Frank McCourt Will Haunt Your Dreams Until The Last Possible Second
January 18, 2012 at 7:30 pm | Posted in Frank McCourt | 55 Comments
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.
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Huh? I don’t get it, this isn’t news. We’ve been talking about the fact that the Dodgers parking lot isn’t part of the deal for weeks now. Hell, half my comments have referenced that.
Comment by Greg— January 18, 2012 #
You’re going to begrudge a man the chance to do some opportunistic Photoshopping?
I know, though. Not entirely sure why Shaikin’s bringing it up now, because it is something we’ve talked about in the past. News is so slow these days, however, that it’s certainly a valid discussion point.
Comment by Mike— January 18, 2012 #
Haha. The photoshop is pretty badass.
Comment by Greg— January 18, 2012 #
Agreed. First Prize!
Comment by Tommy Blackjack— January 18, 2012 #
Holy crap! That is a truly terrifying photo! Also, Frank looks like this: http://www.nhptv.org/natureworks/graphics/opossum11sm.jpg
Comment by crushinator— January 18, 2012 #
What is great is you used a picture with smog in the backround as well. Making it all the more terrifying.
Comment by The Hatch— January 19, 2012 #
I held off on the devil horns, though.
Comment by Mike— January 19, 2012 #
Great photoshop, I want a t shirt.
As for Cohen (Les Grossman doppelganger), not that most owners aren’t scumbags, but he particularly repugnant and it would turn my stomach to root for a team owned by him.
Comment by Lex S— January 19, 2012 #
Wow. Before I even read the post, I just have to say: Best title and picture ever.
Comment by Ben— January 18, 2012 #
$14 mil at 7% CAP rate? $200 mil for parking lots? I mean listen, we’re sitting here talking about parking lots, not a team, not a ball park, not a stadium, but we’re talking about parking lots. Not the team that I go out there and cheer for and watch every game like it’s my last but we’re talking about a parking lot. How silly is that?
Comment by Ken— January 18, 2012 #
+1
Comment by Paul— January 18, 2012 #
haha i totally had allen iverson’s rant about ‘practice’ in my head while reading that.
‘we talkin’ bout practice, man. practice. not a game, not, not a game. practice. we talkin’ bout practice.’
Comment by sumdumfu— January 19, 2012 #
we’re talkin bout a dickhead, man, not an owner, a dickhead. Not an owner that spends money, not an owner that cares about the team, not an owner that cares about the fans, a dickhead, we’re talkin about a dickhead.
Comment by john m— January 19, 2012 #
Your graphic should be the 50th anniversary patch!
I think this tidbit from the WSJ article actually finishes off Cohen’s bid. The Feds are looking into SAC “including trades in an account overseen by Mr. Cohen, according to people familiar with the matter. Mr. Cohen declined to comment through a spokesman.” That fact is enormous – it means that Cohen is actually a soft target.
Comment by RS— January 18, 2012 #
By the way I hope the Stows sue the sh&t out of his non-bankrupt entity that owns the lots.
Comment by RS— January 18, 2012 #
Hell, yes.
Comment by Jeff M.— January 18, 2012 #
Soooo, a few months ago, the Times ran a story about how you could tell the guard at the Elysian Park entrance to the Stadium that you’re going to the gift shop. But instead of going to the gift shop, just keep walking past it, and hang out in the bleachers and eat lunch. I decided to try that on Saturday, and it was awesome.
Yes, I’m aware that my story has nothing to do with the article. But all this talk about parking lots and stadiums got me thinking about it. I’m just saying.
Comment by Jeff M.— January 18, 2012 #
I remember that story, it was the only worthwhile thing Plaschke has published in years. That really still works? Awesome. Pictures next time!
Comment by Mike— January 19, 2012 #
Yeah, you’re not kidding about that guy. And I DID take pics (there was a crew setting up for a motocross event). Want me to email them?
Comment by Jeff— January 19, 2012 #
Bleacher? Thought it was the TD? And i thought everyone knew this……..
Comment by DodgersKings323— January 19, 2012 #
You’re right, I misspoke when I said Bleachers. It was indeed the top deck. And the whole idea was news to me. Damn Plaschke for actually being useful!
Comment by Jeff— January 19, 2012 #
All that would mean is that we would have to boycott the parking lots in future seasons. Public transportation is better than putting a nickel in McCourt’s account.
Comment by SamAdams— January 19, 2012 #
Hmm, but won’t McCourt be charging the Dodgers rent regardless of gate receipts. Depending on the terms it wouldn’t really matter if the lots were empty or full, he’d still pull in a cool $14+ mil. a year for doing nothing more than owning parking lots. I would assume the Dodgers would use the parking costs to offset their rent to McCourt – or maybe I am wrong and he keeps rent and parking receipts. That’s why I want the Stows to ream him on this point. They claim that Brian’s care could run $50m – in which case, if there is no deal to get the lots from McC, here’s hoping they take every penny he collects.
Comment by RS— January 19, 2012 #
I was thinking about that, it might be a great thing for LA. It would force people to use public transportation to get to the games. The savings to the city alone would be in the millions if more people did that!
This is the first time that I’ve ever imagined that something good could come out of McDouchebag owning the land surrounding the stadium!
If I were paying over a billion for a team I sure as hell would not want to NOT own the land immediately surrounding MY stadium!?! I sure hope that potential buyers fight that one and don’t allow him to keep that land.
Comment by Miguel Salcido (@miguelsalcido)— January 19, 2012 #
This is one of the areas where not being a LA native puts me on the outside, because the idea of not having public transportation to a major stadium blows my mind. I’ve spent years in NYC and Boston either walking to parks or taking trains directly to stops which are immediately adjacent. I get that no one’s building a subway stop at Dodger Stadium, but the fact that there’s not more express bus service there is ridiculous.
Comment by Mike— January 19, 2012 #
As someone who has lived in LA all their life, I can tell you in one word about having 45,000 people taking public transportation to Dodger Stadium….umm NO. Thats why everyone out here drives. The public transportation out in Socal, is nothing like the public transpos of New York. The public transportation out here sucks. Which is why everyone drives.
Comment by Format— January 19, 2012 #
I agree completely with Format. My plan if the lots aren’t sold (and like I say below, I’m pretty damn sure they will be) is to arrive early and park outside the stadium – on Academy or Sunset – and walk in. I can use the exercise anyway.
Comment by Dave Pomerantz— January 19, 2012 #
45,000 people would not be taking the public transport, at least half would still be in their cars. Public transport to DS is desperately needed actually.
Comment by Lex S— January 19, 2012 #
Yeah, Lex hit on what I meant. I would never ever expect 100%, or even 80% or 60% of people to abandon cars to get to DS. But it’s ridiculous that there’s not even an option that works for say, 20% of people. I’m always reading about how getting out of the parking lots is a nightmare, and simply reducing that many people from the car lines would be a huge help.
Comment by Mike— January 19, 2012 #
The reality is, public transportation doesn’t work in cities which sprawl. People like to bitch and moan about LA’s lack of public transportation but it’s exactly the same in other cities which sprawl, like Houston and Dallas.
Just imagine the number of busses and trains that would need to be on the tracks in order to cover the 50 miles from my house to DS?
Comment by Greg— January 19, 2012 #
I’m sure most of you are aware of this, but public transportation to Dodger Stadium is free on all Metro buses and trains with your ticket to the game. The stadium express goes directly from Union Station to the stadium.
Of course, I’m one of the few who’s willing to tolerate the sights, smells, and indirect routs that comprise LA public transportation, but the option is there.
Comment by Paul— January 19, 2012 #
Exactly@Paul! I’ve taken public transportation to DS before and ya, it’s not great but it’s better than sitting in the parking lot breathing in all the fumes while you’re not moving.
Comment by Greg— January 19, 2012 #
This
Comment by DodgersKings323— January 19, 2012 #
Yeah but union station is like a five minute drive from DS. And someone like me, and Dave above, lives too far away to make taking public tranport worthwhile. Though driving to U.S. to take the bus to not pay for parkking would be worth it as long as I felt I wasn’t contributing to Frank’s pocketbook.
Comment by crushinator— January 19, 2012 #
Depending on where you are, as you say, the key is getting to grand central. From Irvine, I either have to take metrolink or amtrak to get to grand central. But more often I drive to either Artesia or Long Beach to catch metro (green-blue-red or blue-red). It’s not a bad option. For most of my customers downtown, I try to take public transportation as well. But again, this is the reality of living in a city that sprawls.
Comment by Greg— January 19, 2012 #
So what about this? “The league has agreed to approve up to 10 bidders.” “Up to” 10 could be as little a one no? So based on your post the other day, maybe Selig only approves, say, 2 bidders and that is his way to force McCourt to sell to someone Selig is comfortable with.
Comment by The Hatch— January 19, 2012 #
Well I think McCourt would sue MLB for bad faith, that would be fun; the creditors would freak out because they want a frothy auction so they would appeal to the bankruptcy court maybe; the MLB owners would be uncomfortable because they want franchises to skyrocket in value and don’t want to cut the auction off at the knees; and at least three groups have strong baseball ties (Gilbert, Torre, Kasten). Finally Frank has to approve the sale. He’s not going to do that if Bug Selig goes to war with him unless one of the two bidders showers him with $2 bln.
Comment by RS— January 19, 2012 #
Tailgate against the rules pregame, and know the McCourt family no longer owns the Dodgers. Go Blue!
Comment by dodgerccp— January 19, 2012 #
Frank WILL sell the lots, guaranteed. He’s not a real estate developer, like has been so often claimed, he’s a real estate speculator. His MO is to buy a parking lot with great location, “invest” all kinds of money into plans for it (but really, most of the money circles right back to him and his cronies), wait for excitement over those plans to increase the value of the land, then leverage it into something else without ever doing a damn thing to the land. That’s what he did with his Boston parking lots, which he leveraged into the Dodgers, and that’s what he’s doing with the Dodger parking lots.
Comment by Dave Pomerantz— January 19, 2012 #
The stuff that Cohen has actually gotten away with is much, much worse than the insider trading his firm will get nailed for. Like I’ve said several times over the past few weeks, the guy is one of the worst human beings on the planet.
Comment by The Dude Abides— January 19, 2012 #
Would/should the Dodgers sign one more P, specifically FA RH Rich Harden? Could he be great in the Dodgers bullpen? I still like the idea of Harden in Dodger Blue as the last offseason addition. Go Blue!
Comment by dodgerccp— January 19, 2012 #
A bit off topic but is anyone else disgusted with seeing Dodger Stadium turned in to a Supercross track every year? They just posted a picture of it on the Dodgers FB page.
Comment by Justin— January 19, 2012 #
Doesn’t bother me. No different than Wrigley hosting a hockey game or Yankee Stadium having a football bowl game, in my book.
Comment by Mike— January 19, 2012 #
It makes me sad to see any beautiful baseball field torn up for any reason. Plus, I hate supercross.
Comment by Dave Pomerantz— January 19, 2012 #
I’m happy they finally are, i hated having to go to anaheim to see the monster trucks
Comment by DodgersKings323— January 19, 2012 #
Supercross? Really?…Supercross?
Comment by Justin— January 19, 2012 #
One of the bidders for the Dodgers should bring Mr. Bryan Stow in as an investor for $1 with the option to purchase additional shares/member units in the Dodgers organization or the entity that owns the parking lots..
Comment by Ken— January 19, 2012 #
Hey Mike! I’ve been looking for a good dodgers blog for years, finally stumbled upon your site. Great work man, I love it! And I would’ve added horns ;)
Comment by Jesse— January 19, 2012 #
Wow, that was one lucky stumble. MSTI is one of the best sports blogs out there!
Comment by Wil— January 19, 2012 #
Thanks! and welcome.
Comment by Mike— January 20, 2012 #
Frank keeping the lots puts us, the fans, in such a terrible position. He’s getting his money one way or another, because of those contractually-guaranteed payments. Now if we as fans refuse to use the lots, it actually would hurt the new ownership group. They’d have to come out of pocket to pay Frank if the parking revenue is insufficient to cover the payments. And what about when he raises the payments? I figure about a million cars park at DS per season (maybe less, but a decent bet based on attendance of 3-4M annually), meaning if he charges $14M per season, then ownership has to charge $15 per car to cover the payment. If he raises that to $20 or $25M, then we’ll all likely be paying $20/$25 per car, unless new management decides to eat the cost.
My only thought for new ownership, if they are unable to secure the lots in the transaction, would be to try to starve Frankie out. Play his own game AGAINST him. Engage him in protracted litigation and deny him his payments. Argue that the transfer was a sham, that the contracts are invalid, and try to force him to spend whatever little money or equity he has left to defend himself. Hopefully, if he keeps the lots, he will be nearly devoid of liquidity and forced to mortgage them to defend the suit. Bleed him as dry as possible. Then negotiate a sale.
Hopefully, someone actually bids to take these lots with the team, because McCourt can cause NOTHING but headaches by keeping these lots. Development, jacked-up fees, etc. New ownership cannot come soon enough…
Comment by Doppel— January 20, 2012 #
I dont know if this is a non-issue or not because I havent seen it mentioned anywhere but does the sale include the Dodgers 50% interest in Camelback Ranch as well? I remember when the Dodgers were up for sale back in 2004 every article about the sale mentioned that the sale inlcuded Dodger Stadium, the surrounding land, the Dominican Academy and Vero Beach Dodgertown. This time around however the sale seems to focus on just the Dodgers and the Stadium/land. With McCourt having split the assets into different companies its hard to tell whats what anymore when it comes to the Dodgers.
Comment by Doug Q— January 20, 2012 #
Yes, Camelback Spring Training LLC and Camp Management LLC SRL are both wholly owned subsidiary of Los Angeles Dodgers Holding Company LLC (TeamCo Holding), the entity which entered into bankruptcy protection, so they are part of what’s being sold.
Comment by Greg— January 20, 2012 #
Thanks for the info Greg!!
Comment by Doug Q— January 20, 2012 #
Quit cutting in on my shtick
Comment by The LFP.com (@TheLFP_Blog)— January 22, 2012 #