Wednesday, April 20, 2011

MLB seizes Dodgers operations; McCourts face IRS scrutiny.

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Much more as things develop (keep track of the sidebar to the left), but here's what we know: Major League Baseball has taken over Dodgers financial operations. According to the Times' Bill Shaikin, Fox providing a $30MM personal loan to Frank McCourt last week may have been the final straw for the commissioner's office. Presumably, baseball's annexation of Dodgers operations provides an implicit guarantee of financial backing; MLB won't let the players and staff go unpaid. If baseball does have to finance the Dodgers as a going concern, however, it is nearly impossible to think the Dodgers will stay in McCourt hands.


Jamie, for her part, released a statement expressing approval of baseball's actions (link above). However, the necessity of MLB intervention in the first place is likely terrible news for her. Her biggest payday was going to come from either a sale of the team at market value or a massive check coming from the infusion of new capital in Frank's ownership of the Dodgers, through a sale of a minority share, the creation of a new cable network, or a lucrative extension of the club's current TV deal. Now, everything is in limbo.

As for the McCourts, TMZ is reporting that the IRS is investigation the family's financial dealings over the years. The McCourts have not paid income taxes, as the direct source of their cash was loans taken out against various parts of Dodgers operations. Also reportedly of some concern is the club's practice of employing McCourt children in no-show jobs (and then presumably writing off their salaries as business expenses).

Much more on this story as it develops.
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19 comments:

  1. Let me be the first to "Goodbye Frank, and don't let the door hit you on the way out." (And you can take Marshall Grossman and Lasorda with you on the way out.)

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  2. My prediction, Joe Torre will Selig's interim appointee to run the team.

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  3. For their sake, I hope they didn't deduct the interest on those loans as business expenses.

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  4. I nominate Peter O'Malley as interim president of the Dodgers. Can you think of anybody who is better qualified, who would do a better job and in whom the community has more confidence?

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  5. If Selig is smart, he would put Kim Ng in charge.

    I don’t see Selig doing this, unless the Dodgers finances are really bad. I am guessing, McCourt doesn’t have enough cash to meet payroll, and he can’t get commercial paper..

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  6. My first thought is, people are being wildly optimistic about forcing McCourt out.....when you read about his dealing back in Boston that got him the fabled parking lot, you realize he's a smart, tenacious businessman who will not let ethics, scruples, shame or anything like that get in his way.....
    ....However, this different in that he will need rich guys to come in and bail him out; but unlike parking lots, there is a lot of publicity about the Dodgers, and not many rich guys want to be associated with McCourt....I don't think McCourt is any more or less slimier than most successful American businessmen (well, maybe less than Donald Trump), but you have to be able to control the media and spin things your way, and McCourt failed miserably at that; obviously should have scooped up some Bush aides who could have cleaned it all up......

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  7. ^^^^^

    Mc Court goon post of the year nomination

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  8. Sara Palin should take over the team. They could have tea bagger tuesday specials. Besides, she can see Russia from Chavez Ravine!
    Unfortunately McCourt is being advised by Donald "the Chump" Trump. A bancruptcy procedure is coming in which McCourt will come out with his own T.V. show that he will leverage into a Presidential bid.

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  9. Kim Ng won't be involved, per Molly Knight on Twitter (can't find the link just now).

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  10. @ first comment ---Why lasorda gotta go?

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