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Frank McCourt has a "slush fund," secret partners and pays his kids to do nothing

May 18, 2010, 3:17 PM EST

John Weinbach of FanHouse reports some more unseemliness from the land of Frank McCourt and the Dodgers:

Over the past 18 months, the Los Angeles Dodgers paid nearly $4 million
in “consulting services” to [the John McCourt Company], an entity that
has done virtually nothing for the club, even as the team has made a
concerted effort to raise ticket prices, trim payroll and acquire
players on the cheap. Moreover, the club paid two of Frank and Jamie
McCourt’s adult sons large salaries — $400,000 and $200,000 per year,
respectively — for services that are undefined and could not be
described by either Frank or Jamie McCourt, according to court documents
filed in the couple’s divorce case.

Jamie McCourt’s attorneys call the John McCourt company a “slush fund” which Frank uses to hide money.  My guess is that she’s less critical of the big salaries her kids make for apparently do-nothing jobs.

In addition, there are apparently two limited partners in the Dodgers — guys no one ever knew about, but who provided considerable funds to the McCourts to buy the team — whose debt gets converted into “sizable equity” in the team if the McCourts default on the loans.

On the one hand this is shocking — and Josh Fisher does his excellent-as-usual job breaking down all of the implications, complete with an apt comparison to the Texas Rangers, who are poster children for what happens when good teams go into bad debts like the McCourts seem to have done.

On the other hand, I would not be at all shocked if multiple teams in Major League Baseball operated in just the same way, complete with family jobs, slush funds, silent partners and all manner of vehicles which, either intentionally or by happy accident, work to conceal the amount of cash a baseball team really earns and where its money is spent.  Baseball teams are almost all purely private companies, most of which are family owned. Despite their antitrust exemption and all of the tax money they consume in the form of public stadiums and the like, we know just as much about their operations as we do the corner gyro shop, and that’s just the way they like it.

The only difference here: we have a divorce case in which these machinations are laid bare.  And however distressing it is for Dodgers fans to see where all the money that should be going towards starting pitching is going, these revelations are educational and useful.

  1. J Rose - May 18, 2010 at 3:36 PM

    I just finished reading that piece. What a mess. No wonder Torre wants to bolt. Now Eithier is on the DL…bad times ahead in Dodgertown

  2. Joe - May 18, 2010 at 3:44 PM

    “I would not be at all shocked if multiple teams in Major League Baseball operated in just the same way, complete with family jobs, slush funds, silent partners and all manner of vehicles which, either intentionally or by happy accident, work to conceal the amount of cash a baseball team really earns and where its money is spent.”
    Yeah, that’s why Bud Selig won’t allow anybody to look at the books, even when he claimed all the teams were losing money.

  3. Jonny5 - May 18, 2010 at 3:53 PM

    Well, No duhhh. All the filthy rich have slush funds, secret partners, and pay their kids to do nothing. I thought that was a given..

  4. JCD - May 18, 2010 at 4:19 PM

    And get away with paying no income tax every year, nice how that works out for the rich.

  5. Keyser Sose - May 18, 2010 at 4:38 PM

    If the IRS ever precluded the legal entities that own sports franchises from being consolidated with other business enterprises of their respective owners, very few of these fat cats would aspire to be owners. Sports franchises are merely tax shelters designed to protect the avarice of the owners. Greed is good if you are one of them.

  6. Jonny5 - May 18, 2010 at 4:44 PM

    Awww man!! are you trying to kill me slowly??? I forgot about that!! What the hell… At least I can go home, drink plenty of beer, watch the Flyers an Phills tonight, and forget it again.

  7. Big P - May 18, 2010 at 4:57 PM

    Get your Dodger Dogs $5, parking $15 and pull up a chair for the Frank and Jamie Show! Jamie is going to emasculate Frank. The Dodgers are going to be sold…………….attention Mark Cuban!

  8. Big Harold - May 18, 2010 at 5:00 PM

    “All the filthy rich have slush funds, secret partners, and pay their kids to do nothing.”
    It’s not just the rich. I worked for three different car dealers when I was younger. And, while none of these owners could be considered “rich”, let alone “filthy rich” everyone had a kid or two working for the dealership and almost nobody could figure out what they did.

  9. Andy H - May 18, 2010 at 5:06 PM

    “Moreover, the club paid two of Frank and Jamie McCourt’s adult sons large salaries — $400,000 and $200,000 per year, respectively — for services that are undefined and could not be described by either Frank or Jamie McCourt”
    The bring a lot of intangibles, and really contribute to the office chemistry.

  10. Paul - May 18, 2010 at 8:35 PM

    If I’m the son making only $200,000 I’m pissed off at finding out my bro is getting twice as much. I mean what the?

  11. Gelardia - May 18, 2010 at 11:32 PM

    That’s why ya gotta love Steinbrenner. He puts as much of his PERSONAL money into the team as he wants, rather than lining his pockets with the TEAM’s profits.
    Of course, he did fleece us on the new stadium though.

  12. Team - May 19, 2010 at 8:45 PM

    Blah, blah, blah. More BS by Dodger haters looking for a story. Is Frank McCourt different from other owners. This reporter should stick to covering the Kardashians or the Rangers. The Dodgers are winning and will survive getting their dirty laundry aired out. Everybody has something to hide.

  13. DT - May 20, 2010 at 11:30 AM

    I don’t care how the owners spend money. I just want affordable tickets, video access to games, and high character players who put there all into every practice and every game, which requires a good farm system and a complete organization focused on developing character. Unfortunately, we’ve never had acceptable video access to dodgers games, and we’ve been going away from the other two ever since the O’Malleys divorced the Dodgers.
    Fox was a terrible owner, but at least had the right to be an owner. It is despicable that MLB let the McCourts own a team. They basically double-leveraged the purchase of the team and then sucked all of the cash flow out of it. How did Selig and the other owners let this happen and how do they look in the mirrors in the morning? Nothing that is happening is a surprise to people who’ve followed the Dodgers for any length of time…no Dodger fans wanted the McCourts to have their team, which is saying something coming off the whole Fox fiasco.

  14. JoeT - May 20, 2010 at 1:45 PM

    You don’t know what the f^ck your talking about. Fox had the right to be an owner, what does that mean. You may dislike Frank, but the Dodgers have had some of their best success under his ownership. Reporters like to beat on the Dodgers because of their anti-West coast attitude. If you had a wit of information in your head you would realise this. Go back to watching soccer and reality shows and leave baseball to men. Your not a Dodger fan.

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