Tuesday, October 18, 2011

No Worries, We Didn't Need That $21M Last Year Anyway

Frank and Jamie McCourt have apparently decided to cap their legal squabbling at the low low price of $20.6M in cumulative legal fees regarding their divorce. And that's just since July!

Frank and Jamie McCourt have reached a divorce settlement under which she would get about $130 million and relinquish any claim to a share of the Dodgers, multiple people familiar with the agreement told The Times.

The settlement would remove Jamie McCourt as an obstacle to Frank McCourt's plan to retain ownership of the team by selling the Dodgers' television rights in U.S. Bankruptcy Court. The agreement also would appear to set up a winner-take-all court showdown for the Dodgers between Frank McCourt and Commissioner Bud Selig.

The people familiar with the agreement spoke on condition of anonymity because the settlement has not been finalized. However, such a settlement would conclude what is believed to be the costliest divorce in California history.

The McCourts incurred $20.6 million in legal bills related to the divorce through July, according to Los Angeles Superior Court filings by each of the parties. To settle the outstanding dispute over whether the Dodgers were the sole property of Frank McCourt or community property could have added at least $14 million to those bills, based on estimates in a filing on behalf of Jamie McCourt.

Let's assume that half of that $20.6M is Frank's, right? So for just over $10M, he earned the right to pay his ex-wife $130M to get her out of the Dodgers. Sounds like a bargain! And this way, Frank can forge ahead and lose the Dodgers himself:

For two people presumably so good at business -- say what you will about how the McCourts managed the Dodgers, but they made enough money to put themselves in position to buy a Major League Baseball team and mansions all over the country -- it is amazing they each let pride and emotion cloud their judgment so badly.

There is no way this should have gotten to this place, no reason all the gory details of their opulent lives needed to be spilled in court filings for all the world to see and gag over.

Those details are why this has become more than a divorce case. They damaged the McCourts' businesses and brand, then exposed both of them to future risk -- Selig's intervention and public scrutiny of their finances.

This settlement should have been reached quietly years ago in a law office off Wilshire Boulevard, not in court rooms across America. It would have been the right thing to do for the Dodgers and the right thing to do for the McCourts. But more importantly, it would have been a good business decision.

There are sunk costs for both sides in every divorce, money and wealth earned that goes away in the process of dividing assets and can never be recovered. A smart businessman assumes the loss and moves on without making it worse.

But this was never about business. It was, in fact and metaphor, a modern day bonfire of the vanities. And now, perhaps fittingly, all that selfish pride and ego stand to cost each of them dearly. The details of the McCourts' extravagant lifestyle that should never have seen the light of day, let alone been read aloud in a public courtroom, will likely sink both of them.

Without their fight in divorce court, Bud Selig never would have received the ammunition to act in the best interests of baseball. Los Angeles never would have known the depths of the McCourts' financial depravity. The Dodgers never would have been cast into purgatory.

At the end of this month, a Delaware bankruptcy court will hear arguments and then render a final judgment on this sorry matter. The team will either be sold and a city will move on with a clean break, or Frank McCourt will come out the other side, his credibility battered and bruised. Neither option is palatable. Both of them were avoidable two years ago.

Prince Fielder earned $15.5M last year. Albert Pujols was at $14.5M. Both figures are less than $20.6M.


QuadSevens said...

Do you think Fielder and/or Pujols's agents will use the arguement, "You spent $20.6 million to drop a terrible team player. Why not spend at least the same for a great team player?"

Wicks said...

What are the chances the judge orders a sale at this next hearing? Sounds like he wants a quick ruling so the club can have "normal" off-season.

Josh S. said...

We're getting Prince Fielder.

I am 100% certain.

Bookmark this post.

(Even if it's just so you can laugh at me later.)

Neeebs (The Original) said...

@Josh S: Will we also change our colors to Purple Reign?

Oh not that Prince? Nevermind.

spank said...

@ Josh

You're Delirious.

Steve Sax said...

I hope we get Pujols though I think it's less likely

Fernie V said...

I heard Prince is a pretty good athlete maybe he play hit. Game blouses.