Friday, June 17, 2011

Few questions remain.

---
Below, you'll find the term sheet signed this morning  by both Frank and Jamie McCourt, in which the warring couple agrees to a settlement. Peruse through it at your leisure, but here are the two major outstanding questions, resolution of which will set the franchise's course over the months and years to come.

1. Will Major League Baseball approve the Fox deal?

The key to the settlement agreement is MLB's approval of a near-$400 million TV rights deal with Fox. Of that money, $10 million would go to Jamie directly, $50 million would be placed in a lock box (more on that in a moment), and about $80 million would go to paying off debt on Dodgers land.

Baseball has been reluctant to approve the deal, which formerly did not have Jamie McCourt's approval. Her newly given consent, however, does not mean MLB will automatically rubber-stamp the deal. Baseball is still investigating Dodgers finances and operations, and will not approve the deal until and unless it deems the franchise to be in good hands.

If Baseball does not approve the deal by June 30, the club is in danger of missing payroll. Should that happen, Baseball seems likely to meet the Dodgers' financial obligations and fully seize the team. I will be writing more about the considerations going into Baseball's decision this afternoon, but suffice it to say it is far from a slam dunk. Oddly, should Baseball block the deal, Frank and Jamie will find themselves allies in litigation, after twenty months of opposition.

2. Pending MLB approval of the deal, there will be a one-day trial on August 4 to characterize the Dodgers assets at Frank's separate property or the marital estate's community property.

Once feared to last weeks and weeks, the final litigation in the McCourt divorce will take just one day, as Judge Gordon determines whether the Dodgers being titled in Frank's name alone is a basis sufficient to characterize the team as his separate property. From there, it's pretty easy:

If Frank wins: He keeps the team, hands over the $50 from the lock box, and pays Jamie $45 million within two years of Judge Gordon's ruling. Importantly, he also indemnifies Jamie from any tax liability associated with the team. Jamie gets her money, has no claim to the Dodgers, and the club moves forward owned solely by Frank McCourt.

If Jamie wins: The team will be sold and the assets divided. End of story.

Much more as the story develops, including expanded thoughts on the meaning of the shortened trial. The takeaway is that Commissioner Selig is now the most important figure in the McCourt divorce. His decision to allow or block the Fox transaction will clear the path for this story to be over by the end of the Summer.
--- 

22 comments:

  1. Dear Baseball Gods: Please, PLEASE let Judge Gordon rule in favor of Jamie. Return the team to the people of Los Angeles and let a new custodian-owner come in that will treat the Dodgers as a crown jewel of the City of Angels, and not like a stash of money burried between the matresses.

    ReplyDelete
  2. Mr. Fisher,
    Thank you
    Jay Davis

    ReplyDelete
  3. Josh, please correct me if I'm wrong, but hasn't Selig said all along that one of his reasons for not approving the Fox deal was his concern that the money would be used to settle the divorce instead of used on the Dodgers? In the settlement, it states specifically that $385 million would be used for the divorce settlement (among other things). Given that, why on earth would Selig approve the Fox deal now?

    ReplyDelete
  4. I feel Jamie would win the trial on 8/4, however that would mean the TV rights are Foxs again until 203x, which would really hurt the interest of potential buyers.

    We need MLB to block the TV deal.

    ReplyDelete
  5. $385m is the cash advance under the Fox deal, but I don't think it all goes to settle the divorce. I read it to say $70m goes directly to settle the divorce and another $80m is ambiguous because it doesn't specify whose debts it is intended to satisfy.

    ReplyDelete
  6. That's a very good question about the upfront money being used for purposes other than the Dodgers. At first the figure was reported at 300 million dollars if I remember right. Then it was revised to 285 million. That may have been Soboroff when he missed his daily Zoloft dosage. Now I see its 385 million dollars. Which are we to believe?

    I think Selig might approve the deal because now he would face a gauntlet of attorneys from both sides. He's basically spineless. He likes to sneak around behind the scenes. Like he did with Loria & their attempt to defraud the minority partners of the Expos. He settled out of court when he got caught if memory serves me correctly.

    Frank made his bones suing his partners in Boston. Then he sued the company who built his parking lots. Finally he sued the government over the Big Dig. Bud should have known better than to allow this vermin to purchase the Dodgers in the first place. No matter what Fox wanted. I guess his desire to place a small market owner in Los Angeles overcame his common sense.

    ReplyDelete
  7. Previous commenter is correct. At the end of the day, Selig will have virtually no choice but to approve the deal and allow Gordon to make the final call. However, my question is what will happen with the FOX deal once it has been approved by MLB IF and WHEN Gordon denies Frank McCourt sole ownership of the Dodgers? Does the deal follow the new owner? Or is it immediately nullified?

    help.

    ReplyDelete
  8. How can "Frank win"? Seriously, wasn't the MPA being thrown out a clear indication of what Gordon thinks of Frank's claim the Dodgers are his and his alone? This is California we are talking about, a community property state. I need a lawyer to explain to me how Frank, after 30+ years of marriage, can just take a billion dollar asset and tell Jamie to take a hike.

    ReplyDelete
  9. Judge Gordon committed Judicial Malpractice in approving this deal. . . He should have appointed a receiver to report to the Court and the public on the state of Dodger finances and operations. . . . .

    Three creditors should get together and put the Dodgers into an involuntary bankruptcy. . . If one thing is evident in this 'deal' is that the Dodgers are insolvent (if that was not clear before). . . .

    Why? Take a look at Paragraph 2(c). . . Frank gets $23 Million (sort of 'off the top') as reimbursement for 'loans' he made to the Dodgers in 2011. . . What are the Dodgers. . . Some 'rinky-dink' under-capitalized entity where the equity owner gets to 'loan' the team money and then get repaid ahead of other creditors?

    How terrible. . . treating a treasured enterprise like it was Frank's personal little play-toy! This is an incredible abuse of corporate privilege. . . Is this how the 'big-boys and girls' really do business?

    A one-day trial to determine if the Dodgers are community property? Are you kidding me? The result would appear pre-ordained. . . Jamie loses. . . Too much work for this 'bureaucratic' Judge were it to be otherwise. . .

    Shame on Judge Gordon (and I use the term 'Judge' loosely). . . .

    This is what happens when we (as a society) permit 'legal monopolists' to rule and we fail to enforce our 'citizen-empowerment' capitalist values.

    Noel Weiss

    ReplyDelete
  10. bud won't approve the deal, as the august date could require the dodgers be sold, and if the dodgers are sold, the value of the franchise is greatly diminished if the media deal is in place.

    Bud can say it is in the best interest of baseball and MLB not to approve any deal until ownership of the franchise is adjudicated.

    ReplyDelete
  11. Dilbeck of The Times is now saying that 173.5 million dollars of that 385 million cash advance is going directly into personal matters not concerning the Dodgers.

    We just can't believe a word Frank says. He swore that money would be used on the Dodgers.

    "The $300 million I made clear to baseball today, that the entirety of the $300 million is going directly into the Dodgers as equity," McCourt said April 27th. "None of those dollars is being used in any personal way. I would be happy to make that commitment in writing."

    ReplyDelete
  12. It can be very simple to add the best release just about this good topic with support of article submission service, but sometimes people choose medical article submission. And I do not really know what is better.

    ReplyDelete
  13. I like what you wrote, very grateful for you sharing.

    ReplyDelete
  14. thank's for the information buddy, realy good tips for me..cheers

    ReplyDelete
  15. a community property state. I need a lawyer to explain to me how Frank, after 30+ years of marriage, can just take a billion dollar asset and tell Jamie to take a hike.

    ReplyDelete
  16. I did not see your contact information, so I hope you do not mind if I come here. My husband insisted thank these good resources.

    ReplyDelete
  17. Must accept that you are one of the best blogger I accept anytime read.

    ReplyDelete
  18. This is the good news.The information you provide is very useful for me.Thank you for sharing it.I will come to see if you have new post every day.

    ReplyDelete
  19. That is very kind of you to write this share for us, thanks a lot!

    ReplyDelete