Home Maury Brown What Does the Future Hold for Frank McCourt, MLB, and the Dodgers?

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What Does the Future Hold for Frank McCourt, MLB, and the Dodgers? PDF Print E-mail
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Written by Maury Brown   
Thursday, 21 April 2011 14:46

The divorce is just one of the issues that has MLB seizing
the Dodgers, but what's next?

CORRECTION: This story originally reported that Frank McCourt let it slip that $400,000 in pay to Howard Sunkin was repaid back to Dream Foundation. That was incorrect. It was Steve Soboroff who did so.


Commissioner Selig announced late yesterday that MLB has informed Dodgers owner Frank McCourt and will appoint representative to oversee all aspects of the business and the day-to-day operations of the club. Selig said that the move was done, “because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball.”

But, what’s next, and how did we get here? Here’s a look.

Will Frank McCourt fight MLB taking over the Dodgers?

The answer appears to be, yes. McCourt issued a statement through the Dodgers late Weds. saying, "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." Word has surfaced that McCourt is preparing to mount a legal charge, although given his depleted pocketbook from battling his estranged wife Jamie in divorce court, it’s unclear how long he can withstand the charge.

What Would He Request?

McCourt would request an injunction to block the league from running day-to-day operations.

On What Grounds Did Selig Make His Move?

Selig is using his powers from within MLB Constitution. Section 3 reads, in part (emphasis provided):

Sec. 3. In the case of conduct by Major League Clubs, owners, officers, employees or players that is deemed by the Commissioner not to be in the best interests of Baseball, punitive action by the Commissioner for each offense may include any one or more of the following:

(a) a reprimand; (b) deprivation of a Major League Club of representation in Major League Meetings; (c) suspension or removal of any owner, officer or employee of a Major League Club…

Who Will Run the Dodgers Should Selig Win the Day?

One person that immediately came to mind was former Washington Nationals president, Stan Kasten. Given his background, he seems a more than worthy candidate. Reached for comment, Kasten would only say that he knew nothing of the process and proceedings around the Dodgers take over. Upon further inspection, John McHale, Jr. likely makes more sense. McHale, Jr. has been part of the league’s front office for a considerable period, and unlike Kasten, would be there to only facilitate movement with the club rather than look to make some mark on it, such as Kasten would seem to do. The other name floated about was Corey Busch, the former exec for the Giants.

Did the Loan from FOX to McCourt Play a Factor?

Asking a league source if the $30 million loan from FOX to McCourt was the final straw for MLB to make its move, the source reminded that McCourt was not using any Dodger assets in the loan, but that the action was “one of a million reasons” why MLB finally made their move.

What was the $30 million for?

Reports vary. Most have said that McCourt was going to use the funds to pay operational payroll, but Mike Ozanian of Forbes reported late Weds. that the $30 million was “primarily used to cover the Dodgers revenue-sharing contribution to low-revenue teams.”

Is the IRS Investigating the Dodgers?

Celebrity-paparazzi site TMZ reports that the IRS is looking into both Frank and Jamie McCourt. The site reports,” the IRS investigation was triggered by a number of disclosures surrounding the McCourt divorce.  In particular, IRS agents are interested in the fact that the McCourts took $145 million from the team and paid no taxes (certain court documents place the figure at around $105 million, but we're told it's actually $145 mil).” The story adds that, “The IRS is also interested in the fact that the McCourt children have drawn a salary from the team but performed no apparent services to justify the payout.”

Did McCourt Hire Inexperienced Front Office Staff?

This is a subjective matter, but many of the Dodgers front office that left in the wake of Jamie McCourt’s firing have little to no experience in baseball. Some such as Peter Wilhelm (CFO); Michael Young (CRO); Steve Soberoff  (Vice Char); Howard Sunkin (SVP Public Affairs); Geoff Wharton (Vice Chair), have no experience in MLB prior to being hired by the Dodgers. That was likely a concern for MLB on top of the financial issues, loss of season ticket base and sagging attendance.

Didn’t the Dodgers Get into Other Legal Hot Water?

Speaking of Sunkin, The Dodgers’ charitable Dream Foundation was investigated by the California Attorney General for paying Sunkin’s $400,000 in salary for doing work for the Dream Foundation on top of taking in salary for his position with the Dodgers – a sizeable overlap considering Sunkin was claiming he was working 40 hours a week for Dream Foundation. His $400,000 salary was nearly one-fourth the $1.6-million budget for the Dream Foundation in 2007. McCourt let it slip that Sunkin’s salary had been repaid when meeting with reporters recently.

Did Draft Spending Hurt Frank’s Standing With MLB?

With a brand as strong as the Dodgers and a market as large as LA, the club should be printing money instead of burning it. Instead, Draft spending has been abysmal. From Baseball America:

  • 2010 – 28th (Removed deferred portion of Zach Lee bonus)
  • 2009 – 29th
  • 2008 – 28th

Did International Free Agent Spending Hurt Frank’s Standing With MLB?

Ditto. The club ranked last in spending for 2010, according to BA.

Will the Dodgers Be Sold?

Yes, but it won’t be anytime soon. With McCourt looking to fight the takeover, it will take MLB letting Frank bleed himself dry before he cries, “Uncle.” If and when the organization is finally removed from the McCourt’s dark cloud (sorry, Jamie, there’s not a chance after all of this you wind up in the driver’s seat. At least if MLB has its way), the club will likely sell for approx. $1 billion… easily.


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SPECIAL BUSINESS OF SPORTS NETWORK REPORTS:


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, as well as a contributor to FanGraphs and Forbes SportsMoney. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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