Ever since news broke that Frank McCourt had finally agreed to stop fighting MLB and sell the Dodgers, we’ve been somewhat cautious in our jubilation. Sure, the idea that there might finally be a light at the end of the tunnel after the years of litigation and embarrassment was fantastic – but who among us actually trusts this man to do anything he says? It’s massive distrust like that which makes hysterical conspiracy theories like this one actually seem viable. While the idea put forward there that McCourt might actually just be playing a long con to keep the team through the court system was probably never close to realistic, we’ve always been concerned about the provision in his agreement with MLB that allows him to keep the parking lots around Dodger Stadium, if he so chose. (You can chalk that up to sin #2 on his large list of offenses, splitting the team and property into a variety of different entities, thus allowing him to claim that the parking lots weren’t under MLB’s overview.)
It’s this potential pitfall which serves as the focus of the first of two ownership-related Bill Shaikin stories in the Los Angeles Times today:
The Dodgers are in bankruptcy, but the McCourt entity that controls the Dodger Stadium parking lots is not. In order to get McCourt to sell the team without a round of litigation over the parking lots, Major League Baseball agreed to grant him “sole and absolute discretion” over whether to keep or sell the land.
The agreement stipulates that prospective buyers “may submit bids that include the purchase of the parking lots.”
If the lots are not sold with the team, the new owner would lease them from McCourt for $14 million a year. The annual lease payment would rise in 2015, and every five years thereafter.
As Shaikin goes on to detail, there’s competing schools of thought on this, one side claiming that McCourt is just using this as a tactic to drive the price up, and the other suggesting that he’d attempt to develop the land in an effort to further bolster his bank account and restore his horrible local reputation. My gut feeling is that McCourt probably will sell the lots, take his hundreds of millions, and wipe his hands of the entire thing, but until every last contract is signed I won’t stop worrying that we’ll never actually be rid of him. And who would actually want to go park in the lots, knowing that the cash you hand to the attendant would go right to McCourt?
Shaikin also follows up with news on a few of the potential groups we looked earlier this month, suggesting that Peter O’Malley’s group might team up with the Stanley Gold / Disney family group to make a bid. That’s mildly interesting, but here’s something a bit more juicy:
Also Wednesday, federal agents arrested Jon Horvath, a New York technology analyst; he is charged him with insider trading. The Wall Street Journal reported that Horvath works at a division of SAC Capital Advisors, whose founder Steven Cohen is bidding for the Dodgers.
Two former SAC fund managers have pleaded guilty to insider trading charges, but this is the first time such charges have been leveled against a current SAC employee, according to the Wall Street Journal. Horvath’s attorney said his client has done nothing wrong.
Neither Cohen nor his firm has been charged. Still, the development is particularly ill-timed for Cohen, as Major League Baseball conducts investigations on potential Dodgers bidders. The league has agreed to approve up to 10 bidders, after which outgoing owner Frank McCourt will select the winner.
Despite possibly being the most wealthy bidder in the field, I’ve been pretty pessimistic about Cohen from the start. Here’s to hoping this news torpedoes his candidacy before it even gets started.