From yesterday’s LA Times. On deck in the Dodgers’ bankruptcy case: the Florida Marlins?
Read the full story here.
Frank McCourt goes on a fishing expedition
Dodgers owner, whom Major League Baseball is trying to push out of the game, wants a bankruptcy judge to force Selig to divulge financial data from every other club, particularly the Florida Marlins.
By Bill Shaikin
7:55 PM PDT, September 26, 2011
Could be, if Frank McCourt gets his way. As the bankruptcy proceedings increasingly resemble a grudge match cloaked in legal briefs, with Bud Selig threatening to banish the Dodgers from the league in order to rid it of McCourt, the Dodgers’ owner might respond by trying to take down the commissioner.
The Marlins could be in the collateral damage.
In July, U.S. Bankruptcy Judge Kevin Gross wrote of what he called “the underlying feud between the Commissioner and … Frank McCourt” and added: “It appears that their dispute will shortly be before the Court.”
Selig’s argument for kicking out McCourt boils down to this: You consented to our rules, you broke our rules, and we don’t want you in our club any more.
“Compliance with the Baseball Agreements is the price of membership in Major League Baseball,” league attorneys wrote in a court filing Friday.
And what is most prominent among Selig’s grievances?
“A Club owner must be well-capitalized and cannot use the team as a personal ‘cash cow,’ ” the filing read.
That could bring us to the Marlins — perhaps uncomfortably for Selig, and for Jeffrey Loria, the team’s owner.
Well-capitalized? McCourt never was, yet Major League Baseball approved his purchase of the Dodgers, primarily with loans from Fox and Bank of America.
MLB approved Loria’s purchase of the Marlins with a loan from the league itself, as part of Selig’s plan to steer Florida owner John Henry to the Boston Red Sox and kill the Montreal Expos.
Cash cow? Selig claims McCourt diverted more than $180 million of Dodgers revenue for personal use, an allegation McCourt denies.
Yet, Loria got more than that in revenue sharing — $198 million over six years of data compiled by the Business of Baseball website — from major-market owners under the condition that money be put into the team.
In 2006 and 2008 the Marlins reportedly took in more than twice as much from other owners as they spent on their major league payroll — and before they sold a single ticket or took in a dollar from local and national media contracts.
In 2010, one year after the Marlins got a new ballpark funded largely by public dollars, documents obtained by Deadspin showed the Marlins had turned a $38-million profit in 2008. In addition, Yahoo reported that the Marlins paid another $8 million over two years to a company controlled by Loria and the club president, David Samson.
“The swindlers who run the Florida Marlins,” Yahoo columnist Jeff Passan wrote.
Under pressure from MLB and the players’ union, the Marlins agreed last year to make sure revenue-sharing money went back into the team. Yet, Selig never threatened to kick out Loria, or the Marlins.
The Marlins needed to keep payroll down to show the positive cash flow necessary for ballpark construction financing, according to a high-ranking baseball official who could not be identified because of the litigation with the Dodgers.
“It had nothing to do with homes in Holmby Hills or Malibu, or private jets, or salaries for the owners’ kids,” the official said. “What makes the Dodgers different is the stripping of club assets and the violations of baseball rules.”
How do other owners spend club revenues? What defines stripping of club assets?
The way McCourt figures to see it, the answers require sworn testimony and financial data from every other owner, and from the commissioner himself. That way, the judge can see whether there truly is one standard for McCourt and another for the Marlins, and the New York Mets, and every other team whose owner is on good terms with Selig.
Gross, the judge, might not care.
He might decide MLB has the right to uphold the rules to which McCourt agreed. For McCourt, that would be game over.
The judge might decide he wants to limit the proceedings to the Dodgers. When McCourt’s attorneys wanted to explore why MLB would offer a bankruptcy loan at 7% interest to the Dodgers this year after extending a bankruptcy loan at 1.6% interest to the Texas Rangers last year, Gross ruled that he did not need to hear about the Rangers case.
However, if Gross allows McCourt to pursue his desired strategy, there would be two obvious results: McCourt could put Selig on trial, and the case would extend well past the World Series, dominating an off-season that starts all too soon for the Dodgers.
Copyright © 2011, Los Angeles Times