Dodgers' Frank McCourt Rejected by MLB

by John M. Curtis
(310) 204-8700

Copyright June 21, 2011
All Rights Reserved.                                         

         Major League Baseball Commissioner Bud Selig rejected Dodger owner Frank McCourt’s proposed $3 billion contract extension with FOX Television, which would have netted Frank an initial $385 million.  Selig’s veto of the FOX deal makes all but certain MLB’s hostile takeover of the Los Angeles Dodgers, now embroiled in a bitter divorce battle with former Dodger President and disputed co-owner Jamie McCourt.  When Los Angeles Superior Court Judge Scott M. Gordon approved the McCourt’s divorce settlement June 17, Frank thought it was a slam-dunk to approve the $ 3 billion TV deal.  Where Frank miscalculated and where he and his attorneys show know insight, is MLB’s right to enforce their franchise agreement prohibiting Frank from suing MLB from any action whatsoever.  MLB simply isn’t willing to allow Dodger proceeds to pay for Jamie’s divorce.

            When MLB appointed April 27 former Texas Ranger President J. Thomas Schieffer to monitor for the Dodgers, Frank showed defiance.  “I’m a self-made guy.  Every dollar I’ve made I’ve made the old fashioned way.  Nobody handed the Dodgers to me and nobody’s going to take it away.  I’m not going anywhere,” said Frank, defying Selig and firing warning shot over MLB.  Frank apparently never read his franchise agreement that makes clear that “ownership” was heavily qualified, giving the commissioner supreme authority.  “. . . In furtherance thereof, the Clubs on their own behalf and including, without limitation, on behalf of their owners, officers, directors and employees) severally agree to be finally and unappealably bound by actions of the Commissioner and all other actions, decisions, or interpretations taken or reached pursuant to the provisions of the Constitution . . “

            McCourt’s legal team when they bought the Dodgers in 2004 agreed to Article II and Article VI of Baseball’s constitution, agreeing to “severally waive such right of recourse to the courts as would otherwise have existed in their favor,” precluding any lawsuit arising from any dispute between ownership and MLB.  When the Texas Rangers declared bankruptcy May 10, 2010, Commissioner Selig and MLB rejected owner Tom Hick’s FOX TV extension, declaring that no team could use the proceeds of future revenue to pay personal debts.  Frank sees himself as singled out but MLB’s principle is clear:  Any and all proceeds must go toward ballpark improvements and player personnel.“We don’t accept the premise.  We don’t believe Commissioner Selig has the right to jump the gun and send a receiver to take control of the Dodgers,” said Frank April 27, announcing MLB would take back the franchise.

            McCourt’s reaction to Selg’s rejection of the $3 billion FOX TV deal came promptly through his attorney Steve Susman:  “We are extremely disappointed with the Commissioner’s rejection of the proposed FOX transaction which would inject $235 million into the Los Angeles Dodgers.  As Commissioner Selig well knows, this transaction would make the Dodgers financially secure for the long term and one of the best capitalized teams in Major League baseball,” said Susman, totally ignoring his client’s unshakable obligations under his MLB franchise agreement:  No litigation against MLB.  McCourt called Selig’s actions to take over the franchise “un-American,” referring to the April 27 seizure of his personal property.  Frank knows the difference between a “franchise” and his personal property but chooses to ignore the agreement he signed with MLB.

            Faced with a $9.8 million payroll June 30, Frank is running out of options to meet his current nut.  Apart from how Frank plans to borrow from Peter to pay Paul, he lost his right to his franchise the day he publicly exposed his ugly divorce.  When court records revealed Oct. 28, 2009 the extent of the McCourt’s extravagance, the public soured on the McCourt’s ownership.  Wild profligacy treated MLB and the public to how the McCourt’s managed their MLB franchise by pinching pennies with team and sparing nothing when it came to their own luxuries.  “Commissioner Selig’s letter of rejection is not only a disappointment but worse, is potentially destructive to the Los Angeles Dodgers, and Major League Baseball . . . “ said Susman, promising to pursue every legal remedy.  Susman needs to read his client’s franchise agreement before he wastes anymore of Frank’s borrowed cash.

            Blowing more smoke, Frank McCourt has played his best bluff and must no face the music that the Dodgers will now be sold to the highest bidder.  Instead of threatening lawsuits, specifically forbidden by his franchise agreement with MLB, McCourt should try to make amends for his egregious mistakes that hurt the MLB, the Dodgers, the fans and City of Los Angeles.  “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,” said Selig, concerned that Frank would suck the equity out of the franchise for the next owner.  When Selig looks at potential owners, he needs to look carefully at billionaire NBA Champion Dallas Mavericks’ owner Mark Cuban.  Cuban’s fiscal solvency and personal maturity put him in good stead.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com.and author of Dodging the Bullet and Operation Charisma.

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