Sunday, May 08, 2011

Russ Newhan: I Told You So

Former LA Times national baseball columnist Russ Newhan has a nice piece over at ESPN.com, reminding us that he, among many others, thought from the start that the McCourt ownership decision was disastrous. An excerpt:

In the fall of [2003], the McCourts began serious discussions with Selig and other baseball officials regarding the Dodgers. Jason Reid, then covering the team for the Los Angeles Times, partnered with the then-national baseball columnist at The Times (yes, myself), to repeatedly produce stories regarding the McCourts' suspect resources based on material from sources familiar with the talks but not authorized to discuss them.

In addition, both of the McCourts' hometown newspapers raised questions about their finances. [Sax's note: Newhan's editor must have cut the Boston Herald reference for space reasons, I assume.]

In the Boston Globe, for instance, business columnist Steve Bailey began what he cynically billed as the "Frank McCourt Appeal, as worthy a cause as you will find in Boston. Our motto: Please give so he can go."

Bailey also wrote: "Few in this town have talked the talk more and walked the walk less. ... He was going to buy the Red Sox. He was going to build a new Fenway on the waterfront. Instead, 25 years after McCourt bought his South Boston land from a bankrupt Penn Central, what we have down there is acres of parking lots."

Ultimately, Selig's support of the McCourts' highly leveraged purchase of the Dodgers for $430 million from Rupert Murdoch's media giant News Corp. came as a shock.

Murdoch, with his regional networks up and running, was anxious to have his company end six years of tumultuous Dodger ownership, an appropriate prelude to what has followed. [...]

Ultimately, claiming annual Dodger losses of $40 million, Murdoch was willing to loan the McCourt's $145 million of their $430 million purchase price, accepting as collateral the Boston parking lot that McCourt and his wife owned and which News Corp. ultimately foreclosed on and sold, according to court documents.

In addition, multiple sources told me, Murdoch pressured Selig because Murdoch had at that time also talked Team McCourt into accepting an undervalued, multiyear TV contract that may have saved Murdoch as much as $500,000.

So McCourt has a history of undervaluing TV contracts? Isn't that exactly what he's hoping to mortgage today, in order to get the $300M liquidity from Fox? Hmm.

The point of Newhan's article is that Selig deserves some of the blame for this McCourt mess, that the signs of McCourt's overleveraged financial status and personal smarminess were there from the start. On the flipside--and not that I'm sticking up for Frank by any means--he did preside over an era where the Dodgers made more playoff opportunities than we'd seen in a while. In any event, Newhan is right in saying that Selig is tied at the hip to this debacle. He got the Dodgers in with this guy, and it's going to be him that's going to have to get him out of here.

I suppose the real lesson, then, is to make sure that the next owner of the Dodgers, which hopefully comes soon, will be one who doesn't show the fatal flaws that Frank McCourt had. The Dodgers need an owner who is financially stable and will "walk the talk." In fact, perhaps Kobe and Phil will see someone like that on Monday night...

3 comments:

NicJ said...

You could argue that the dodgers would probably still be hovering around mediocrity if Manny never forced his way out of Boston. Don't give McCourt too much credit.

Dean said...

Let us add "local" to the list of requirements. I am sick of hearing Dodger ownership and management talk about the Red Sox, Yankees, Braves and Giants. How about we get a group running the team that is from Los Angeles and cares about the Dodger Way?

Steve Sax said...

I would actually be quite open to Mark Cuban, lack of LA residence notwithstanding.