street from Staples Center? Might Chavez Ravine be home to the hottest residential real estate in Los Angeles? Both once seemed eminently possible.


The problem was that Frank's might ran out. The liquidity wasn't there. And baseball teams operate quite differently from normal businesses. Run a small company with an iron fist and the whatever toes you step on probably belong to someone who has to grin and bear it. Run a baseball team in a major market on a shoestring budget, and you run the risk of an entire community turning on you. 


The big question is: could things ever get to the point where people stop showing up? As long as the product on the field is competitive and the sun still sets over the left field bleachers, I'm not sure any amount of fan unrest will affect gate receipts. It's for this reason that, at this point, Frank ought to rethink everything he thinks he knows about community support. How Los Angeles feels about McCourt ownership will, in the end, rest almost entirely on the product on the field.
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1 comment:

  1. Community Support can only go so far, if one is broke.

    All of Frank's and Jamie's previous antics are the modus operandi of Real Estate Developers. It is a business that long term enemies are made, as your post of bitterness toward the McCourts' previous dealings are obvious. It is also a business that relies on leverage, credit lines and low interest loans, so developers can sleep at night because they are gambling so much.

    The problem is that Frank's charade is coming to a close. I doubt Jamie is divorcing Frank because of incompatible differences, she wants to secure her share before it is all flush down the drain.

    I have been sensing for some time that something is going on with between Frank and the Banks, either his credit rating isn't great, or he can't get unsecured short term loans, and the Dodger have a serious cash flow problem, given they tend to be opaque and gun shy for a couple weeks before money from a secure loan comes in.

    If the Dodgers are sold, I am curious of what is the debt ratio to team value, and how much the McCourts are in the hole, and how many other loans that they have besides their 25 year/$250 million loan with the 5.66% interest rate, (aka paying around $25 million a year to pay that loan alone)

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