If you haven’t followed the drama, Major League Baseball rejected the infamous TV deal between the Los Angeles Dodgers and FOX yesterday – the one that was potentially worth $3 billion with $385 million upfront. Selig rejected it shortly after the McCourts finally reached a divorce settlement. And that was the problem. Although Frank McCourt had claimed that none of the upfront TV money would be used for personal expenses, such as his divorce, the settlement clearly shows otherwise. Of the $385 million the Dodgers would receive upfront, $10 million would be used for attorney fees, $80 million would go towards personal debt, $10 million would be allotted for personal use ($5 million each), and $50 million would be placed into a trust. The remaining $235 million would go to the Dodgers, after Frank McCourt apparently repays himself $23.5 million for money he alleges that he advanced to the team in 2011. Do the math.
There are 150 million reasons right there for Major League Baseball to reject this desperate, Hail Mary deal. Bud Selig’s statement in full:
Pursuant to my authority as Commissioner, I have informed Los Angeles Dodgers owner Frank McCourt today in a detailed letter that I cannot approve the club's proposed transaction with FOX. This decision was reached after a full and careful consideration of the terms of the proposed transaction and the club's current circumstances. It is my conclusion that this proposed transaction with FOX would not be in the best interests of the Los Angeles Dodgers franchise, the game of Baseball and the millions of loyal fans of this historic club. Mr. McCourt has been provided with an expansive analysis of my reasons for rejecting this proposed transaction. Critically, the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt. Given the magnitude of the transaction, such a diversion of assets would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans. As I have said before, we owe it to the legion of loyal Dodger fans to ensure that this club is being operated properly now and will be guided appropriately in the future. This transaction would not accomplish these goals.Props to the Commissioner. The Dodgers are in this boat because the McCourts used the team as their personal ATM. They blew through Dodger money and borrowed against the club to the point that they may not meet payroll at the end of June. Like an angry parent, Selig sternly said, “enough is enough.” Such a large portion of the upfront TV money was going directly back to the McCourts for personal, non-Dodger-related use; it could not be ignored. Bud Selig is the gate-keeper who allowed the inexperienced and unqualified Frank McCourt into the club of baseball ownership in 2004. While Frank McCourt saw the FOX deal as his life vest, Bud Selig took it as an opportunity to correct an egregious error and regain control of the ship. Quite literally. Because when the Dodgers don’t make payroll this month, the next step will be Major League Baseball officially taking over the team.*
*Not to go all Joe Posnanski on you (god, I wish) with the asterisk, but I would just like to point out the irony of the Dodgers payroll dilemma. Due to back-loading the Manny Ramirez deal, they owe him $8.33 million in deferred payments by June 30, 2011. So the star McCourt coddled and whored out, the one he milked for every penny, even in the midst of a steroid scandal, is going to be the one that brings him down? Priceless. And perhaps the best case ever of Manny being Manny. Clearly, Frank McCourt is not a happy camper about this. His attorney, Steve Susman, whose name just sounds sleazy, released a statement expressing disappointment with the rejection, calling it “potentially destructive to the Los Angeles Dodgers,” and threatening legal action. I think that McCourt will most likely file suit to force Selig to approve the FOX deal or to obtain an injunction to stop him from taking control of the Dodgers. Both options seem like legal money pits with little chance of success. The one thing that McCourt needs is money and the only thing that could have provided it was the FOX deal; without it, he is running out of funds and time to fight his many courtroom battles. His best bet, in my opinion, is to get a cushy deal from Selig to voluntarily sell the team in exchange for a nice return on his original $430 million investment and some debt relief. His only other option is to quickly find a minority owner who will invest in the team – but who the hell is going to join forces with Frank McCourt? Especially after the Commissioner just publicly questioned his character and motives?
As politely as possible, Bud Selig called out Frank McCourt for his incompetence and assured Dodgers fans that they deserve better. And with the Commissioner’s rejection, Frank McCourt’s ship is sinking fast. If he has any honor left, he will simply go down with it.