Wednesday, August 25, 2010

Why haven't the McCourts settled?

Only four days remain before the McCourts will face off in court to determine ownership of the Los Angeles Dodgers, and every indication is that the trial will begin as scheduled. While it appeared that the possibility of a settlement was gathering momentum only a couple weeks ago, my sources are insistent that the trial will go forward. Other observers are hearing the same thing, and I now feel confident enough that I have booked flights and hotel down the street from the courthouse.

So why have the McCourts been unable to reach a settlement? Principally, I think it has to do with how Frank McCourt does business. A line of Frank's trial brief sums it up nicely:
Frank is an entrepreneur at heart and has an extreme tolerance for risky ventures that, potentially, could have big returns.
While that sentence was written to provide background for how the McCourts got rich and why Jamie supposedly wanted the MPA, I think it applies here, too.

Settling is safe. Trial is risky. But the rewards of winning at trial are enormous. He'd preserve his vast net worth. Dodgers ownership would seem to be safely in McCourt hands for generations to come. And Jamie's name and image would be in the dumpster. Winning at trial represents the best possible outcome for Frank, and, as his attorneys tell the court, he has an extreme tolerance for the risks associated with litigating this matter until the end.

As for Jamie's part, she, too, feels well-prepared for trial. Her argument relies on several theories that, she argues, should lead the court to conclude that the MPA either never existed or should be enforced. As we did with Frank above, let's look at an excerpt from Jamie's trial brief that has meaning beyond its context:
Jamie trusted Frank as her marital and business partner to make decisions with respect to the way their businesses were structured, finances were arranged, and regarding tax planning matters. Jamie trusted Frank [and Bingham attoryney Lawrence Silverstein] not to present her with something that took away her rights to the very thing that was a life-long dream for her--owning a baseball team, which also represented the vast bulk of the parties' marital estate.
Jamie is an intelligent business woman who would never have knowingly given up her interest in the Dodger Assets in return for the "protection" of residential properties worth far less.
The emphasis is Jamie's attorneys'. And it is here we reach the impasse: Frank builds his case on the notion that Jamie had always sought protection from Frank's risky business ventures, which included the purchase of the Dodgers. Jamie contends that she never meant such protection to strip her of the assets in the context of the divorce, and that she never considered the Dodgers all that risky, anyway.

It's impossible to say how much of this is real, and how much is posturing. I do know that an awful lot of damage has been done, and each party is pretty well entrenched. Frank sees, in the trial, the opportunity of a lifetime, and he fervently believes the facts and law are on his side. Jamie feels aggrieved, wronged, and cheated. She believes that the court can come to no valid conclusion other than to rule the MPA null and void.

And that's why we're here today, counting down the hours to trial. Might it be settled in the eleventh hour? Perhaps. But Frank wouldn't hit his home run, and Jamie wouldn't get her vindication. A settlement remains the safe play, but Frank doesn't play safe. A settlement remains the quiet play, but Jamie doesn't play quiet. It's a fluid situation, but it sure looks like we have busy weeks ahead. My bags are packed.


  1. The worst possible scenario would be the nullification of the MPA, and a 50/50 community split, primarily because Frank strikes me as a man who will use every single cent to appeal his loss. While his personal assets are not directly involved with the Dodgers, so they say, the ongoing financial distraction would be enormous. The best possible solution is for Frank to win outright, or for him to capitulate after a "loss" and sell to Gilbert immediately.

  2. Tony--

    I'm not at the point where I want to anoint a new owner, but I'm 100% on board with the rest of your points.

  3. My instinct is telling me this guy is wrong for the Dodgers. As for the law? who the heck knows how this thing will be settled. As far as I can tell, it's a throw up between the two parties.

  4. lol@rc. I hate to sound like a dick but at this point, one doesn't need instinct to see that frank mccourt has reduced dodgers spending not only in player development but actual major league payroll (not to mention hiring a horrible GM.)

    The Dodgers legacy of making it all the way to the past two NLCS have been on the backs of a shitty NL West.

    And going up, while I think new ownership is probably needed, I don't get all this Gilbert love. Where are his on the record statements about what he thinks the Dodgers ought to be investing that makes people think that he is going to be a saviour?

  5. People who keep bashing the NL West are ill-informed, it was the best division in the NL last year. It had to do with Manny and luck from the bullpen.

  6. you may be right about last year (well, at least the rockies came on late) but what about the year before?

    now, I may have been overly harsh in my earlier comment but the substance remains true. The mccourt ownership era has been hallmarked by a lack of spending for its on the field product.

  7. Josh,
    Hope your trip goes well. The weather here is turning comfortable again, and hopefully the courtroom will be properly air conditioned. I'm still debating whether to get up at 5:00AM to get in line for my non-media lottery seat.
    By the way, your best bet for chow is the underground mall located just a block away off of Temple near Spring St. Lots of decent and fast choices. Watch out for the cafeteria. I was a juror on a murder trial four years ago and had to be replaced due to food poisoning.
    You are at the Biltmore, which is just a stone's throw from the courthouse. I would take a cab, as parking is probably going to be insane. Also, there is a starbucks in the middle of the outdoor walkway near the Music Center by Grand Ave.
    Good luck!

  8. Tony,

    Thanks so much for the recommendations and kind wishes. Shoot me an e-mail if you'll be around at some point during the trial.


  9. Tony, McCourt is not going to sell the Dodgers if he wins. I wish he would sell (to Gilbert, or any other billionaire). The best thing that can happen is they are forced to sell, and each get half. The sooner the better, that way new ownership can improve the team in time for next year.

    The McCourts are bad for the Dodgers. They spend the least on draft, and international players. They lower payroll while increasing parking and ticket prices. I read somewhere that by 2018, they plan on keeping the payroll the same while raising the average ticket price to about $50(before McCourt bought it was $18, now its about $33), and increase parking from $15 to $40.

    The Dodgers are nothing more than the McCourts cash cow. They will never win the World Series with these Crooks!

    Force them to sell Judge Gordon!!!