Major League Baseball shares much of the blame for the Dodgers’ collapse
By Jason Reid,
Major League Baseball’s takeover of the Los Angeles Dodgers last week prompted some in the media to praise Commissioner Bud Selig.
Columnists lauded Selig for finally beginning the process of booting embarrassing owner Frank McCourt from the famed franchise, portraying Selig as a baseball-loving liberator of long-suffering Dodgers fans. Instead of rose petals, however, something else should be laid at Selig’s feet: blame.
Because without Selig’s backing, the cash-strapped McCourt wouldn’t have acquired the Dodgers in a highly leveraged purchase. Without Selig, McCourt couldn’t have used the equity in the franchise to fund his lavish lifestyle while massive debt mounted. And without Selig, a fraud wouldn’t have become the owner of one of baseball’s flagship ballclubs. Credit Selig with an assist for everything McCourt did to tarnish the Dodgers’ iconic brand.
Mayor McCheese was more qualified to run the Dodgers than “McBankrupt,” the most popular expletive-free nickname for McCourt. That was obvious to me as early as October 2003 when, in my role as the Dodgers beat reporter for the Los Angeles Times, I was the first to report on McCourt’s efforts to buy the team.
Citing losses of $40 million annually, media giant News Corp., the Dodgers’ parent company at the time, was anxious to sell. News Corp. bought the franchise in 1998 from the O’Malley family, under whose long, skillful guidance (they owned the Dodgers for nearly 48 years) it became a model for ownership stability.
News Corp. was frustrated in its inability to finalize a deal with previous identified bidders, and McCourt was eager to join the exclusive sports ownership fraternity. But he failed in previous attempts to purchase the Boston Red Sox and Los Angeles Angels amid questions about his finances, so it seemed strange News Corp. and McCourt were moving so quickly together.
Teaming with Ross Newhan, who was then the national baseball columnist for the Times, we produced reports about McCourt’s lack of financial resources in the months before owners voted unanimously, much to our surprise, to approve the sale of the team to McCourt and his wife, Jamie, in January 2004.
There were enough red flags to derail McCourt’s ownership bid at many points, but News Corp. also owns Fox, MLB’s national television rights holder. After six tumultuous seasons directing the Dodgers, News Corp. officials obviously wanted their partners at MLB to help them out with McCourt, and Selig obliged with his thumbs up to the sale. The details became a matter of public record last year during the McCourts’ messy divorce and ownership battle that’s still playing out in a Los Angeles court.
McCourt bought the team primarily with loans. Fox loaned McCourt $145 million of the $430 million purchase price and later essentially foreclosed on the Boston parking lot McCourt used as collateral and sold it.
The McCourts reportedly siphoned millions from the club to fund their luxurious tastes (maybe it’s just me, but paying a Russian physicist six figures to channel positive energy to the team seems a bit much), which, obviously, was their prerogative as owners.
Except the Dodgers had enormous debt service because of the McCourts. And Frank McCourt continued to seek loans to meet the interest payments and run the club’s operations while living the high life.
McCourt did not maintain the payroll levels he initially promised he would, and once-picturesque Dodger Stadium became a dump compared with when the O’Malley family ran the place. With Fox eyeing a long-term deal for the Dodgers’ cable television broadcast rights, it continued to underwrite McCourt with millions in loans, which was among the reasons Selig stepped in to shut down the circus he helped create.
MLB officials will tell you Selig bears no responsibility for what has occurred in Los Angeles. There’s no way Selig could have envisioned McCourt’s tenure would be so disastrous, they contend, and point to the club’s increased revenue — it has almost doubled during McCourt’s watch — as proof his business plan would have worked if McCourt reinvested more in the team instead of padding his personal bank account.
The Dodgers’ increased revenue wasn’t the result of innovative business practices. McCourt raised prices, cut payroll and let things at the stadium slide.
After a San Francisco Giants fan was critically beaten (he’s still in a coma) in a stadium parking lot on opening day, it came to light the Dodgers had not had a full-time security chief for months. They began a season without one for the first time since 2005.
Tom Schieffer, former president of the Texas Rangers, has been appointed trustee of the Dodgers and will oversee business and day-to-day operations. McCourt, though, probably won’t go quietly. He’ll likely attempt to retain the club through legal challenges, but it’s highly doubtful he’ll prevail.
Selig made the right move in shutting down McCourt. He did what was needed to begin restoring the faith of the fan base. He acted as a commissioner should, but he shouldn’t be called a hero. Labeling him as an accomplice would be more fitting.