Friday, June 17, 2011
McCourts reach divorce settlement
LOS ANGELES -- Jamie and Frank McCourt agreed Friday to have a one-day trial to determine if title to the Los Angeles Dodgers is in Frank McCourt's name or if the team should be considered community property in their divorce, the former couple and their attorneys announced.
The agreement anticipates Major League Baseball's approval of a lengthy TV contract between the Dodgers and Fox, Frank McCourt said outside court. That deal has been reported to be worth $3 billion and Frank McCourt would receive $385 million upfront.
"I fully expect MLB to approve the Fox transaction," Frank McCourt said, according to the Los Angeles Times. "MLB has taken the position that, before they approved the transaction, they wanted to see either a settlement of the divorce, or Jamie's consent, or an order from the judge. Today, they received all three. I fully expect that they will be good to their word, and they'll approve the transaction in a timely way."
Frank McCourt also expressed extreme confidence in the outcome of the trial set for Aug. 4 and he said that he and his former wife had already agreed on what would happen in either outcome.
"It has dragged out far too long," Frank McCourt said, according to the Times. "I'm sorry that the fans have had to go through this. I feel horrible about it. But I'm really pleased and relieved today that we can finally put this phase behind us and move forward and go play and win baseball games."
Dodgers manager Don Mattingly plans to continue to keep his focus on the field.
"It sounds like it was good news for him. I don't know that much about it, what is going on or what that means," Mattingly said. "I just know we have to keep our focus on what I talked about in the beginning, taking care of our business. I don't think anything will change for us one way or the other."
According to Mattingly, the drawn-out process hasn't really affected the players.
"It's really an excuse that is kind of useless," he said. "A lot of things are going on in everyone's lives, whether it's kids or whatever, that they have to put behind them when they get here."
If Superior Court Judge Scott Gordon rules the Dodgers are community property, the team, stadium and surrounding property -- worth hundreds of millions of dollars -- would be split between the former couple and "be sold by the parties in an orderly manner under the court's supervision," according to the settlement.
"We'll cross that bridge when we get to it," Frank McCourt said, according to the Times.
If Frank McCourt is awarded ownership, Jamie McCourt would receive $100 million, all but one of the couple's homes and would receive indemnity from tax liability.
But it's highly unlikely MLB would approve the TV deal, a source told ESPN The Magazine's Molly Knight, in part because Gordon could force a sale of the team and saddle a new owner with what could be a below-market television contract in the future.
"If MLB rejects the Fox deal next week we are back to square one," the source told Knight. "This is essentially breaking the logjam and putting (commissioner Bud) Selig to the test."
MLB spokesman Pat Courtney declined comment. Dennis Wasser, an attorney for Jamie McCourt, hopes the TV deal will be finalized early next week.
Terms of the settlement spell out how the $385 million from Fox would be spent. Each party would receive $5 million for lawyers' fees. Each party would receive $5 million to use as they see fit. Approximately $235 million would be used for the Dodgers (including repayment to Frank McCourt money that was advanced to the team in 2011 but not exceeding $23.5 million). Another $80 million would be used to pay off indebtedness. And the remaining $50 million would be put in an account subject to the court's orders.
Frank McCourt said all other issues in the divorce were settled, and a hearing set for Wednesday where Jamie McCourt was expected to ask Superior Court Judge Scott Gordon to order the sale of the team was canceled.
Until ownership of the Dodgers is decided, the terms of settlement stipulate that Frank McCourt will pay Jamie McCourt $650,000 monthly for support.
The McCourts' lawyers had spent several sessions in front of Gordon to reach an agreement.
"The most important thing for me is to have resolution," Jamie McCourt said, according to the Times. "I think it's the most important thing for my family, my children, certainly the fans, and certainly baseball. The quicker there is resolution, which is what we have been trying to accomplish for the past two years, the better."
In December, Gordon deemed invalid a postnuptial marital agreement that gave Frank McCourt sole ownership of the Dodgers. That cleared the way for Jamie McCourt to seek half of the team under California's community property law.
In April, Major League Baseball took the extraordinary step of assuming control of the troubled franchise. Former Texas Rangers president Tom Schieffer was appointed to monitor the team on behalf of Selig. Selig said he took the action because he was concerned about the team's finances and how the Dodgers are being run.
Frank McCourt also has had to contend with meeting team payroll. He's managed several times since the beginning of the season to pay the team's bills -- he took a $30 million loan from Fox earlier this year -- but has to account for deferred compensation for some former players by the end of June.
Among them is retired slugger Manny Ramirez, who is owed nearly $7 million on June 30 as part of a two-year, $45 million contract he signed with the Dodgers.
The former couple's lavish lifestyle was exposed in court documents, where it was revealed that they took out more than $100 million in loans from Dodgers-related businesses. Their spending habits were likened to using the money from the team as though it were their personal ATM or credit card.
When pressed by a reporter about whether he has enough money to cover team expenses without MLB's approval of the TV deal, McCourt sounded confident.
"We're going to proceed and do and meet all of our obligations as we always have, yes," he said.
Neither of the McCourts has acknowledged one another throughout the divorce proceedings. At one point Thursday, they sat a few feet away from each other, without their attorneys, in Gordon's courtroom. Jamie McCourt busied herself on a tablet, while her ex-husband sat quietly.
Information from The Associated Press and ESPNLosAngeles.com's Tony Jackson was used in this report. Molly Knight is a reporter for ESPN The Magazine.