The McCourts are Poster Children for the Credit Crunch-- Irresponsible Spending, Financed by Fans
by LA Taco on Nov 3, 2009 4:27 AM PST
62 comments
Jamie McCourt's divorce filing, with its claims of a net worth of $1.2bn, got many Dodger fans in a frenzy, as it seemed to suggest that the McCourts were rolling in dough while at the same time griping about paying Manny, selling top prospects for relatively paltry sums of cash, and raising ticket prices more than 100% in some sections over a 4 year period.
The truth is actually much worse than that.
According to posts on DodgerDivorce.com, the McCourts are even more heavily leveraged than originally reported. To buy the Dodgers, they used the following financial instruments:
- $150 million (Bank of America commercial loan). This piece is pretty straightforward. B of A loaned one or both McCourts $150 million and took a security interest in the club and its real estate. From the bank's perspective, this was a fine deal, because the bank was significantly over-secured. This means that if everything went terribly wrong, there would still be enough value in the collateral to cover the loan.
- Current status: taken out. See below.
- $125 million (Fox Sports [News Corp.] two-year note) Fox, in a testament to how desperate it was to get out of the Dodgers, financed nearly half of the purchase price itself. In exchange for the $125 million short-term loan, The McCourt Company granted Fox a security interest in the 24 acres of Boston land. If McCourt defaulted on the terms of its note to Fox, Fox could take the Boston property.
- Current status: In February of 2006, Fox foreclosed on the property, taking possession in exchange for forgiving the $145 remaining on the note. Evidently, the revenue generated by the property wasn't sufficient to cover the interest on the note. At or near the time of foreclosure, Fox discovered over $58 million in previously unreported obligations owed by the property. In further evidence of Fox's determination to be done with the Dodgers and McCourt, Fox assumed that extra debt.
- $75 million (MLB revolving note) This piece is a fairly standard revolving line of credit from MLB's fund for team owners. It is likely to require only interest payments.
- Current status: unknown.
- $40 million (Fox four-year note) This loan, another concession from Fox, was secured by McCourt personal assets. Presumably, this does not include the family residences, which were supposedly not offered as collateral in the Dodgers purchase.
- Current status: Taken out. See below.
- $31 million (Fox three-year convertible note) Like the last chunk, another Fox loan secured by McCourt personal assets.
- Current status: Taken out. See below.
Under the terms of the agreement, Fox was also obligated to kick in rebates of $50 million over the first two years of the financing, effectively reducing the purchase price to $371 million.
So, if you're counting at home, the above adds up to $421 million in financing...for a $371 million purchase. That, friends, is a little scary.
So we know that the McCourts did not have the financial resources to buy the team with their own money, but instead put their Boston assets as proof of wealth, and then secured bubble-era financing for the team -- they essentially got a 110% mortgage on the Dodgers. In the era of free credit, and given the Dodgers fine cash-flow, this may have looked like a good deal for the banks at the time.
But it didn't end there. Because of the appreciation of assets during the bubble economy, which took off just as the McCourts bought the team, the value of the Dodgers soared. Using this new valuation, the McCourts secured even more loans which they proceeded to spend on themselves, buying properties in Holmby Hills and Malibu now valued at $120m. The profits from the team, along with additional loans taken out against the Dodgers now $750m valuation, were clearly used to help finance the owners' increasingly lavish lifestyle. Read that again-- the money you spent on the Dodgers is what allowed the McCourts to live like Kings, even though their main asset was bought entirely on credit. To say it again, the Dodgers made the McCourts mega-rich, before that they apparently were quite wealthy, but not able to live the lavish lifestyle revealed in court documents.
It's one thing for a rich owner to not spend on his team lest he risk his personal wealth (See George Shinn, Donald Stirling, etc.). It's another thing entirely to become rich because of your team's passionate fans, and then use that newfound wealth to create a lifestyle, built on asset appreciation and cheap credit, that is unsustainable.
The other thing the investigation by DodgerDivorce.com reveals is that there is simply no way that the McCourts will be able to hold onto the Dodgers unless Frank is able to prove sole ownership of the Dodgers. In some ways, that would be an even worse scenario than the team being sold, because McCourt's asset base outside of the Dodgers will be depleted by the divorce, and he will become even more tight-fisted.
There are still more question than answers, such as why MLB would allow the Boston-based McCourts, who were rumored to be judged not financially sound enough to own the Red Sox, to buy the Dodgers; the true value of the McCourts non-Dodger assets, and the actual cash-position of the team, but I think it is safe to say that Dodger fans are in for a difficult road ahead.
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Kensai had this link the other day regarding their real estate holdings, from The Real Estalker.
by Eric Stephen on Nov 3, 2009 8:11 AM PST reply actions 0 recs
You take a few too many leaps of faith for me
I don’t see how any of this was unsustainable as you are suggesting—- unless you mean it is unsustainable due to the divorce. Otherwise, this isn’t like the real-estate bubble since there are plenty of houses in the country and only 30 professional baseball teams. The value of the Dodgers did go up during his tenure and those gains aren’t fake, he will realize those upon disposition. There are plenty of rich suckers who very much want into the “boys club” that is professional sports ownership (Limbaugh, Cuban.)
The thing that blows me away is, this all would have worked beautifully for the McCourts if they didn’t screw it up and get divorced. Once the broadcasting revenues came onstream, the valuation would have further sky-rocketed. I don’t think the McCourts could have held onto the team forever, they were employing a boiler plate private equity strategy of getting in, growing the revenue base (the broadcasting) and then exiting with a hefty profit. It would have worked.
Also, your post kept saying “see below” where these bank loans were taken out. I don’t see where those points are clarified. How were they re-financed?
by Michael White on Nov 3, 2009 8:33 AM PST reply actions 0 recs
I don’t think the McCourts could have held onto the team forever, they were employing a boiler plate private equity strategy of getting in, growing the revenue base (the broadcasting) and then exiting with a hefty profit. It would have worked.
That was the unsustainable part. Unsustainable doesn’t necessarily mean bad for the investor. PE firms legendarily gut companies by employing exactly the same strategy. However it is unsustainable from the fan’s perspective because the team would eventually have to be sold, especially as the debt service requires either greater loans, or a lifestyle change by the owners.
by LA Taco on Nov 3, 2009 8:50 AM PST up reply actions 0 recs
the see below
comes from the original article from dodgerdivorce.com
by LA Taco on Nov 3, 2009 8:50 AM PST up reply actions 0 recs
Speaking of leap of (lack of) faith
I take a little bit of issue with your statement that they used the Dodgers to secure home loans. I don’t know if that was necessarily the case. From court documents, their combined salary was somewhere between $7-8 million per year, and it sounds like (from the link in my comment above) they secured many of their home loans with their other homes as collateral.
by Eric Stephen on Nov 3, 2009 8:49 AM PST reply actions 0 recs
A. if this was true, why did the McCourts not live in this style in Boston? Frank McCourt was known there for one deal that turned his career around, not for being a lavish big-spender with multiple homes.
Their combined salary was paid by the Dodgers, and they secured over $60m in loans to buy the homes. Their other homes are not worth that amount combined, so could not be used as collatoral on loans that large.
by LA Taco on Nov 3, 2009 8:54 AM PST up reply actions 0 recs
should read “with multiple homes at the level we’re talking about in LA”. According to the other article, they bought two homes in Mass for a total of $25m. A far cry from the $130m spent in LA after the Dodgers purchase.
by LA Taco on Nov 3, 2009 8:55 AM PST up reply actions 0 recs
The house they bought for $4.5m in 1993 was sold in 2007 for $16m.
They also paid $19.5 million in 2000 for a home.
Their combined salary was paid by the Dodgers
Owners get salaries. This is not unique to the Dodgers.
by Eric Stephen on Nov 3, 2009 9:07 AM PST up reply actions 0 recs
Owners get salaries. This is not unique to the Dodgers.
Of course it’s not, but find me another owner in sports who used their 110% leveraged purchase (although digging around a bit, I found out that to relieve the Fox debt, McCourt gave his primary asset, the South Boston property to Fox) to move from the rich to the super rich. Find me another owner whose purchase of a team allowed them to become “high flyers” and take out enormous credit lines that could only have been secured by the primary asset. Perhaps this is the future of sports ownership but it certainly isn’t the past.
When you combine that fact with the fact that the Dodgers have a lower payroll than the Angels and the Cubs, the selling of prospects, the extreme rises in ticket prices… you see something which isn’t typical of the sports business.
by LA Taco on Nov 3, 2009 9:19 AM PST up reply actions 0 recs
I don’t take issue that their purchase of the Dodgers was highly leveraged and risky and has manifested itself in negative ways in some areas.
I only take issue with your claim that they used the Dodgers to secure their personal loans, which I don’t believe was the case.
by Eric Stephen on Nov 3, 2009 9:23 AM PST up reply actions 0 recs
There is no way to know, but $60m in financing is not a small amount of money even for the very rich. Their lifestyle changed completely after they bought the Dodgers— what changed other than the inflation of their worth? It would seem odd if they didn’t secure the loans by showing their primary asset. It’s not to say they hung their personal loans on the Dodgers, but the point is that buying the Dodgers is what allowed them to suddenly spend lavishly— directly or not.
by LA Taco on Nov 3, 2009 9:28 AM PST up reply actions 0 recs
Perhaps this is the future of sports ownership but it certainly isn’t the past.
Check out the Mara family . Welllington Mara’s business was the New York Giants and his wealth was created by his ownership in the club.
I can’t think of a more “old-school” sports ownership family than the Maras. And this happened back in the 1920’s. The idea of profit taking is not a concept created by the McCourts.
by Michael White on Nov 3, 2009 9:30 AM PST up reply actions 0 recs
There's a difference between devloping a business and creating value
and buying and selling things to make a quick buck.
Omallys vs. Mccourts
by Cool Dudes on Nov 3, 2009 9:36 AM PST up reply actions 0 recs
Ah but there is a key difference
Mara’s stewardship of the club is what created that value. The 100% rise in value of the Dodgers has not been because of thing the ownership has done over a long period, it has been the inflation of all assets and this class in particular.
by LA Taco on Nov 3, 2009 11:38 AM PST up reply actions 0 recs
When you combine that fact with the fact that the Dodgers have a lower payroll than the Angels and the Cubs, the selling of prospects, the extreme rises in ticket prices… you see something which isn’t typical of the sports business.
Show your work. Have you evidence that other clubs throughout the country aren’t engaging in similar behaviors? If not, these statements are pure conjecture.
by Michael White on Nov 3, 2009 9:40 AM PST up reply actions 0 recs
you can only compare the Dodgers with their peers, not every team in baseball. Are the Angles, Cubs, Yankees, Red Sox and Mets selling prospects? Deferring salary? Raising ticket prices without a subsequent rise in either total stadium amenities or a more expensive product on the field?
And pure conjecture is what I specialize in! :)
by LA Taco on Nov 3, 2009 11:37 AM PST up reply actions 0 recs
The homes in total are “worth” (price they paid) about $167 million. Getting $60 million in mortgages is not that hard, or at least wasn’t when they got them.
by Eric Stephen on Nov 3, 2009 9:22 AM PST up reply actions 0 recs
I found this on the internet, so it must be true
Not only has Malibu been crushed in sales volume, but the average priced sale dropped 48% from last year.
http://westsideremeltdown.blogspot.com/2009/08/malibu-real-estate-business-off-over-90.html
The problem isn’t the Dodgers, its all of the real estate, he hasn’t realized any of his losses yet, so his paper 1.2 billion is probably more like a real money 0-800 million (depending how leveraged he is).
by Cool Dudes on Nov 3, 2009 9:34 AM PST up reply actions 0 recs
Yeah
That is where the real hit will come for the McCourts
by Eric Stephen on Nov 3, 2009 9:35 AM PST up reply actions 0 recs
I agree in principal with this.
The fact that they are claiming the Dodger organization needs to pay them salaries and pay for their dirty pleasure travels shows how leveraged they are and how not on the level things are. They don’t want to spend any of their own money, because they probably have so few liquid assets. All of their assets are leveraged against something which means that they own too much, owe to many other people for it, and don’t have a lot left (or anything) after that, so they are using the Dodgers as an ATM to pay for their lifestyle, which isn’t quite what that says up there. I think it is complete BS for them to claim the organization is loosing money when they have so many extaneous expenses. Let’s ask a question here, would a new owner pay the McCourts $8 million to run the team? Let’s get serious, their combined actual value is probably around $120,000/year. I could probably get Phil and Eric for that money, and they would do a much better job.
I think what is also clear is the Dodgers are financial sound as they were able to sign Manny, O-dog, Wolf, etc with the economy impoding, and the fact that it is the asset that they are using to pay themselves. The value of the broadcasing rights will be built into the price of the Dodgers today. It is going to fly up when they return to the Dodgers, so that is already in today’s price, but was a big reason why he got a discount and loans to go with it. What is probably even worse is the fact that ALL of their real estate assets have plummeted, and have much further to plummet as the bubble is still deflating, so almost all of their property leveraged to buy the Dodgers will become the banks.
The Dodgers probably actually saved a lot of their money for those reasons as the price for the Dodgers hasn’t fallen of a cliff (but any price projected with the visions of luxury townhomes in the DS parking lot are now just pipedreams). But with the deflation of their real estate values, too much property they couldn’t afford and all the leveraging coming do at some point, lack of further financing available (remember the Fall of 2008), something probably would have had to give had they not gotten the divorce, with the divorce, this will shatter the whole house of cards.
That said, they’ll still have money after they sell everything, they just don’t have enough money to own what they do right now, and even if they sold everything else, I doubt they really even have enough cash to own the Dodgers and pay for what they spend. Hopefully this works out as they sell the team, and we get a new owner who runs the Dodgers without all of the BS costs, and can afford to invest in the organization without leveraging himself silly and doesn’t have to use the Dodgers for his paycheck (come on Eli Broad!).
by Cool Dudes on Nov 3, 2009 9:28 AM PST reply actions 0 recs
Of this I am certain
if all of a sudden the monthly expenses and job perks of every major league owner were made public, the McCourts would not be alone in the court of shame.
by Eric Stephen on Nov 3, 2009 9:34 AM PST reply actions 0 recs
But an owner should be collecting her profits, paying taxes on them, and putting them in the bank.
Owners shouldn’t need a salary.
Considering how many owners are “loosing money”, I’m sure many of them are paying themselves sallaries. The fact that they are not complete ridiculous, (but as previously stated 8 mil for the Mccourts for a baseball job is) is the fact that the government would go after them if they get too brazen.
I would be much happier with an honest owner like a Warren Buffet, who knows a thing or two about business and isn’t a crook.
by Cool Dudes on Nov 3, 2009 9:42 AM PST up reply actions 0 recs
How do you know $8 million is a ridiculous salary for an owner? Where are salaries of other owners published?
by Eric Stephen on Nov 3, 2009 9:43 AM PST up reply actions 0 recs
Would I like for an owner to take no salary, and even operate at a loss every year, pouring his or her own money into the team to make it better? Sure, who wouldn’t?
But outside of the seemingly angelic Arte Moreno, this type of owner isn’t exactly growing on trees.
by Eric Stephen on Nov 3, 2009 9:46 AM PST up reply actions 0 recs
Or former mayor Riordan
He worked as mayor for $1 a year. This is a man who understands business and has plenty of his own money. If only he had a passion for the Dodgers like he does old-school LA eateries . . .
by Seanny Rotten on Nov 3, 2009 2:11 PM PST up reply actions 0 recs
It is ridiculous because it isn't commiserate with their skills (or lack of knowlege of baseball)
It would be like me paying you and Phil 8 million a year to perform 300 heart transplants (when in fact you would actually just go hire other people who were actually qualified to do the job and pocket the 8 million).
The point is they should run the team well and take a small profit. I realize this is not how things in MLB have been done, but it should be, and yes, I would like to get an owner like that, we can dream at least right?
by Cool Dudes on Nov 3, 2009 9:51 AM PST up reply actions 0 recs
They own the damn team
They can do what they want. Why should they only take a small profit? I’m sure if you were in their shoes you would take a “meager” salary right?
Oh and by the way, it’s not like the quality of baseball has suffered under the McCourts. 2 NLCS appearances in two years despite the fact that they are being paid more than they are worth.
by Michael White on Nov 3, 2009 9:55 AM PST up reply actions 0 recs
Profits are from operating the business in a financially sound manner.
The owner keeps 100% of after tax profits.
They get 100% of the share. All profits go to the owner. The owner is entitled to the profits.
A salary is paid whether they make money (succeed) or loose money (fail).
If you are the owner, you should only make money if you succeed, not if you fail. That is what “ownership” is about. You are not “entitled” to any profit if you loose money.
by Cool Dudes on Nov 3, 2009 10:02 AM PST up reply actions 0 recs
Except that is not true
Plenty of businesses pay the owner a salary every year regardless of net profits.
by Michael White on Nov 3, 2009 10:13 AM PST up reply actions 0 recs
Especially when the owner is active in the operation of that business. He/she is entitled to a market value salary for the work they are performing. A seven-digit salary for the top executive of a business with a nine-digit payroll, nine-digit revenue, and eight-digit profits doesn’t seem unreasonable to me.
And Phil would probably piss off Plaschke more than Frank does. :)
by David Young on Nov 3, 2009 8:07 PM PST up reply actions 0 recs
What is a bit unusual is that the McCourts put both husband and wife into top executive positions, drawing two salaries. In a community property state where they are effectively joint owners, that does feel a little like double-dipping.
by David Young on Nov 3, 2009 8:11 PM PST up reply actions 0 recs
He is not entitled to anything other than the profits
The owner generates the revenue. He makes money, he gets the money. He is not “entitled” to money. He has to make it.
He has to make money to get paid or sell the organization.
If he makes 40 million per year in profit, pays himself 10 million, bills 10 million in frivolous expenses, then his profit is now 20 million. There is no net sum gain, so it makes it is pointless.
Giving yourself a high salary in this situation shows: 1. you need to take money out of your asset and profits are not enough for you or 2. something funny is going on.
by Cool Dudes on Nov 3, 2009 9:41 PM PST up reply actions 0 recs
Dude, if you own and operate a private business, you draw a salary commensurate with the work you perform for that business. If you, as the owner, act as the CEO of a multi-hundred-million dollar compary, you draw a salary similar to other CEOs of companies of that financial size. Every CPA in this country would call you a fool if you didn’t draw a salary under those circumstances. (If the owner isn’t an active participant, he is really the sole investor, entitled to profits, but no salary because he doesn’t do anything except put up – or obtain – the financing.)
Imagine a dentist with her own practice big enough to require two dentists to see all the patients. The business pays the salary for two dentists, with the owner happening to be one of them. This is what she will support herself and her family on. In a lean year – let’s say a recession where the insurance company is getting really tight on payments – the business may suffer, but the dentist/owner’s family will not starve or lost their house just because the business lost money that year. That is how it works in real life.
by David Young on Nov 4, 2009 12:40 AM PST up reply actions 0 recs
So he needs the money to feed (support) his family?
He’s more leveraged than I thought :)
I don’t get where the dentist got the money to pay himself a salary if he had more expenses than income? Because he isn’t getting it from the bank in this economy.
It would be called going out of business which is exactly what is happening to 1000s and 1000s of businesses across the country right now.
The fundamentals don’t change.
Expenses-income = profit
Expenses – Income – Owner salary = profit
His CPA may tell him how to best avoid paying taxes legally, but billing a trist to Europe (which I assume would have been OK before the divorce) to the Dodgers is DEFINITELY ILLEGAL as it was not a legitimate business expense. Frank basically busted her from what I’m sure they’ve been doing for years. Now that they have lost credibility, I’m saying everything else is suspect, including the salary the have been drawing. If I were the banks loaning him money or the IRS, I would be looking at this very carefully.
by Cool Dudes on Nov 4, 2009 10:39 AM PST up reply actions 0 recs
Plenty of businesses have bank lines of credit
Including the dentist and the owner of the Dodgers.
You speak of fundamentals, but your dismissal of bank financing as unobtainable in this economy is just wrong. One would assume that both the dentist and the baseball team had a bank line of credit in place before the current economic downturn. Assuming that 1) the bank did not go out of business and 2) the debtor was not in default, the lender would not have any legal grounds to keep the Borrower from drawing on the line. Therefore, the delta between losses and owner’s salary would be funded by the Lender, regardless of “the current economic environment.”
Moreover, if there was no bank line of credit, both the dentist and the McCourts would simply cut expenses enough so that they could fund their own salary. For the dentist, they would fire the other dentist. There is no chance that the dentist would pay somebody else a salary, and not take one themselves. No business owner would do that. Therefore, the Bank is really providing the liquidity to allow the Owner to continue to pay other salaries, because as I said, there is no way the Owner is going to forfeit their salary.
You can make the case that the responsible business owner should curtail their salaries during years of net losses. But the idea that a business owner would forfeit a salary altogether during lean years is rediculous.
by Michael White on Nov 4, 2009 10:53 AM PST up reply actions 0 recs
Now at least you are getting closer to what Frank SHOULD do
1. FIre wife CHECK
2. Fire Self
3. Sell Team to pay for sweet young thing to piss Jamie off
by Cool Dudes on Nov 4, 2009 11:34 AM PST up reply actions 0 recs
Oh and by the way, it’s not like the quality of baseball has suffered under the McCourts
Don’t tell that to Bill Plasskey.
by Seanny Rotten on Nov 3, 2009 2:12 PM PST up reply actions 0 recs
Of course
but my point is that the Dodgers ownership has one real asset (the other key asset, which turned out to be worth less than advertised was given to Fox as they defaulted on the Fox loan). That is not historically true of sports ownership. We’re also living in a period where the value of the Dodgers, because of the economy has gone up 100% in 4 years, which is the real source of wealth, not long-term stewardship or value creation which may or may not be true of other owners.
by LA Taco on Nov 3, 2009 11:40 AM PST up reply actions 0 recs
You don't think the capital improvements
they made to DS have helped build the key asset? You make it sound like all they have done is plunder and party. No one has put as much money back into Dodger Stadium as Frank McCourt has done, have they?
Patience is for those who die waiting for something to happen
by Phil Gurnee on Nov 3, 2009 7:41 PM PST up reply actions 0 recs
From the reference he borrowed the money and put up some of Dodger stadium as collateral
In May 2005, McCourt announced a new, $250 million 25-year note which took out B of A and what remained of the debt to Fox (after the foreclosure on the Boston property). This increased the debt load to $521 million on a $371 million purchase. This financing, known as a private placement, was provided by an unidentified group of institutional investors, such as pension funds and insurance companies. The terms of the loan—5.66% fixed for 25 years—are relatively favorable to McCourt. The collateral for this new loan was reportedly the 300 acres of real estate surrounding Dodger Stadium—not the club itself.
So he borrowed, or leveraged Dodger Stadium assets, so basically the bank paid for the renovations, and he is going to pass on the debt to the next owner, so unless he owns the team for the next 25 years, I’de say the the O’Malley ’s who built the stadium would be the biggest capital expenditure. Fox was the only other owner.
by Cool Dudes on Nov 3, 2009 9:32 PM PST up reply actions 0 recs
Of course the bank paid for the renovations
just like you would use a 2nd to pay for your new kitchen. Who uses cash to pay for capital improvements?
Patience is for those who die waiting for something to happen
by Phil Gurnee on Nov 3, 2009 10:41 PM PST up reply actions 0 recs
Of course it’s helped build the asset, but has it made the value of the Dodgers double? Those were market forces outside of his control. While it’s true that the value of sports teams has climbed steadily for 30 years, I think it’s irresponsible to look at the present valuation as one that will last forever. Too much uncertainty in the economy to justify it.
by LA Taco on Nov 4, 2009 7:09 AM PST up reply actions 0 recs
Tell that to the Cubs
their selling price is why the Dodgers have a valuation north of $800Million. Finite supply
Patience is for those who die waiting for something to happen
by Phil Gurnee on Nov 6, 2009 2:57 PM PST up reply actions 0 recs
One thing that definitely couldn’t happen now though— the McCourts could not buy the team even if they were still a couple. Maybe if they would’ve saved some of the money they took out from the team and only bought, say a modest $10m home. :)
by LA Taco on Nov 6, 2009 4:47 PM PST up reply actions 0 recs
The McCourts have their first court date
On Nov. 5th, correct?
What is supposed to happen then?
by pdotmac1 on Nov 3, 2009 12:31 PM PST reply actions 0 recs
Remember remember the 5th of November . . .
Frank shows up in a Guy Fawkes mask and then shaves Jamie’s head.
by Seanny Rotten on Nov 3, 2009 2:13 PM PST up reply actions 0 recs
Basically all of these finances has made me see that McCourt basically planned to "flip" the team
Probably after he did the major mall type development and paved the way for condos on site. All that crap about winning was lip-service and to preserve the dignity of the organization for when he sold it. More and more I’m thinking this divorce is a good thing.
by Cool Dudes on Nov 3, 2009 9:47 PM PST reply actions 0 recs
Nothing against Frank
but in the best interest of the Dodgers I would think that we want the court to find for Jamie thus forcing Frank to sell the team. Finding a buyer will be a different story. Frank bought the team when the country was full of money, how many ego centric billionaires are interested in owning a baseball team? We couldn’t find one before which is how we ended up with Frank.
Patience is for those who die waiting for something to happen
by Phil Gurnee on Nov 3, 2009 10:43 PM PST up reply actions 0 recs
ego centric billionaires are interested in owning a baseball team
1. Mark Cuban
Not sure that I would want him though; seems like he would be exasperating.
by David Young on Nov 4, 2009 12:30 AM PST up reply actions 0 recs
Herein lies the contradiction— the Dodgers are “worth” $750m, double what he paid. But who will pay that much in this economy, especially with the potential to lose money on the team if fans cannot afford to go as often if the economy in SoCal continues to get worse?
This is what I think was irresponsible about living high on the wealth created by the valuation of the Dodgers. Paying themselves high salaries is not really the issue, those salaries for example would only cover the private jet budget for 2 years.
by LA Taco on Nov 4, 2009 7:11 AM PST up reply actions 0 recs
Just my gut feeling
I wouldn’t worry about lack of buyers. Sure, the economy is weaker than it was when Frank bought it, but the light at the end of the tunnel (the television revenues) are a lot closer now. And buying a baseball team puts you in pretty elite company, its the egotistical billionaires dream. And its not like we’re talking about the Columbus Blue Jackets, its the Dodgers. I think there will be plenty of buyers.
by Michael White on Nov 4, 2009 7:41 AM PST up reply actions 0 recs
I tend to agree with that. There is also the law of supply and demand. There are only 30 MLB clubs, so ownership is a pretty exclusive club, always with a small supply of availability.
The commenter formerly known as El Lay Dave.
by David Young on Nov 4, 2009 1:54 PM PST up reply actions 0 recs
I'm sure there will be buyers
but what will the price be? In the past Forbes’ estimates have been pretty accurate, but in the current economy, and also given the circumstance of the sale, will the valuation hold up? It will be an interesting test.
by LA Taco on Nov 4, 2009 2:35 PM PST up reply actions 0 recs
i do not reaaly care what the $ value of the team is
if it is community property as long as the value is too high for either mcourt to buy out the other and we can get some one with enough wealth and cash flow to allow the team to operate independently from other assets.
If it is not community property then the team is not for sale.
by MammothDodger on Nov 4, 2009 3:08 PM PST up reply actions 0 recs
No I don't think so
Its not like the revenue generation has shot up 100% since the McCourts bought it. The real estate thing is a thesaud.
But there are 0 comps, so you never know, emotion also plays into the price, because, its the freaking Dodgers man.
by Cool Dudes on Nov 4, 2009 3:50 PM PST up reply actions 0 recs
Comps
The Chicago Cubs, also an iconic franchise with an iconic stadium, just sold recently for $845M in this economy with a motivated seller.
The commenter formerly known as El Lay Dave.
by David Young on Nov 4, 2009 5:37 PM PST up reply actions 0 recs
I think it will be far more important in terms of the sales price that there be multiple bidders, as compared to the circumstance of the sale. How easy or difficult it will be for buyers to come up with the financing will be relevent, I think the main effect of the “current economy”; however, money still isn’t expensive and the Dodgers make for pretty nice collateral.
The Dodger Stadium upgrades, including all those expensive seats added next to the field, and the new Dodger Spring Training complex in Arizona have probably added some significant value. The fact that Fox owns the broadcast rights for three or four more seasons hurts though.
The commenter formerly known as El Lay Dave.
by David Young on Nov 4, 2009 5:36 PM PST up reply actions 0 recs
The odds are low that there will be housing built on Dodger Stadium property
I found this comment by Bob Timmermann at Dodger Thoughts (Bob is always right):
The renovations are being planned because there are only so many ways the McCourts can get more money out of the park. As I mentioned in the older thread, the area is not zoned for housing, the deed to the property prohibits housing, and the conditional use permit prohibits housing.It would take a considerable amount of lawyering to change the conditional use permit and the deed with plenty of opportunity for opposition to arise. And if it was going to happen, why hasn’t it happened already?
by David Young on Nov 4, 2009 12:29 AM PST up reply actions 0 recs
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