As Los Angeles Dodgers fans celebrate the demise of Frank McCourt’s appalling stewardship of the Dodgers the past seven years, somehow Bud Selig has emerged in the media as a heroic figure swooping in to save the day.
(Dr. Selig: No Choice Now But To Slay His Very Own L.A. Creation)
Nothing could be further from the truth.
It was Selig who, in January 2004, ignored a nearly all-cash $430 million offer for the Dodgers by local L.A. billionaire business magnate Eli Broad after MLB owners initially refused to ratify McCourt’s purchase of the Dodgers from News Corp. at the same price.
On Jan. 28, 2004, longtime LOS ANGELES TIMES baseball writer Ross Newhan noted the following as part of the newspaper’s timeline chronicling McCourt’s pursuit of the Dodgers:
Jan. 9, 2004: With financing concerns lingering, Selig calls off Jan. 14-15 vote but expects sale to be approved in a conference call before Jan. 31.
The day after that vote was called off, Newhan reported on Jan. 10, 2004:
Selig seldom calls for a vote unless he knows the outcome and it would be a surprise if a conference call produced a rejection, although there has been some speculation that the commissioner — intent on satisfying News Corp.’s determination to sell the team after a protracted process in which negotiations with two other bidders, Dave Checketts and Malcolm Glazer, ultimately broke down — would usher it through the full course and then let the owners decide if there were reason to be concerned about the financing.
McCourt was not included on Forbes’ most recent list of the 400 richest Americans (requiring a net worth of $600 million) and was a distant loser in bidding for the Boston Red Sox, but he owns valuable waterfront property in Boston that he reportedly is using as collateral in financing the acquisition.
11 days after Selig determined that he did not have the necessary MLB owner votes needed to ratify McCourt’s bid for the Dodgers, Newhan reported in the L.A. Times on Jan 20, 2004:
[Los Angeles developer and billionaire philanthropist Eli] Broad, whose net worth has been estimated at $3.8 billion, notified News Corp. (Dodgers Owners) Chairman Peter Chernin by letter last Wednesday that he was willing to offer the same $430 million if McCourt’s deal fell through.
His involvement, coming at the urging of Mayor James K. Hahn and former Dodger owner Peter O’Malley, among others, seemed to amplify concern in and out of baseball about McCourt’s ability to operate the Dodgers at an acceptable level and about the fact that he is proposing to invest little or none of his own money, with News Corp. loaning him almost half the $430 million.
McCourt needs three-fourths approval of the 30 owners, but the ownership committee has yet to recommend approval or rejection, and Commissioner Bud Selig has yet to schedule a conference call during which owners would vote on the sale.
.. Whether Selig is determined to have McCourt approved as a favor to News Corp. because of its national and regional TV contracts with baseball or whether he would let owners reject the sale, feeling that he could tell News Corp. that he had done everything he could, isn’t clear.
If Selig’s intentions weren’t clear at that point, perhaps they should’ve been.
On Oct. 12, 2003, four months before MLB owners balked at approving McCourt’s stewardship of the Dodgers, ESPN.com reported of Selig’s stance on McCourt’s future ownership of the storied Los Angeles franchise:
A day after News Corp. reached an agreement in principle to sell the Dodgers to Boston real estate magnate Frank McCourt for $430 million, MLB commissioner Bud Selig expressed confidence the deal would be completed despite questions about whether McCourt had sufficient financial backing.
McCourt’s financing remains unclear, baseball officials said, and his partnership has not been completed. A report from Boston indicated that McCourt might sell or find development partners for his properties there to help pay for the Dodgers.
Thanks to a report less than a month ago by FORBES magazine, we now know the financing McCourt used to somehow satisfy News Corp’s $430 million asking price - and the approval of Selig and at least 75% of MLB owners.
Forbes reporter Monte Burke reported on March 23, 2011:
The sale price for the ball club and its stadium in Chavez Ravine was $430 million. McCourt borrowed all but $9 million of the purchase price, an unusually large amount of financing. That sum included a $196 million loan from Fox, which used one of McCourt’s South Boston parking lots as collateral.
On Jan. 30, 2004, the day after MLB officially announced McCourt as the new Dodgers owner, Times reporter Newhan wrote:
McCourt insisted that he has put more than $200 million of his money into the $430-million deal, but industry sources maintained that he has none of his own involved. The financial intrigue, along with the community’s fervor, was exacerbated recently when Los Angeles billionaire Eli Broad notified News Corp. that he was willing to buy the Dodgers for $430 million, mostly in cash, if McCourt’s bid fell through.
Forbes reporter Burke noted in his piece last month that since McCourt’s hyper-leveraged takeover of the Dodgers in 2004 …
Over that period McCourt took $108 million of the money in personal distributions and funneled it into the couple’s real estate purchases.
According to Raman Sain, a principal at accounting firm Holthouse Carlin & Van Trigt, who studied the McCourt’s legal documents on behalf of the Los Angeles Times, Frank McCourt borrowed $23 million against the team in 2008 and $8.5 million in 2009.
Michael Hiltzik of the LOS ANGELES TIMES reported on Feb. 23, 2011:
The McCourts, who own the Los Angeles Dodgers (so she says; he says he’s the owner and she’s not), jointly pocketed income totaling $108 million from 2004 through 2009, according to documents Jamie McCourt recently filed in the couple’s divorce case in Los Angeles County Superior Court.
On that sum, they paid zero federal and state income tax. Jamie suggests that some tax breaks will apply this year too.
The court papers indicate that the McCourts deliberately structured their business at least partially to allow them to live tax-free. The McCourts have also borrowed against future business income — in 2007 they took out a $140-million loan against future Dodger ticket sales, of which $20 million went to fund their lifestyles, tax-free.
That spending is a large part of the reason why the franchise is now reportedly nearly $500 million in debt, forcing McCourt to recently attempt to take out a personal $30 million loan from television partner Fox in order to meet the club’s early season payroll.
It was that desperate cash grab that reportedly prompted Selig to take over the team earlier this week. The same Selig who pushed McCourt’s ownership bid through despite a $430 million nearly all-cash offer from an esteemed Los Angeles businessman in lieu of the Selig-sponsored, largely illiquid bid by McCourt.
How desperate was the situation for Selig to strip his handpicked steward of the Dodgers?
In the midst of the McCourt divorce drama, which gave the first, material indication of the fiscal malfeasance perpetrated on the franchise, Selig said of the McCourt ownership on Nov. 18, 2009:
“The Dodgers are in good hands, with [General Manager] Ned Colletti and [Manager] Joe Torre and Frank McCourt as the control person.”
Finally, the first visible cracks in Selig’s support for McCourt appeared late last month. From Dylan Hernandez of the L.A. Times:
So now that McCourt is dealing with the fallout of a costly divorce that has further clouded the future of what was already a cash-strapped club, does Selig feel responsible for the situation?
“Well, Fox sold the club to him and we did approve it, but that’s a normal process,” Selig said. “I don’t really have any other comment.”
In January, 2004, Selig was forced to cancel a long-scheduled meeting expressly set to rubber stamp McCourt’s new ownership because the commissioner didn’t have enough votes from MLB owners to ratify McCourt’s cash-poor bid for the Dodgers.
After a subsequent month of arm-twisting, Selig was able to railroad the deal through - spurning a local L.A. billionaire businessman’s cash-rich bid at the same price in the process.
McCourt certainly deserves most of the blame for the financial black hole the Dodgers have fallen into, but the past seven deadly seasons wouldn’t have happened without Selig’s now-cursed blessing.