So this is what it feels like when Mom and Dad get a divorce.
Jaime and Frank McCourt have announced they’re splitsville. No, I’m not related. But I am a 30+ year season ticket holder of the Dodgers, the major league baseball team the McCourt’s happen to own, and what will no doubt be the most prized asset in their divorce, assuming they don’t kiss and make up. So I, as many Dodger fans will, stand to be traumatized by what happens to the team as a result of love gone bad.
Dodger owners Jaime and Frank McCourt, in a intimate moment from a few years ago, have recently announced their split. No truth to the rumor of a love triangle involving Tommy Lasorda, left.
For years Dodger fans were spoiled by the steady, paternalistic ownership of the O’Malleys. Walter O’Malley was very shrewd, and certainly never met a buck he didn’t want to make, but he did swing the sweet land deal for Chavez Ravine that resulted in the Dodgers moving west in 1958, and he did get one of the greatest baseball parks of all time, Dodger Stadium, built. He treasured it like the jewel it was (and still is) and for the most part provided good teams in a great ballpark at very reasonable prices. When his son Peter took over stewardship of the team, he seemed to always recognize and acknowledge that while the team belonged to his family, the entire city of Los Angeles had a very large equitable interest. He was one of the few owners of a professional team to seemingly put what his team meant to his city ahead of his personal interests.
When baseball economics got crazy, and no doubt scared by the labor strike in the mid-90’s, Peter O’Malley determined that it was too risky to have his family’s entire wealth tied up in one professional sports team. He tried to cross-collateralize his investment by also acquiring a football team to play in a stadium to be built next to Dodgers stadium, which would have provided the investment diversity he needed to continue to own the Dodgers, but was blocked by councilman Mark Ridley-Thomas who was insistent that any new football team in Los Angeles play in the aging Coliseum, which happened to be in his district. Ever mindful of his civic responsibilities, Peter O’Malley backed off rather than start a fight at City Hall and reluctantly concluded that without the football team he would have to sell the Dodgers, which he did.
For those of us fans who consider ourselves part of the Dodger family, this began what feels like a bad trip through a twisted foster care program. Instead of the paternal O’Malleys, mom and pop was now Fox, the giant media conglomerate. Decisions were now being made by temperamental televison executives with no major league baseball experience, whose idea of running the team was to trade its best and most popular player, Mike Piazza, without consulting the team’s general manager to send a warning to the rest of the players to be reasonable at contract time or be gone.
If Fox proved to be a parent whose decision making skills were somewhat lacking, at least they had enough money that they didn’t have to jack up ticket prices. Enter the McCourts, who bought the team from Fox for what is estimated at 450 million. Unfortunately the McCourt’s didn’t have 450 million laying around, and if memory serves they borrowed most of the money for the purchase from Fox. An early version of the nothing down deals which have led to calamity in the mortgage industry. The McCourts secured the transaction with their major asset, some prime parking lots in Boston, from whence they came (hence the L.A. Times’ T.J. Simer’s nickname for Frank McCourt as “The Parking Lot Attendant”). The McCourts eventually sold the parking lots to pay Fox, but from the day they bought the team there has been rampant speculation that they really couldn’t afford it and lots of questions about whether they have enough remaining assets to adequately operate the Dodgers and keep the team and its stadium at the high level they have traditionally enjoyed. In a sense, they were taking on the risk that Peter O’Malley had sold the team to avoid.
Frank McCourt chats with Dodgers fans at a recent game
To their credit, the McCourts nixed proposals for a new stadium downtown near Staples Center (which they probably couldn’t afford anyway and for which there would be no public money) and announced that the beloved Dodger Stadium wasn’t going anywhere. They invested a lot of money in updating Dodger Stadium (or at least the Field Level, where the most expensive seats are), and managed to spend enough money – or acquire good players from other teams for nothing but minor league prospects – to keep the team competitive.
Ticket prices were another matter, however. It was as if mom and dad had suddenly announced that not only were you going to pay rent for your room, your room was now considered to be in the high rent district. Until the recession/depression hit last year, the McCourts substantially raised ticket prices every year. Recently it was announced that the first three rows in the seats closet to the Field would now run $200,000 a season for four seats. My own seats in the Loge went from $30 a seat to $50 a seat – a 66.66% increase – in two years. It was clear that the McCourts did not have the resources of a Fox corporation to subsidize baseball operations. In order to meet operating expenses and make enough profit to support themselves and the four expensive houses they would buy in the LA area (I’m still not sure why two people need four homes unless they’ve each got a plaything stashed) the money would have to all come from the baseball business. They jacked up ticket prices and plastered advertising on what seemed like every square inch of Dodger Stadium. When Frank ordered the names removed from the back of the player’s jerseys for one season I was sure it was because he wanted to replace them with more advertising. They also started marketing all kinds of bizarre money-makers like sleep overs at Dodger Stadium, yoga classes with the team’s right fielder and $500 a pop events where you could take batting practice and have a meet and greet with a couple of Dodgers.
So what’s to become of us now? Recently a divorce forced the then owner of the San Diego Padres to sell that team, in order to equitably divide the marital assets. According to an article in the LA Times, Frank McCourt’s lawyer claims there is no chance that he will sell the team. The same report however, puts the value of the Dodgers at $722 million, with the value of the four houses in the neighborhood of $82 million. Clearly one McCourt can’t take the team with the other keeping the real estate.
Jaime McCourt at Game 1 of the National League Division Series, a few days before the break up was announced.
This is where things could get really interesting. How interesting may depend on the McCourts themselves. No gossip yet on what caused the split, but my guess is there must be some very messy and titillating details about to spill (don’t you just love a good scandal?) Why else would the McCourts have chosen the eve of the National League Championship Series in which their Dodgers will be playing the Phillies for the right to represent the National League in the World Series to suddenly announce their split? Couldn’t this have waited until after the play offs? I’m sure Major League Baseball can’t be too pleased with their timing. It’s as if Dad decided to use his toast at his daughter’s wedding to announce he’s coming out of the closet now.
Things have apparently been bad between Jaime and Frank for awhile. The McCourts use to be at almost every game together, but this season my wife often commented that Jaime never seemed to attend anymore. I noticed her at Game 1 of the National League Division Series, but instead of sitting next to her husband Frank, she sat several rows in front of him. I also thought it funny at the time that instead of something Dodger blue she was dressed all in black, like she was in mourning. Maybe she was. Anyway, surely they could have waited another couple of weeks to go public with the news. The fact that they didn’t leads me to believe they chose to go public before someone else did.
In any event, the McCourts have always been highly sensitive to bad publicity. So sensitive that since arriving here in LA they’ve gone through public relations specialists faster than Joe Torre does bullpen pitchers. They tend to toss PR guys or gals out with the bad news and bath water. Hopefully this aversion to negative publicity will provide incentive to both of them to keep things civil and cooperate on a fair settlement that will provide a minimum of disruption to the team.
Unfortunately, when going through a divorce a lot of people don’t want fair – they want blood. If parting is such sweet sorrow, revenge is the sugar coma to end all sorrow. Having handled a few divorces in my time, when you get two very angry, irrational people going through a divorce all you can really do is step back and let your billings go through the roof.
How foolish can people going through a divorce be? I remember handling a divorce for a soap opera actor who came home from a movie shoot to find that while he was gone his wife – a soap opera actress – had literally backed up a truck to house and stripped it clean. Every last item they owned left in the back of that truck. She also cleaned out all the bank accounts. She even took his residual checks out of the mail, deposited them and took that money too.
I assured him that I would get his half back (California being a community property state). No he insisted. He didn’t want to get hung up in a long, messy and expensive divorce. All he wanted was a paper-mache statue that was his before they got married and wasn’t worth anything. It just had sentimental value to him. If she would give that back, she could keep everything else.
I told him that I didn’t recommend he do that, but if that’s what he wanted I would call her lawyer and make the offer. Her lawyer was thrilled. “Shouldn’t be a problem!” he kept chuckling. “I’ll highly recommend she take the deal. Let me call her and get back to you.”
An hour later he called back.
“She won’t give it back.”
The McCourts are both smart and shrewd business people. Jaime is also a lawyer, so she ought to know something about the futility of litigation. Often there’s a prevailing party in name only. If the real gains and losses are totaled, both sides lose. Conversely, if both sides are smart, civil and rational, they can make the best of a bad situation.
Will the McCourts? So far its not looking good. Reportedly on paper Frank is the sole owner of the Dodgers and all the real estate is in Jaime’s name only. Could be that they have some arrangement already in place, but Jaime doesn’t strike me as dumb enough to let Frank have a 700 million plus asset in return for some houses worth about 15% of that. Could be they set it up that way as some sort of protection against creditors in case they got in over their head.
In any event, Frank is supposedly now claiming the team is 100% his, and Jaime’s begging to differ. At this point you have to vote messy if you were predicting how this split is going to go. I never learn. A few years ago when I heard about the tv show “Celebrity Justice” I wondered how where they were going to find enough celebrity dirty legal laundry to fill a daily show. Turns out there’s as many or more troubled, rich famous people as troubled, not so rich not so famous people. Frank and Jaime are just the latest to the party.
If they do duke it out, they stand to not only embarrass themselves but the team, the town and the fans. The only one who may benefit (aside from their lawyers) might be Clippers owner Donald T. Sterling. Sterling is usually the poster boy here in LA for an owner with too many cents and too little sense, and has his own well documented legal troubles. Having the Dodgers collapse while Frank and Jaime squabble over ownership and control can only elevate his status.
When ownership and control of the team is in doubt, paralysis sets in. There may be delays in retaining key people, and those key people may decide not to wait around to see who wins or who loses. They may opt for more secure opportunities elsewhere. Players may not be able to be retained or free agents pursued because its not clear who can negotiate or authorize the contracts for them.
The best hope for us fans maybe for them to agree to sell the team. Of course we’d want the buyer to be someone like the Angel’s Arte Moreno, as opposed to another Fox. We don’t want the cure to be worse than the cold. Hey, maybe Scott Boras can use some of that money he’s fleeced from the Dodgers over the years to buy the team. It’d be nice to have him on our side of the negotiating table for a change.
Otherwise I don’t see how this can work. Even if the McCourts decide to keep the team as co-owners, there’s likely to be friction and factions. There will be Frank loyalists and Jaime loyalists. Ah the corporate politics that may portend. As an example, a few days before the announced break up, a Dodgers VP thought to be highly valued by the organization was told he should start looking for work somewhere else. His crime? Apparently he had aligned himself with Jaime. In short, it would be hard to picture the organization as having unity and clarity of vision with an ex-husband and wife sharing ownership. The more hostility there is between them the less likely everyone will be ho-ho-hoing it up at the annual Christmas party.
And if one of them agrees to let the other buy them out, where does the money come from? Maybe a new partner. Or maybe a loan. And if it’s a loan, you know what that means. Ticket increases across the board to pay for love gone bad.
Photos copyright Steve Neimand
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