Thursday, April 21, 2011

Give It Up Frank

Frank McCourt has made a short statement about yesterdays action against him.
"Major League Baseball sets strict financial guidelines which all 30 teams must follow. The Dodgers are in compliance with these guidelines. On this basis, it is hard to understand the Commissioner's action today."
For those who keep a close eye on the Dodger, I don't think its too hard to understand. The team is over-leveraged with precious equity being spent on real estate instead of Baseball operations. The franchise deserves better, and no amount of crying or threats of an impending lawsuit against the league can stop what is already ongoing. Bud Selig has a large amount of control and aims to use it. And as Craig Calcaterra suggest at Hard Ball Talk it is doubtful McCourt will persevere.

Good luck. My understanding of the matter — and someone, please, tell me if I’m off base here — is that Selig can basically do anything with a team and its owner (i.e. approve his bid, kick him out, take control over his team, etc.) as long as he has the support of 3/4 of the other owners. Selig rarely does anything unless he has consensus. For him to have taken over the Dodgers means that he almost certainly has the backing of baseball’s other owners.

I’m guessing that the threat of legal action is bluster. And even if it isn’t bluster, it’s doomed to failure. Frank McCourt signed an agreement with Major League Baseball when he bought the Dodgers. I’m guessing what happened yesterday is provided for in its provisions.

I also understand that his ex-wife had something to say about the matter, but, frankly, I don't care. She's a fool who should have made a reasonable settlement way before this incident. At this point, the value of her proclaimed 50% ownership has diminished greatly. When Selig gets around to finally selling the team it will likely not go to the highest bidder- just to the bidder MLB believes would be a more viable owner of the team. On top of that, don't be surprised if the other owners have to chip in some cash in the meantime if the financials are as bad as Selig suggest. That would further degrade any equity that would eventually go to the McCourt's- they will still, nevertheless, walk away richer than when they first came in.

Ultimately, we are all losers in this mess. My hope is that a local group can come in, pay a reasonable value and operate the team the way it should be.

1 comment:

  1. Given Frank's history, I think Craig Calcaterra's more considered piece of this morning is the one to read. Frank means war. If the other owners take him down, he's not going to leave but that they take on a lot of his debt.


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