Unraveling The Tangled McCourt Web

The lead article on section 2 of yesterday's WSJ was about MLB's rejection of the Fox deal for the Dodgers, and since it is the WSJ, it also detailed a little bit about the complex financial structure Frank McCourt has constructed around the Dodgers, likely in order to obfuscate his money-siphoning plans (no link):

If Mr. Selig moves to seize full control of the team it could lead to a lengthy and complex court battle because Mr. McCourt, who made his fortune in real estate, has divided the assets connected to the franchise into a series of separate companies.

For example, when Mr. McCourt bought the Dodgers and its assets from News Corp. in 2004 for $430 million, the transaction was separated into two deals. Mr. McCourt paid $330 million for the team and $100 million for Dodger Stadium and 250 acres of land surrounding the building.

The team was put into a holding company known as The McCourt Broderick Limited Partnership. The stadium is held by an entity known as LA Real Estate LLC. The land is held by Blue Landco LLC. Dodgers Tickets LLC controls the team's ticket-selling operations. The latter company made two deals in 2005 and 2007 to borrow a total of $367 million against future ticket sales. The first $10 million in ticket sales each year goes to pay down debt on the interest-only loans, with Mr. McCourt using the additional ticket revenues to pay for team expenses.

A person familiar with Mr. McCourt's thinking said he plans to argue that Major League Baseball can only make a claim on the team itself, and not on his other properties or companies connected to the franchise.

However, while Major League Baseball signed off on these deals, including the $367 million loan against ticket sales, another person familiar with the agreements said all of the entities are subject to the governance of Major League Baseball, which can move to take control of each of them.

Even the ticket-selling entity is highly-leveraged! Egad.