Wednesday, June 01, 2011

At Some Point, This Leveraged Structure Collapses, Right?

Molly Knight of ESPN.com has some sources saying that Frank McCourt met the May 31 payroll only by further leveraging the future, squeezing out cash payments now in exchange for sponsorship and luxury box discounts:

Los Angeles Dodgers owner Frank McCourt was able to meet the team's payroll Tuesday with cash advances drawn on the team's corporate sponsorship deals, according to three people familiar with the matter who were not authorized to speak publicly.

Since McCourt has been unable to secure traditional loans to fund the cash-strapped Dodgers, front office executives in charge of revenue were charged with finding more creative ways to help float the troubled franchise for two more weeks.

Current team sponsors were contacted and offered discounts on their annual bills and luxury box stadium seats in exchange for cash up front, according to two sources. It is not known which sponsors took the offer, or the depth of discount they were given.

McCourt is still searching for the funding to make the team's next payroll on June 15, according to two people with knowledge of the Dodgers finances who were not authorized to speak publicly. Should the beleaguered owner fail to make payroll, Major League Baseball would cover it for him and likely formally seize the team.

I'm expecting that the next time I enter Dodger Stadium parking and fork over my $15, that the attendant will ask if I want to buy a future game's parking in advance, for $12. Or even $8 plus whatever change I can find in my car.

6 comments:

Mr. Customer said...

Would somebody just put Old Yeller out of his misery already?

QuadSevens said...

I'd counter offer $5 for the parking and a couple of beer vouchers.

Pistol Pete Reiser said...

Some predictions. Pick which one ain't gonna happen:

1. MLB climbs so far up McCourts ass with their microscopes that they eventually find something truly damning (ie, Frank hires Boston-area psychic using team money to project helpful vibes towards the team... oh wait... was trying to come up with something too far-fetched...)

2. Frank scratches together one or two more payday cycles of cash to pay folks with, then can't meet payroll - and just as MLB is about to lay the law down fully and completely, he files for bankruptcy - and we're all stuck watching this drag out in bankruptcy court for 6-9 months of public scrutiny over his finances.

3. Selma Hayek dumps here French-ish billionaire husband, invests heavily in baby oil company, and begs me to take full control of her assets. I unquestioningly comply.

Mr. Customer said...

@PPR

Sadly, I'd say #2, though I'm holding out hope for #3. My guess is that he only hasn't declared bankruptcy already because it would almost certainly result in (eventually) him losing the team.

rbnlaw said...

Although the sponsors who kicked in the dough remain undisclosed, I did note that at the beginning of the broadcast last night Vinny said, "Welcome to Farmer John Field at Dodger Stadium, brought to you by Taco Bell."

Just sayin'.

Jason said...

Supposedly, a very large chunk - if not the entirety - of Manny's 2011 salary deferral comes due in the June 30th payroll. That is a lot of prepaid parking vouchers...