Friday, May 6, 2011
Bud Selig due some blame for mess
By Ross Newhan Special to ESPNLosAngeles.com
Inexorably, we seem headed toward McCourt v. Allan H. (Bud) Selig -- potentially one of the most combustible court cases in baseball history.
Inexorably, there seems to be no other course for Frank McCourt if he wants to retain ownership of the Los Angeles Dodgers.
The baseball commissioner has already seized control of the club by appointing a trustee to investigate and operate all phases of the organization, and refused to approve a $3 billion television contract with Fox which McCourt insists could ameliorate his financial problems.
My impression is that Selig is trying to force the beleaguered McCourt out as owner and sell this flagship franchise to a new owner.
If Selig has been greeted by fans and media in general as something of a white knight, call that revisionist history since there were warning signs prior to McCourt's highly leveraged purchase in 2004 that he and wife Jamie lacked deep enough pockets to sustain long-term control.
Bud Selig -- and an unanimous endorsement by the 29 owners -- paved the way for Frank McCourt to buy the Dodgers.
Now Frank McCourt, according to court documents filed in his very public divorce case, is more than $400 million in debt. He needed a $30 million loan from Fox to meet his April payroll and will require, sources confirm, another loan to meet his second payroll obligation in May.
If he sues the commissioner, well, he is already paying lawyers in his divorce action and in a suit against his former Boston law firm.
Every new baseball owner must sign a covenant agreeing to the power of the commissioner to act in the "best interests" of baseball and agreeing not to sue the commissioner.
McCourt, however, is expected to charge that Selig has acted illegally and capriciously in appointing lawyer Tom Schieffer -- a former state legislator, diplomat and president of the Texas Rangers -- to take over operation of the Dodgers, a move seemingly foreshadowing Selig's intent to force McCourt out after seven years of embarrassing ownership.
In a recent news conference, McCourt stated emphatically that no one is going to tell him how to run his business or take it away from him.
But for fans and most media alike, McCourt has run his business in such a way as to turn one of baseball's proudest franchises into an attendance-sagging, security-challenged, budget-strained and turnover-riddled mess, which is why Selig's intervention has been welcomed so warmly.
Make no mistake, however. This white knight portrayal is surprising and misleading.
It seems to have been forgotten that Selig shares a responsibility in the demise of the Dodgers under the McCourts.
If he had rejected their suspect overture at a time when he had plenty of evidence to justify such a move, we wouldn't have been forced to endure this wretched chapter in Dodgers history and we wouldn't be facing this uncertain future.
For starters, Frank (whose grandfather had been a part owner of the Boston Braves and whose family had been involved in Boston-area real estate development for generations) and wife Jamie had already finished far back in bidding for their hometown Boston Red Sox in 2002, when a group of Selig favorites led by John Henry, Larry Lucchino and Tom Werner took the bidding for the team and New England Sports Network beyond $700 million in an auction that found the McCourts dropping out at an early juncture.
Also, a cursory investigation by the McCourts into the Angels during the same time frame never reached a substantive level, according to sources familiar with those talks but not authorized to discuss them publicly. Arte Moreno bought the Angels from the Walt Disney Co. for a modest $182.5 million in 2003. (Disney is the parent company of ESPN.)
In the fall of that year, the McCourts began serious discussions with Selig and other baseball officials regarding the Dodgers. Jason Reid, then covering the team for the Los Angeles Times, partnered with the then-national baseball columnist at The Times (yes, myself), to repeatedly produce stories regarding the McCourts' suspect resources based on material from sources familiar with the talks but not authorized to discuss them.
In addition, both of the McCourts' hometown newspapers raised questions about their finances.
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In the Boston Globe, for instance, business columnist Steve Bailey began what he cynically billed as the "Frank McCourt Appeal, as worthy a cause as you will find in Boston. Our motto: Please give so he can go."
Bailey also wrote: "Few in this town have talked the talk more and walked the walk less. ... He was going to buy the Red Sox. He was going to build a new Fenway on the waterfront. Instead, 25 years after McCourt bought his South Boston land from a bankrupt Penn Central, what we have down there is acres of parking lots."
Ultimately, Selig's support of the McCourts' highly leveraged purchase of the Dodgers for $430 million from Rupert Murdoch's media giant News Corp. came as a shock.
Murdoch, with his regional networks up and running, was anxious to have his company end six years of tumultuous Dodger ownership, an appropriate prelude to what has followed.
In reflection, it is almost impossible to wrap up News Corp.'s six years succinctly, but among the headline events:
Corporation executive Chase Cary, undermining longtime general manager Fred Claire, traded popular catcher and future Hall of Famer Mike Piazza without his GM's knowledge; Claire and manager Bill Russell were fired in a midnight meeting at Dodger Stadium on the same day that former club executive Al Campanis died; Kevin Malone was hired as general manager, billed himself as "the new sheriff in town" and immediately bid against himself in signing pitcher Kevin Brown to a then-record seven-year, $105 million contract; there was a two-year period of toxic relationship between Malone and manager Davey Johnson; there was the firing of club president Bob Graziano and his almost immediate rehiring; there was the elevation of longtime former manager Tom Lasorda to the GM position and his trading of the young Paul Konerko, who has emerged as an All-Star player; and, among other distracting episodes, there was the contract disruption of a spring training camp with a volatile exchange of angry words between Gary Sheffield and club chairman Bob Daly.
Ultimately, claiming annual Dodger losses of $40 million, Murdoch was willing to loan the McCourt's $145 million of their $430 million purchase price, accepting as collateral the Boston parking lot that McCourt and his wife owned and which News Corp. ultimately foreclosed on and sold, according to court documents.
In addition, multiple sources told me, Murdoch pressured Selig because Murdoch had at that time also talked Team McCourt into accepting an undervalued, multiyear TV contract that may have saved Murdoch as much as $500,000.
Given Murdoch's financial tentacles into baseball at a time when other networks were dropping out of baseball coverage, Selig ignored some red flags and approved the deal.
"It was a total surprise," a former Dodgers executive told me this week. "I remember talking to several CFOs around baseball at the time and none of them thought it was going to happen."
However, a senior MLB official said in reflection: "The McCourts' finances actually seemed in order at the time, but it is the way that they have handled the club's business operation since then that now makes the approval of their purchase look so bad."
Now, with Frank and Jamie having operated the Dodgers as if the club was their personal ATM, and their widely covered and volatile divorce having added to the shame of their absent security amid an obvious change in crowd behavior at Dodger Stadium, Selig has taken the right step after taking the wrong one in 2004.
Of course, he is an acknowledged consensus builder and did not act alone in reaching the decision to approve McCourt (it was unanimously endorsed by the 29 owners), but he is the man in charge and, thus, an accomplice to the sorry and volatile situation that exists today.
Ross Newhan has covered baseball in Southern California for more than 50 years and was the national baseball columnist at the Los Angeles Times from 1986 through 2004. He has received numerous awards for his coverage, and in 2001 was voted by his peers to receive the J.G. Taylor Spink Award, which led to his inclusion in the writers' display at the Baseball Hall of Fame in Cooperstown, N.Y.