Friday, August 13, 2010

One long argument.

As the trial grows closer, and time for settlement becomes precious, several national outlets have cast their gaze back toward the McCourts. Through Business Week's Richard Siklos comes a detailed, engaging profile of Jamie. Visiting the office much more willing McCourt, Siklos describes a trip to Jamie Enterprises:
She pulls out a tribute video from happier days, before her husband of 30 years, Frank McCourt, fired her as chief executive officer of the Los Angeles Dodgers baseball team: Vin Scully, the team's legendary announcer, praises her "brains and energy"; Tommy Lasorda says "she does a wonderful job"; and the dean of UCLA's business school gushes that she is a role model for women who is a "gorgeous, energetic, smart, brilliant person." Jamie is shown hugging players and her sons, and swimming her morning laps at the McCourts' Beverly Hills mansion. At the end, the petite, now 56-year-old blonde says to the camera: "There's that myth about having it all at one time. I don't think that's true, but you can have a lot." 
That's pretty much Jamie McCourt, isn't it? Self-promotion is a wonderful tool, and it has served Jamie--and countless other extraordinarily successful people--quite well. But there's something just a bit off about showing a reporter a promotional video. Trying to play the media is one thing; trying to sell yourself to it is another.

Siklos' excellent piece offers another glimpse into the differences between the McCourts when it came to finances. He writes:
Unlike her husband, Jamie is a self-described "big worrier" when it comes to money. She was horrified, she says, when, early in the marriage, a sheriff appeared at their door to collect a debt related to her husband's business and when a lien was later taken out against their house. Because of this, the McCourts decided that their residences would be put solely in Jamie's name.
They were also dogged by money woes. A May 2003 internal memo to Frank and Jamie from a senior McCourt lieutenant entitled "here we go again" warned of a looming business and personal liquidity crisis if they didn't watch their spending. 
Nothing all too surprising here, is there? This fits with everything we've seen to this point. Jamie, for all her salesmanship and aggressive self-promotion, certainly seems a bit wiser when it comes to spending--relatively speaking anyway. That May 2003 memo is a bit disconcerting; as you'll recall, the McCourts purchased the Dodgers several months later.

But then again, the McCourts personal liquidity had little to do with their acquisition of the Dodgers. Though Siklos' piece again supports Frank's point that separating the assets was Jamie's idea, he also relates, through a source, that Jamie was often sharper and more pointed when it came to negotiations for the club. From the beginning, Jamie has painted the picture that she had a role something greater than ornamental. At least in the preliminary stages of McCourt ownership, that looks to have been accurate.

Siklos' reporting also reveals an interesting interplay between the attorney who drafted the MPA, Larry Silverstein, and the attorney the McCourts engaged to review it, Leah Bishop:
In one e-mail exchange between Bishop and Silverstein, the Boston lawyer who wrote the original MPA, Silverstein told Bishop that there hadn't been a mistake in the original MPA, writing, "I recall [Jamie] saying in those days she didn't care about the business assets so long as she had her separate pool." In response to Silverstein's e-mail, Jamie angrily wrote that this was "preposterous....Don't forget, I was a divorce lawyer there and I am really clear on what the intended distributions were to fault, I guess, for not having read the post marital document and believing that you were preserving the status quo." 

That's sort of what we've been saying all along, isn't it? "My fault, I guess, for not having read the post marital document and believing you were reporting the status quo." As a lawyer, Jamie is held to a higher standard in negotiations like this. She is presumed to have knowledge greater than a non-lawyer, and failure to mind her p's and q's, as it were, is a glaring misstep.

But that's not all there is to the picture. Is it fair to hold her to that standard when dealing with her husband of more than two decades? While the McCourts' marital relationship had always seemed contentious--they have been portrayed as arguing all the time--that's just how it works for some couples. Countless couples. The existence of conflict does not necessarily mean the absence of love, and I believe it entirely possible Jamie did trust Frank not to put her in this position.

Which raises a difficult question: who should suffer for their mistake? Frank for his alleged deceit? Or Jamie for her alleged naivete?
As the trial looms, Jamie knows firsthand how intractable Frank can be. "I'm disappointed, not surprised," she says. Neither, presumably, is Frank. In better days, he once said of their four-decade partnership: "It's been one long argument, actually."
While the bitterness and animosity might not fade, the long argument, at least, is soon to conclude.


  1. Go to trial and risk disclosing "secrets" or come to a settlement...

    Tough decision to make.

    Documents For Divorce
    "No matter what decision you make, always make it an informed one..."

  2. I think this post is more evidence that this blog is just a proxy for the Dodgers PR department. It is just repeating the talking points that Jamie should had known what the MPA was all about, and the MPA is written in stone.

    The article, states some stuff that is pretty alarming, mainly the Dodgers are carrying $525 million or more in debt. Any company that makes $20-$30 million in EBITDA with $525 million in liabilities, better have a good business plan. The Debt/Value ratio is 72% of the Forbes Valuation of the Dodgers, and the Forbes valuation is pretty generous.

    Second, whether the MPA is bombproof, and I believe the document is valid, the situation is precarious for it to stand up in court. MPA won't make things separate property in a comprehensive community property state like California. Especially how there is no separation on how money was taken from the Dodgers to buy top properties in Southern California.

    No matter if Frank McCourt wants to gamble that he can keep the Dodgers with the MPA, Jamie and Frank didn't divide their finances, nor kept them separate. They took money from the Dodgers to finance their house buying mania. Any creditor could easily tear up the MPA in bankruptcy court. If the MPA is so bombproof, then Frank and his legal team wouldn't be offering settlement options to Jamie.

    Second, the Judge is going to look at the huge debt the McCourts have acquired as longs as their assets, he may just pool all the assets together, and spilt the worth down the middle, along with the debt. No matter if Frank "owns' the Dodgers, Jamie worked from Day 1 as an executive officer for the team. A Judge isn't going to ignore that. If the Judge doesn't make the McCourts sell the Dodgers, a bank and institutional investors may force Frank to sell them in the near future.

    It is stupid to rely on Dodger ownership on the MPA, both of them should settle.

    Jamie's disingenuous in the article is that she is a "big worrier", she spent $14 million building a athletic complex at her house in Holmby Hills. She could had save the money by going to UCLA every morning, and swimming at a one of the Olympic pools they have on campus. She comes across as dysfunctional and neurotic as Frank. That is $14 million to paying off yearly interest on the $250 million AAA bonded Bank of America loan.

    What the article shows, is that both McCourts should had never ever been approved by Major League Baseball to own a baseball team, let alone, one of the top teams in the monopoly. This article just reaffirms what people in Boston knew, and what people in Southern California had a pretty strong inkling from the beginning. The McCourts' relationship was dysfunctional, they are dysfunctional as business professionals, and they have no idea what they are doing.

  3. a lot to unpack from okojo's last post there.....

    1. That this is a mouthpiece for Dodger PR, well, I don't know Josh Fisher beyond the comments here and the few emails we've exchanged, so as much as I doubt that he's an apparatchik of the Dodgers, it's not for me to say. However, I don't understand where you think Fisher "agreed" that the MPA is "written in stone."

    2. I'm confused as to what, if anything, the MPA has anything to do with whether the McCourts siphoned the money out of the Dodgers to purchase their various properties. As far as "MPA won't make things separate property in a comprehensive community property state like California," if that is the case, then isn't this whole thing pointless? I can't believe that it's such an open and shut case as you're implying here.

    3. Isn't the whole point of the MPA to make sure that if the Dodgers went bankrupt (and I don't think anybody at any point has sated that this is a possibility,) that their real estate holdings would be protected from creditors? If it doesn't provide that sort of protection, then what were all those thousands of billables (probably hundreds of thousands) for?

    4. Again, I cannot speak to what divorce court judges do, but one constant theme throughout this comment by okojo focuses on the Dodgers becoming insolvent and being forced to act. This isn't like Liverpool where the owners have some £200M+ that's going to be called in a few short weeks, from what I understand, the Dodgers' debt are long term and the team is generating enough cash to meet its various requirements. Yes, the Dodgers might be leveraged to the hilt but there isn't a risk of their loans being called in. Or am I missing something here; another way of stating this is: where are you getting the belief that a bank or IV may force Frank to sell in the near future? If Frank is meeting his obligations, what legal standing do they have?

    5. Finally, whether you approve or disapprove of the McCourts and their preferred method of business, you cannot deny that it's not be successful. They managed to turn a $200K option on a parking lot into a $700M+ asset, now, I'm just some random guy on the internet, but by any standard, that's pretty shrewd business. Again, I think it's important to note that simply because we don't approve of someone, it doesn't mean they're not successful...