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Bud Selig threatens to terminate Dodgers from MLB if Frank McCourt does not sell

Sep 25, 2011, 9:18 AM EDT

mccourt reuters Reuters

The only thing that can save current Dodgers owner Frank McCourt is a high-dollar and stable new television contract — one that will bring financial security to a club buried in bankruptcy court.

Well aware of that fact and still craving an ownership change, Major League Baseball commissioner Bud Selig has made his most aggressive move yet, threatening to terminate the Dodgers from the league if McCourt does not sell the team. This according to Maury Brown, founder of The Biz of Baseball.

Selig would never actually go through with it. He’s not going to give the boot to a franchise with a cherished 128-year history and further alienate an already frustrated fanbase. But the threat of termination alone is sure to scare away any potential investors who might have helped McCourt climb his way back to respectability. And that includes television networks.

McCourt is planning a response, the language of which could turn ugly now that the 58-year-old divorcee has been backed into a corner. But what’s been apparent all along is now even more indubitable: McCourt is cooked. Fried. Roasted. Because the club he’s owned since 2004 is nothing without the league it’s part of, and landing a television deal is going to be near impossible for a team labeled — even falsely — as doomed.

  1. paperlions - Sep 25, 2011 at 9:49 AM

    The thing about the TV rights is that they are already sold for 2012-2013….meaning any new TV deal won’t take effect until 2014 and for that to help McCourt now he would have to take a lower value contract in exchange for a lot of up front money….no one is going to give both top dollar and payments that total hundreds of millions of dollars more than two years before they start airing games. Using future revenues to change the current situation from dire to horrible is no way to stabilize a franchise or maintain its value. Indeed, selling those rights will substantially decrease the value of the franchise as it will prohibit the formation of a RSN by the owner (which is what McCourt would have done years ago if he didn’t have his head up his ass).

    • bigleagues - Sep 25, 2011 at 12:18 PM

      Nations 2nd largest media market + RSN = no brainer

      Unfortunately for the Dodgers, McCourt is without a brain.

  2. Old Gator - Sep 25, 2011 at 10:39 AM

    What’ll be really interesting will be how MLB deals with McCourt the landlord once they do extirpate him as an owner. If he sells the team, he may have some serious money in his pocket to wage a prolonged legal battle to enforce his right to level exorbitant parking fees, concessionary prices and/or even attempt to blockade the team inside its own ballpark. I don’t think we’ve seen the best part of this saga yet.

    • paperlions - Sep 25, 2011 at 10:42 AM

      Who will buy the team but not the stadium, parking lots, concessions and everything else that goes with it? Without the stadium and such, the team itself has no real value.

      • Jeff M. - Sep 26, 2011 at 7:19 PM

        Exactly, lions. The team has only liability, and no potential for revenue (ie, you need to pay the team, but the team doesn’t actually generate revenue – the tickets and concessions and parking, etc are the revenue generating entities).

        I can’t imagine why ANYONE would buy just the team without the stadium and tho other aspects included.

    • jwbiii - Sep 25, 2011 at 11:36 AM

      I can’t see how that would happen. The shell companies which own the stadium, parking lots, and adjacent vacant land have also declared bankruptcy. A very compelling argument can and will be made that the team, stadium, and parking lots are worth more together than the separate pieces are worth.

      • Old Gator - Sep 25, 2011 at 2:37 PM

        Are you sure about that? I had read quite a bit about how McCourt’s separate ownership of the shells insulated them from an MLB takeover – even as recently as a few weeks back, during some discussion of the maneuvering in the divorce trial.

        In any case, paperlions, that’s partly the point, assuming the shells are not in bankruptcy and the federal judge hasn’t determined to regard them as collective assets of McCourt for purposes of the bankruptcy filing. McCourt can leverage his claim that he’s got the team up for sale against precisely the reality that the stadium and lots are a deal-breaker since, in reality, he has no intention of selling unless the courts put a gun to his head.

      • paperlions - Sep 25, 2011 at 7:28 PM

        My point was, if he tries to sell only the team, he won’t get much for it without all of the accessories that make the money…the team itself doesn’t make money, parking, concessions, and the stadium make money. So there is not way for McCourt to “have some serious money in his pocket” and still be the “landlord” of the team….because the team isn’t worth anything without the money-making attachments.

      • jwbiii - Sep 25, 2011 at 7:36 PM

        Old Gator, The stadium company is in bankruptcy. Here is the filing:

        http://www.scribd.com/doc/58811449/Los-Angeles-Dodgers-LLC

        On p. 4, LA Real Estate Holding Company LLC and LA Real Estate LLC file for bankruptcy and are listed as affiliates. LA Real Estate LLC owns the stadium, the parking lots, the ticketing company, and the adjacent property.* I’m not a lawyer, but it seems that the judge should be able to and should order that they be sold together.

        Vincent E. Scully is listed as a creditor and is (was) owed $152,778 (p. 14).

        *Here’s that messy org chart:

        http://3.bp.blogspot.com/-rObR2tyXn6k/TiCRV02VEeI/AAAAAAAAAco/PVsVsODcyeQ/s1600/updated+org+chart.gif

        Interestingly, LA Media LLC was not included in the bankruptcy filing, so it seems that it is possible that bankruptcy judge could order that the team and the stadium company be sold but may not be able to order that the media company be sold, allowing Frank McCourt to pocket the 2012 media revenue whether he owns the team during the 2012 season or not.

      • Old Gator - Sep 25, 2011 at 8:40 PM

        Fair enough – I see where my thinking was a bit tangled on a Sunday morning before the infusion of liquid pacemaker. However – here’s another scenario, one that Selig might seriously consider as a first step: suppose MLB (and again, until I know whether the shell corporations actually were part of the bankruptcy filing or not) submitted an offer for the team that the creditors’ committee, trustee and judge accepted, leaving the league owning the team a la buying Scrooge McLoria out of the Expose/Gnats (a transaction that will live in infamy here in Macondo as well as in Montreal). I grant you that negotiations and/or puffing and posturing with regard to the stadium and lots would be involved, but there are still plenty of ways to arrive at a halfassed resolution that meets Bud Light’s primary goal of getting rid of McCourt as team owner without necessarily solving the property issue – and, at the same time, putting enough money back in McCourt’s pocket to keep him there as league gremlin for years to come.

  3. mogogo1 - Sep 25, 2011 at 11:32 AM

    Nice that they’re getting tough with him now, but it would have been so much easier if MLB had done a bit of background checking before letting McCourt in as an owner. Even without the ugly divorce, he was bound to eventually have financial problems because he never really had any money of his own.

    • socaldental - Sep 25, 2011 at 11:40 AM

      You are SOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

      RIGHT

  4. F.R. Eeman - Sep 25, 2011 at 11:55 AM

    My first reaction is to complain about another of Selig’s sagas. What good will that do though? Instead – having once been a left fielder without anything but a dream, I figured I’d toss in an idea from the warning track, way out of left field.

    People love sports. Sports love places where there are many, many people. It offers the chance for many, many advantages, including crowds, advertisers, money and reputation. Cities love sports for the same reasons. Cities also have many, many kids who grow to love sports. The same many, many kids have less opportunities to get educated, thanks to the way the Great Recession (and governments) have treated the many of us who work our butts off,

    Here comes the throw from left field: I suggest that Los Angeles County (not city) establish an LA Dodgers Sports Authority, request a matching grant from the federal government (private / public partnership) that puts the Dodgers into a Public Trust for 30 years. All revenues from the team are placed in this trust, with operating budgets that deliver scholarships, basic education and / or grants to the county’s schools for a thirty year period. The many people who have “paid into” the legacy of the Dodgers over the years will, in effect, be paying into their own educations without it being a “what’s next” tax burden every 18 months or so.

    This toss from the deepest part of the warning track will have as many objections as those who said Manny can’t play the position…well, maybe not that many. I have many more details that could be argued (I’ll bet you do too) but the point is that Major Baseball has a need, the LA Dodgers have a legacy, Frank McCourt has no value to offer and the many, many of us who wish we could just watch the boys of summer without worrying whether we’ll get caught in the traffic jam of their fast lane egos would enjoy the game. Instead of their gamesmanship.

    Someone other than the current players in this court-ordered field of schemes needs to get in the on-deck circle and be ready to go on offense. It should be the people of Los Angeles.

    • cur68 - Sep 25, 2011 at 12:18 PM

      What a great idea. Too bad it’ll never happen. Seems very ‘socialist’ you see for a people, who support the team, buy the gear, root for it, and spend their money on it to actually directly benefit from that team as opposed to some fraud fat-cat sleazebag and his equally sleazebag wife from Boston. The team will wind up in the care of another of Bud’s ‘friends’. But, in a fair world, your idea is what should happen. It’s a pity it won’t.

    • Cris E - Sep 26, 2011 at 2:57 PM

      People of LA: …and we take this money and put it in a trust for everyone.
      Selig: That sounds noble. Tell me again who owns the team?
      People of LA: We do. We the people. The Trust.
      Selig: So you’re saying “the people”? The people could, for example, see the books?
      People of LA: I suppose. Is that what owners do? We’d do that.
      Selig: Er, I think I’ve heard everything I need to. Thanks for sharing the dream. We’ll be in touch.

  5. tshan1342 - Sep 25, 2011 at 12:37 PM

    These guys don’t care about the fans, they only care about saving face, why would Selig kill any chance of the team getting finances to operate. Follow the money and see who is behind Selig’s actions

  6. dirtyharry1971 - Sep 25, 2011 at 12:42 PM

    terminate the dodgers from MLB? Why wont someone terminate Bud as comish before he ruins baseball some more

  7. gatordad - Sep 25, 2011 at 12:49 PM

    After McCourt screwed Vero Beach the last year in spring training, I don’t care how badly he gets it from MLB. This guy is a total DB and I cannot believe that Bud even allowed him to buy this team.

    • Old Gator - Sep 25, 2011 at 3:01 PM

      Agree that McCourt is an asshole, but let’s face it: there’s no one left in the NL west (and few in the central) for it to make any kind of sense for the Dodgers to remain in the Grapefruit Circuit. From a purely economic standpoint, moving the team’s spring facilities west makes perfect sense. Any new owner of the team was just as likely to look at the situation and wonder why they hadn’t moved to Phoenix fifteen years ago – and then move them there himself.

      It would have been nice, though, if Congress had intervened in civil aviation law twenty five or thirty years ago to make some sense out of that classic American obscenity called product liability law, Then at least you’d still have Piper and a healthy private aviation market.

  8. take2la - Sep 25, 2011 at 12:52 PM

    The pissing contest between Selig and McCourt ISN’T doing the league OR the Dodgers any good.
    I’m no fan of McCourt but I think in the interest of the game there needs to be a mutual decision to get this thing done QUICKLY.
    …and we all know the Dodgers will only benefit from a quick resolution and they can only get better because of it.

  9. adubman - Sep 25, 2011 at 3:10 PM

    Looks like Selig feels exactly the same as you. MLB’s move WAAAAYY ramps up the stakes; Expelling one of the league’s charter members effectively ending the franchise (however temporary) is a scarlet letter on all parties and will only tarnish the sport. Selig’s betting the house Frank will fold and take the $$$ & run. Plausible approach, but not without risk: McCourt could attempt to counter or stall further dragging matters out. One wonders how many more “billable hours” old Frankie got left in his reserve. I expect this will be the determining factor and eventually, things will move forward with new ownership in place.

    Selig got himself in this mess and now he’s furiously attempt to wiggle out. And in doing so, he’s flailing.

  10. tuftsb - Sep 25, 2011 at 5:34 PM

    Selig shoud draw up a new 2012 schedule that does not include the Dodgers – and tell the union that MLB will mandate a one player increase in rosters per team to make up for the loss of the franchise.

  11. originalsmasher - Sep 26, 2011 at 7:37 AM

    Let them go! I’m so sick of the Dodgers & their arrogant, stupid fans. Not to mention a joke of a city when it comes to sports. Gee!..I wonder why there’s been no football in this most egotistical of big cities!? At least ban them from the league for a few years.

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