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Bud gives Frank McCourt the high hat on FOX TV money

Feb 25, 2011, 8:50 AM EDT

Frank McCourt

Frank McCourt needs money to keep the Dodgers running. Fox wants to loan it to him, with the team’s TV rights as collateral. Bill Shaikin reports, however, that Bud Selig has rejected a proposal under which FOX would have loaned $200 million to Dodgers in a deal that would have met both of the parties’ objectives.

On one level you want to feel bad for McCourt. He has something of value: the rights to broadcast Dodgers games.  He has someone willing to give him money for it: FOX.  But Bud says no. He says no even though he’s certainly willing to let Fred Wilpon leverage his TV Network — the most valuable property of which is baseball rights — in order to get out from under his Wilpon mess.

The difference, I think, is that Frank McCourt has lost all credibility when it comes to taking on debt. Why would you let him mortgage anything else? Especially when, if he defaults, it will result in a TV network getting the rights to broadcast baseball games at bargain basement rates.

We’ve talked more about the Wilpons lately, but I think Frank McCourt is in more trouble.  At least the Wilpons have some assets they could sell to raise cash.  McCourt put everything in hock even when times were good, leaving nothing of value now.  And now he’s stuck.

  1. phillysoulfan - Feb 25, 2011 at 9:33 AM

    So then why doesn’t he just extend the deal with Fox for the same time period at the same money? Selig doesn’t have any say over that.

  2. bloodysock - Feb 25, 2011 at 9:35 AM

    I agree that McCourt is in more trouble and he does not have the overall liquidity the Wilpon’s have. I think part of the issue is that Wilpon is leveraging SNY while McCourt is trying to leverage the team with the sum of the existing and proposed debt violating baseball’s debt limits.

  3. chrisny3 - Feb 25, 2011 at 10:14 AM

    He says no even though he’s certainly willing to let Fred Wilpon leverage his TV Network — the most valuable property of which is baseball rights

    This is misleading and overly simplistic. The total valuation of SNY is immensely larger than the broadcasting rights of any single MLB team, even if the broadcasting rights of the Mets may be SNY’s single biggest property. The total infrastructure already in place in a RSN to easily generate revenues off the broadcasting rights makes a big difference, as is the ability to create and package together a stable of related and complementary sports programming.

    Selig’s love of Wilpon may have something to do with how he treats each situation, but I would bet it has more to do with SNY being a large and successful RSN vs. McCourt trying to leverage mere broadcasting rights (on top of his other debt).

    • paperlions - Feb 25, 2011 at 10:45 AM

      Agreed.
      .
      In addition, borrowing against SNY (or selling off some of their interests in it) do not affect the value of the broadcast rights for the Wilpon’s or for potential future owners. In contrast, if McCourt is allowed to borrow against future broadcast rights and still has to sell the team (which seems highly likely), then the fact that those broadcast rights are already sold for X number of years severely effects the value of the franchise.

      • chrisny3 - Feb 25, 2011 at 12:06 PM

        Good point.

        Also, I believe that MLB does not have the same control over an RSN that they do over a team and its finances. So, even if Selig wanted to intervene with the Wilpons’ borrowing against SNY, I’m not sure he had the authority to do so.

        An RSN is like a separate side business. It’s like Ilitch also owning Little Ceasars. Selig couldn’t and wouldn’t try to interfere with how their pizza business is run. Granted, there are probably elements of an RSN that MLB can exercise some control over — such as digital streaming — but that control is very limited to specific baseball-related niche areas of an RSN –and doesn’t include its overall financial operations. So, in terms of leveraging an RSN vs. leveraging broadcast rights, we’re rally talking apples and oranges here.

      • shlomo1977 - Feb 25, 2011 at 1:56 PM

        Great point Paperlions.

        Selig surely sees the writing on the wall and is protecting the future revenue stream of the next Dodgers owner.

  4. SmackSaw - Feb 25, 2011 at 10:35 AM

    Wow, B.S. did something right.

  5. Old Gator - Feb 25, 2011 at 10:36 AM

    Well, it’s like Wilpon says, you know I’m a sportin’ man. I like to lay an occasional investment. But I ain’t that sportin’. Let’s say I invest in a ponzi scheme promisin’ 1200% retoins. I think I got a right to expect that scheme to pay off at 1200%. But every time I lay an investment wit dat son of a bitch Boinie Madoff, the rates go straight to hell. Institutional money comes pourin’ in. The sheenie knows I like a big retoin, so he’s sendin’ me advance notice of my pwofits and oijin’ me to witdraw da money oily…..

    • docktorellis - Feb 25, 2011 at 11:02 AM

      Gator for the win!

      • Old Gator - Feb 25, 2011 at 11:55 AM

        I revel in the accolades of the cinema literate.

    • mplsjoe - Feb 25, 2011 at 12:47 PM

      Look into your heart, Bud!!

      • Old Gator - Feb 25, 2011 at 12:51 PM

        Bud-dy…don’t let me go broke out here in the parking lot like a dumb proletarian…..

  6. heynerdlinger - Feb 25, 2011 at 11:08 AM

    Isn’t a big part of the difference here that Jamie McCourt technically owns half of the Dodgers? I mean, the team (i.e., Frank) can’t sell team assets to buy out Jamie because she technically owns half of any proceeds from that sale?

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