July 22, 2014

Week One of the McCourt Divorce Rolls On

We’re not legal experts over here at dodgerfan.net, so when it comes to interpreting the moves and counter moves going on in the courthouse during the McCourt divorce trial, we highly recommend reading the great work of Josh Fisher over at DodgerDivorce.com.  In my opinion, this is what blogging is all about: here’s a Dodger fan with a professional speciality that gives him the ability to provide context to the legal maneuverings by Frank and Jamie.  Like a baseball game, Josh evaluates the players involved, their strategies and the results.  Brilliant.  He even made the trip back to Southern California from Minneapolis to cover the start of the trial.  Now that’s commitment.

Oh, and if you’re into the hour by hour minutia of the trial, you can also follow Josh on Twitter as he tweets from inside the courtroom.  Another expert on the McCourt divorce is Molly Knight from ESPN The Magazine, and she’s also on the scene in downtown LA so follow her on Twitter as well for another perspective.  You’ve got to love technology!

Breaking Down the McCourt Divorce Saga

I was preparing to write a story about how refreshed I was heading into the second half of the season, the performance of Ethier, Furcal, Kuo and Broxton in the All-Star Game and some of the good stuff we have planned for the next few months.  But then I read Molly Knight’s anticipated story on the McCourt divorce saga (the article is slated to appear in the July 26 edition of ESPN, The Magazine, but is also available online now).  My response? Ugh.

Molly is a great writer and does a fantastic and what must have been an exaustive job detailing the many twists and turns of the McCourt divorce.  This is no easy task, and frankly, I had allowed myself to forget about several of the numerous unfortunate moments since the couple bought the organization in 2004.

Rather than recap the article and what’s happened in the past, I’d like to discuss some of my big concerns for the future of the franchise:

First, I’ve long felt that the Dodgers are spending just enough to win the NL West, without really investing in putting the club “over the top” to win the World Series. 

Take your four best starters from the group of Billingsley, Kershaw, Padilla, Kuroda and Ely, and see how they stack up to the Yankees rotation. Right now, I just don’t think they have enough experience to win without the addition of a #1 starting pitcher; an ace.  I really love a lot of these guys (with Kershaw and perhaps Bills being #1 starters eventually), but my concern remains that the Dodgers just don’t have the pitching firepower to win it all this season.  And that’s a big problem.  Here are both sides of this issue, per Molly Knight’s article:

While the McCourts were living large, the Dodgers, in 2008 and 2009, spent less than any other MLB team on the draft and international-player signings, an area the team once dominated. Frank told reporters during spring training that the divorce has nothing to do with the payroll; and multiple former club execs say there’s truth to the claim. “It was Frank’s plan all along to run a team with a payroll of about $80 million,” says a former high-ranking club official speaking on condition of anonymity. “His thinking since he bought the team was: ‘This isn’t the AL East. Why would I spend $150 million to win 98 games when I can spend half that to win 90, if that’s all it takes to make the playoffs in our division?’ ” So while the Dodgers have spent money on free agents such as Andruw Jones, Juan Pierre, Jason Schmidt, Rafael Furcal and Manny Ramirez – plus Joe Torre, the game’s highest-paid manager — GM Ned Colletti has structured deals creatively, offering fewer years (Furcal, Jones) and deferring payments (Ramirez, Jones).When asked how the McCourts’ divorce is affecting the Dodgers’ payroll, Colletti, weary of the question, joked: “You think I can answer that?” He says he’s never “heard a number” like $80 million and holds the company line, saying the team would add payroll down the stretch if the right deal presented itself. If the Dodgers were to deal for, say, Cubs lefty Ted Lilly at the July 31 trade deadline, Lilly would be owed just $4 million for the rest of 2010, or roughly one-fifth of what McCourt will pay to divorce attorneys this year. “For the life of me, I cannot figure out why he hasn’t just settled,” says another former executive. “It’s like he’s lost his mind.”

Second, will the McCourt’s settle, or will this be a fight to the proverbial death?  Per a brief conversation I had with Molly via Twitter, she stated “As a fan you should hope they settle before Aug 30, though. And I think they might.”  That would indeed be great news, but how is Frank going to be able to pay Jamie off?  He can’t get a loan, and according to court proceedings, is borrowing money from his brother to make Jamie’s monthly spousal support payments.  If that’s the case, won’t the money have to come from keeping the Dodgers payroll in check and making a big enough profit to pay off Jamie?  Or am I missing something? (If I am, please let me know!)

Third, is Frank McCourt trying to hold on financially until the Dodgers’ television rights come up to bid after the conclusion of the 2013 season?  In February 2010, Bill Shaikin of the Los Angeles Times discussed court documents (submitted by Jamie’s team) that reportedly showed that the club intends to shrink the percentage of revenues spent on payroll through the 2013 season and hold thereafter. Per Bill Shaikin:

The document anticipates a significant rise in club revenue, from $295 million in 2008 to $529 million in 2018, and in the average ticket price, from $29.40 in 2007 to $53.50 in 2018.

Dodgers attorney Marshall Grossman, asked via e-mail what the club would tell fans wondering why the rise in revenue might not be accompanied by a similar rise in the player payroll, responded with an e-mail that noted financial plans are subject to regular revisions.

“It is prudent for a well-run business to engage in ongoing financial modeling and planning,” Grossman wrote. “When the Los Angeles Dodgers have financial information relevant to the public and the fans, it will be made public by the Dodgers.

“The Dodgers’ commitment is to operate on and off the field as a premier baseball organization, for the benefit of the fans and the Los Angeles community. The Dodgers continue to honor that commitment.”

The Dodgers spent 46% of revenue on player compensation in 2007 and 42% in 2008, according to the documents. The projections call for that percentage to fall to 25% by 2013 and remain at about 25% through 2018.

Commissioner Bud Selig encourages teams to spend about one-half their revenue on player compensation, according to two high-ranking major league executives contacted by The Times.

If the document cited in the LA Times story is true, a new television network could give Frank McCourt the financial leverage to pay off Jamie in a settlement, right?  I’m definitely not a lawyer or an expert in divorce proceedings, so will leave this to others that are much more knowledgeable, like the always educational Josh over at Dodger Divorce.

And it continues today: both Molly Knight and Jon Weisman have short pieces on the legal wranglings around the post-nup agreement (it involves forensic scientists and staples….seriously!).

Regardless, this is all a LOT for the casual Dodger fan to take in.  I know a majority of the fans out there don’t care about all of this and just want the ownership to deliver the best possible roster of players and managers to make a run at a world championship.  Unfortunately, both sides of this divorce battle seem intent on keeping it in the public eye until the ownership of the Dodger franchise is ultimately resolved.

Photo Credit: AP Photo/Carlos Delgado (File)

Thoughts on the Dodgers Finances

One of the “must read” Dodger sites today is Josh Fisher’s Dodger Divorce.  Josh does a great job of breaking down ever significant move that takes place in the court room, and explaining what it means to Dodger fans.

His latest story, Two McCourt Sons Are on the Payroll…Do We Care?, is interesting.  As was noted over the past few weeks, Drew and Travis McCourt make a combined $600,000 in annual salary.  Ok, great.  I always assumed they worked for the club in some daily capacity.  But Josh Fisher points out something different:

As of last fall, Drew was attending business school at Stanford and Travis worked at Goldman Sachs in New York.

Josh debates whether or not this is really something that we need to care about, given the larger problems with how funds generated by the Dodgers are spent.  But I would argue that this does matter.  It matters if you care about character.  Frank and Jamie McCourt are stewards of the Dodgers legacy, and that means doing the right thing.  This isn’t some random professional sports team.  This is the Los Angeles Dodgers.  I sincerely hope that Drew and Travis McCourt are providing some real value to justify their salaries as professionals and not exclusively because of who their parents are, but based on what’s come out in a myriad of court filings, I don’t think I have much reason for optimism.

Every time the curtain is pulled back on the Dodgers financial operations, questions emerge.  The Dodgers claim that Ned Colletti has the payroll he needs to sign make trades and build a championship caliber club.  Practically every national writer and columnist says that the payroll is definitely impacted due to the divorce.  I’m not sure we’re ever going to know the real truth, but I believe fans get upset about issues like Drew and Travis McCourt’s salaries because the team is believed by many to have not made the necessary investment in the free agent market during the offseason by acquiring a #1 starting pitcher, nor do they have the funds to make a significant splash at the trading deadline. 

All I ask is that Frank and Jamie McCourt do the right thing for the Los Angeles Dodgers and their fans.  Is that really too much to ask?