Wednesday, December 1, 2010

Time is running out.

Yesterday was another odd day in over a year filled with them. Let me get you up to speed, and then we'll discuss the implications of the day's events.

Ever since the trial to determine the validity of the MPA ended in September, the parties (and their representatives) have been under an order to keep settlement discussions confidential. This order covered details of the formal mediation process, led by Judge Peter Lichtman, as well as any informal negotiations between the parties. With occasional exception, that order has been followed.

Last week, we learned that Judge Lichtman would soon put a formal proposal on the table, and the parties were advised that a failure to agree by the end of November would likely leave the power to decide the issue solely with Judge Scott Gordon. That brings us to yesterday.

At about 3:30 Pacific, Frank's camp issued the following statement:
Frank fully supported the mediation process in the hopes that it would result in an agreement that would bring long-awaited closure to this matter. 
It is clear that Judge Lichtman, who acted as the settlement judge in this matter, went to great lengths to bring the parties together.  He presented a thoughtful, detailed proposal that clearly took significant time, energy and expertise to prepare. 
After considerable deliberation, Frank accepted Judge Lichtman's proposal.  He felt it was the responsible thing to do for his family, the Dodgers organization and the entire community. Unfortunately, Judge Lichtman has declared the parties to be at impasse.  We can only conclude that Jamie rejected Judge Lichtman’s settlement proposal and is allowing this matter to drag on further.
Talk about burying the lead! It was a move clearly intended to paint Jamie as the roadblock in settlement discussions. Judge Lichtman, a respected mediator, put an offer on the table. Frank accepted, Jamie didn't. Pretty easy PR play from there.

When reached for comment, one of Jamie's attorneys expressed surprise about the statement, offering little more than the following:
We believe that the Court ordered complete confidentiality regarding the settlement proposal and everything related to it, and we believe it would be a violation to say anything about the proposal or anything related to it. 
Busy day, huh? Jamie turned down what was likely the (lucrative) last, best chance to settle the case prior to a determination of the MPA's validity, and Frank's camp decided that the benefits of publicizing her rejection of the deal outweighed the risk of running afoul of the Court's confidentiality order. These decisions--both calculated risks--might provide a great deal of information about the relative strengths of the parties. Let's start with what each party's response to the settlement proposal tells us about their camp's mindset.

Stated crudely, there are three main components in each party's evaluation of the settlement proposal: what the party would get in the settlement (X), what the party would get in a win (Y), and the party's chances of losing (Z). In a vacuum, you compare X to [Y discounted by Z] and go from there. Of course, life (and law) doesn't happen in a vacuum, and considerations like predictability, risk tolerance, and plain old human emotion play in.

Frank and Jamie's decisions to, respectively, accept and reject the settlement terms do not, on their own, tell us a great deal about the specific proposal on the table, or how each party views its position moving forward. For instance, Jamie's rejection of the settlement doesn't necessarily means she thinks she will win--just that the settlement wasn't generous enough to persuade her to give up the chance to win. But, using other information, we can speculate a bit as to what yesterday's events mean.

In settlement discussions prior to the trial, Frank steadfastly refused to consider any agreement which affected the family's ownership of the Dodgers in any way. Sources very close to the situation told me in September that this position extended to terms that stopped short of actually selling the team; Frank was unwilling to think about selling part of the team to pay Jamie off, and was also unwilling to encumber future revenue streams in such a way as to affect the team's operating budget.

If we assume that Frank, after the trial, at least stood firm on the issue of keeping the team in the family, we can logically speculate that the settlement proposal on the table that Frank accepted and Jamie rejected would have accomplished that goal. We can also assume that the settlement proposal reflected Judge Lichtman's informed opinion on each party's chances should the case reach a decision, although we can't be sure the parties themselves agreed with Judge Lichtman's assessment.

In a very uncharacteristic move, Frank's camp broke silence on the issue, beating Jamie's to the media. Over the course of this saga, it's been rare for Frank's side to proactively shape public opinion; from day one, Jamie's fought much more loudly than Frank. Here, it's clear that Frank wants us all to know that he agreed to end this battle, and Jamie stood in the way. But why?

The Times' Bill Shaikin and Carla Hall spoke to a couple experts to find out. One, family law attorney Lynn Soodik, speculated that Frank either saw the offer as fair, or knew that Jamie was going to reject it. Under the second theory, Frank wanted to realize the public relations gain from painting Jamie as the reason this is still an open issue. His side's choice to make all this public now, though, suggests there's more going on than simply trying to grab the moral high ground.

By going public with Jamie's rejection of the expert mediator's settlement proposal prior to a decision, Frank can accomplish two things. First, there is the open and obvious public pressure on Jamie's side to come to an agreement. Maybe the thinking is that this will force her hand. Maybe the thinking is that, for as concerned as Jamie's side has been with its public perception, coming off as unreasonable and uncompromising is not an acceptable outcome.

Or maybe yesterday's statement wasn't about yesterday. Or last week. In addition to applying pressure to Jamie's position, I think it's at least possible that Marc Seltzer's comments were meant to lay the foundation for Frank's least desirable outcome: an eventual sale of the Dodgers, compelled by a decision in Jamie's favor. Frank felt accepting the settlement "was the responsible thing to do for his family, the Dodgers organization and the entire community." Conversely, then, rejecting the settlement, as Jamie did, would have been the irresponsible thing to do. Put differently, it might have jeopardized what Frank believes should be the couple's most important goal.

Frank McCourt's primary position has been that the Dodgers must stay in the family. Naturally, he is confident that McCourt ownership is also good for the Dodgers and, by extension, the community. While he might have come to Los Angeles an outsider, I strongly believe that Frank has come to regard the Dodgers as much more important than 24 acres of Boston seafront property ever were. And I wonder if yesterday's release is a sign that he is concerned about his chances of keeping the Dodgers in the family.

I still think Jamie got what she wanted in the MPA. I can't look at her initial public statements in the divorce and conclude that she had any idea that the documents had been switched--that she had any idea there existed an Exhibit A making the Dodgers anything but Frank's separate property. And I can't help but think that, despite her apparent unfamiliarity with marital property laws in Massachusetts and California, and despite the ugly chain of events leading up to the MPA's execution and subsequent modification, Jamie didn't have enough in the way of background and intelligence to at least question the document when she reviewed its terms. 

For all that, though, Jamie's case is strong. Strong enough, perhaps, that Frank's inability to prove his facts is more important than Frank's facts as they actually occurred. Strong enough that most observers considered Jamie to be in the lead after the trial. Strong enough that Jamie turned down what was surely a well-reasoned, thorough settlement proposal crafted by a well-respected mediator. Strong enough, basically, that the McCourt with the most to lose is ready to roll the dice.


  1. Josh,
    I agree with your hypothesis that the Seltzer release was a veiled capitulation by Frank and one last media gasp of moral certitude before the ax comes down on his head. I think he knew before all of this began that the Silverstein blunder was irreversible. Whether Jamie used this to her advantage to win it all is probably less important than the overall potential of a universal alteration in California divorce law, in which this case may be a benchmark. Jamie is more than rolling the dice on this one. The piety in which Frank espouses a generational legacy of Dodger ownership to attain the moral high ground is on only specious to me, but rather nauseating. Ironically, it appears that maybe Jamie is more interested in control of the team than we thought. Although there has been plenty of speculation that she may attempt to buy him out with an investor group since before the beginning of this debacle.

    The sale has now officially begun.

  2. As a dodger fan, I couldn't care less that Jamie is acting "irresponsible."

    Does Frank understand that to a Dodger fan, keeping the team in the family is the worst thing imaginable? All I thought when I heard this recent news was, "Go Jamie go!"

  3. Out of curiosity, do you know for sure if this was a true mediation, as opposed to some form of MSC? Many folk (even season atty's) confuse the two, and there are significant differences both during and after (mainly privilege).

    Second, having appeared a bit before Judge Lichtman, and engaged in his old standby, the hybrid mediation / MSC multiple times, he is one of the best, if not the best, settlement referee's around, either on the bench or for hire.

    So my personal opinion (knowing nothing of the actual details of the process other than what has been reported) is that Jamie was none to smart to turn this down.

  4. Frank's willingness to increase the 2011 and future payroll budgets immediately after he received the mediation proposal is a clear sign that he believes that he would win the case. Frank is too cheap to increase the budget if he thought that the mediation proposal was not in his favor.

  5. You think that's a clear signal? I think it's Frank trying to win over the fan base again. He's lost every ounce of credibility he's had with the fans.

    I know I'm not paying for a ticket next year.

  6. "In a very uncharacteristic move, Frank's camp broke silence on the issue, beating Jamie's to the media. Over the course of this saga, it's been rare for Frank's side to proactively shape public opinion; from day one, Jamie's fought much more loudly than Frank."

    I'm not getting this. Wasn't it Frank who filed for dissolution? Wasn't it Frank's lawyer (the first firm who screwed up the agreement) who spread the "agreement" before the media? Wasn't it Frank's lawyer (the defender of womanhood such as Erin Andrews) who gratuitously attempted to portray Jamie as a whore? I don't get it.

    From what I've heard, I don't think there was any ambiguity as to the court's ordering the matter to mediation with the understanding that the proceedings were to remain confidential. Nonetheless, the bashful Frank comes out of the blocks blatantly violating the order by disclosing that he was in agreement but the incorrigible Jamie wasn't

    On the basis of Frank's performance, one would certainly question his reliability. The settlement proposal of Lichtman is certainly not a holy writ, and its acceptability depends in large part on the details of his proposal. While Lichtman may have had a general understanding of the problem, the devil is in the details. If the settlement gave Frank continuing control of the Dodgers, and Jamie had to rely on his honesty and competence to receive payment from the business, it would be only reasonable that Jamie might have some problem with it.

    We don't know the facts, and Josh, while I appreciate your posts, you really haven't given us anything that would convince me that Jamie's position is either unreasonable or not ultimately in her own best interests.

  7. I appreciate the feedback. Jamie actually filed for the divorce, and the MPA was included in her filing. I don't know what specific instance you're referring to concerning attempts to sully Jamie's character. It's true that one of Frank's lawyers worked it into the questioning of one of the witnesses at trial.

    I think most folks who have kept close tabs on this for the duration would say Jamie's been much more public than Frank. That's not to say it was any better or worse a strategy than Frank's. It's just how it played out.

    I'm glad I haven't given you anything that would convince you Jamie's position is unreasonable or contrary to her best interests, because I believe neither of those things. Clearly, she thinks she's going to win, and is acting accordingly. In my opinion, Tuesday's release was an unusual move on Frank's side's part, and I don't think it's crazy at all to think he's very worried about his chances with Judge Gordon.

  8. Josh-I stand corrected. Jamie did file first, but if you look at the petition, the immediate claim is for Jamie to be reinstated to her employment with the Dodgers. You recall that the week before Frank had fired Jamie.

    If you google to reconstruct what happened a yr ago, you'll see that Grossman was out front calling Jamie's claim that she had rights in the Dodgers under the MPA a "fantasy."

    I wouldn't argue about who was more public except that Grossman was all over the place as Frank's spokesman and particularly as an advocate of her non-marital relationship.

  9. Jamie and her legal team has done more publicity stunts like standing outside of Dodger Stadium, demanding her job back than Frank and his legal team. Frank's side has tried to wipe their fingerprints better, or if they do want fingerprints, they tried to show good PR about Frank, like giving away 40k in tickets to the LAPD, when the Dodgers were out of playoff contention.

    However both sides have been pretty nasty in the media. Jamie's side appears to leak stuff to the New York Times, (probably courteous of Boies) and both sides used TMZ like dropping the restraining order on Jeff Fuller by his former wife, by Frank's side. Both sides have hinted of the others' infidelity, even though it is pointless in a no fault divorce state.

    I laughed when "in the interest of the family" is thrown around in this divorce. If they cared more about their family than the money and assets, they would settled this long before it was headed for trial, "in the best interest of the family". I have seen hostile corporate takeovers look friendlier than the hysteria surrounding this divorce.