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Repo man: Baseball seizes Dodgers

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David Wharton and Bill Shaikin
April 21, 2011
— Major League Baseball has moved to seize control of the Los Angeles Dodgers, a famed franchise that fans and much of the baseball world had come to see as crippled by an owner who does not appear to have enough money to operate the team.

Baseball Commissioner Bud Selig announced Wednesday that he plans to appoint a trustee in the next few days to oversee “all business and day-to-day operations” of the ballclub in the next few days.


The move was prompted by a number of issues surrounding the Dodgers, including owner Frank McCourt’s recent receipt of $30-million personal loan to meet payroll and the parking-lot attack at Dodger Stadium on March 31 that left a San Francisco Giants fan in a coma, according to a league source.


“This has been like watching a soap opera unfold,” said Gary Toebben, the president and CEO of the Los Angeles Area Chamber of Commerce. “We want a financially solvent Dodgers. We want a winning team.”


The league will now have approval rights over every significant expenditure by the team, including a trade or contract extension. This will likely put the franchise on the path to being sold.


The commissioner’s move adds to the turmoil surrounding a team already embroiled in divorce proceedings between McCourt and his wife, Jamie, who is seeking joint ownership.


News of Selig’s decision figures to please Southern California fans who had grown suspicious of the McCourts’ stewardship of a ballclub that is struggling in the standings and facing decreased attendance this season.


Selig echoed those worries in a strongly worded statement.


“I have taken this action 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,” he said. “My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt’s ownership.”


The baseball world had viewed McCourt with suspicion almost from the moment he and Jamie McCourt engineered a highly leveraged purchase of the Dodgers in 2004. McCourt needed a $145-million loan from Fox, the team’s previous owner, to finalize the deal, putting up his Boston parking lots as collateral. Fox essentially foreclosed on the property and sold it two years later.


At first, the new ownership brought happier days to the Dodgers, who advanced to the playoffs in four of the next six seasons. In 2008, they won their first postseason series in two decades.


The team also acquired slugger Manny Ramirez. His arrival helped the team reach the National League Championship series in 2008.


Public opinion of the Dodgers’ ownership—lukewarm in the best of times—turned chilly when court documents from the McCourts’ divorce proceedings revealed that the Dodgers had been charging themselves millions in rent each year, with some of that money going toward the couple’s personal expenses.


The couple had made numerous real estate purchases, including side-by-side homes in Holmby Hills and Malibu, and paid Russian physicist Vladimir Shpunt to channel positive thoughts toward the team.


As of 2009, court records showed, the team had accumulated more than $430 million in long-term debt.


More recently, McCourt tried to arrange a $200-million loan from Fox, using the team’s cable-television broadcast rights as collateral. Selig rejected the proposal.


The commissioner has yet to rule on a proposed 20-year television contract between Fox that McCourt presented as a long-term solution to settle his divorce, manage the Dodgers’ debts and improve the team and the stadium.


Frank McCourt could not be reached for comment.


Jamie McCourt said in a statement, “As the 50 percent owner of the Los Angeles Dodgers, I welcome and support the Commissioner’s actions to provide the necessary transparency, guidance and direction for the franchise and for the Dodgers fans everywhere.”


Meanwhile, season-ticket sales have fallen from 27,000 in 2007 to about 17,000 this season, according to court documents and baseball sources.


Baseball is not accustomed to the commissioner taking such bold action against one of its owners.


Even the controversial Marge Schott, accused of making racially and ethnically offensive statements when she owned the Cincinnati Reds through the 1990s, was able to retain ownership after negotiating a one-year ban and a $25,000 fine. She subsequently agreed to sell the team.


Last season, Selig threatened to take control of the Texas Rangers as their owner, Tom Hicks, dealt with creditors over a large debt. A Major League Baseball executive monitored the Rangers, who subsequently reached the World Series under new ownership and lost to the Giants.


In 2002, the league purchased the Montreal Expos from owner Jeffrey Loria for $120 million. That franchise was moved to Washington, D.C., and transferred to new ownership.


The players, now accustomed to fielding questions about ownership, reiterated on Wednesday that they would ignore any outside distractions.


“I can’t control none of that,” center fielder Matt Kemp said. “I can’t control front-office stuff.”



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