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Tuesday, September 27, 2011

L.A. Times: Frank McCourt goes on a fishing expedition

On deck in the Dodgers’ bankruptcy case: the Florida Marlins?

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.”

Game on.

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.

Tripon Posted: September 27, 2011 at 06:03 AM | 21 comment(s) Login to Bookmark
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Reader Comments and Retorts

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   1. fra paolo Posted: September 27, 2011 at 11:27 AM (#3938705)
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.

As much as I would love to see Mr Loria explaining how the Marlins invested their revenue sharing money in the club, this later quote from the article makes me think it won't happen.
   2. Shooty Survived the Shutdown of '14! Posted: September 27, 2011 at 11:31 AM (#3938708)
The lesson here is, "Steal, but don't steal too much!"
   3. ursus arctos Posted: September 27, 2011 at 12:05 PM (#3938725)
Also, don't steal from a "marquee franchise".
   4. Fancy Pants Handles lap changes with class Posted: September 27, 2011 at 12:17 PM (#3938738)
Also, don't steal from a "marquee franchise".

I think it's more: Don't have the extent of your theft opened to the public in court proceedings.
   5. Matt Clement of Alexandria Posted: September 27, 2011 at 12:24 PM (#3938741)
Don't have the extent of your theft opened to the public in court proceedings.
That's the thing. If it weren't for the divorce, Frank and Jamie would have had a decade or more to destroy the franchise, jabbing their blood funnels into every piece of the team that smelled like revenue.
   6. Mike Webber Posted: September 27, 2011 at 12:40 PM (#3938750)
The lesson here is, "Steal, but don't steal too much!"

Pigs get fat, Hogs get slaughtered.
   7. phredbird Posted: September 27, 2011 at 05:36 PM (#3939190)
If it weren't for the divorce, Frank and Jamie would have had a decade or more to destroy the franchise, jabbing their blood funnels into every piece of the team that smelled like revenue.


i agree with this. mccourt's big sin here is getting into a messy divorce and letting the curtain get pulled back.

and now he's come up with this strategy of trying to get the courts to get MLB to open up some of the books. i can't decide if he's crazy like a fox or just plain nuts.
   8. Shooty Survived the Shutdown of '14! Posted: September 27, 2011 at 05:58 PM (#3939209)
i can't decide if he's crazy like a fox or just plain nuts.

Desperate, I'd guess. The man's got nothing to lose at this point. What happened to the Chinese and their billion dollars?
   9. phredbird Posted: September 27, 2011 at 06:04 PM (#3939218)
What happened to the Chinese and their billion dollars?


lol.

that has disappeared. no idea how much of a legitimate feeler that was from the PRC.
   10. bigglou115 Posted: September 27, 2011 at 06:12 PM (#3939240)
At some level I have to think that what Bud is doing here is wrong. The fact is I don't even know if there's a compelling argument that McCourt is the most serious offender in MLB. On the other hand, they should all be stopped so that isn't really an argument for McCourt.

I wonder why the court didn't want to hear about the Rangers? Isn't standard business practices a consideration in contract law? At the very least shouldn't McCourt be allowed to prove that standard business practices have some relevance?

I'm starting to think there's a systemic failure in MLB. If I was comish I think I'd spend more time finding ways to make it more profitable to put a good product on the field than punish guys for making money. I mean, there's always going to be richer owners than others, so why is it a sin to try and be profitable (not saying the Dodgers here, but more like the Marlins). If your undercapitalized and want to make money on your team you've got the Loria/McCourt angle, or spend a ton on a huge risk.

Uh-oh, that sounds dangerously like a salary cap argument.
   11. fra paolo Posted: September 27, 2011 at 06:23 PM (#3939252)
If I was comish I think I'd spend more time finding ways to make it more profitable to put a good product on the field than punish guys for making money.

Is there prize money in baseball? I have an idea that European soccer leagues hand out a sum of money each season to teams that competed, with the winner of the league getting lots, and the last place team not so much.

Taking a different angle, there's a sort of reductio ad absurdam angle to the conventional wisdom that baseball is all about money. Well, it is, but money is made by selling entrance rights to a sporting contest. If it's not a sporting contest, there's something wrong with one's approach to one's "mission statement". ("We're not selling jeans here.")
   12. Shooty Survived the Shutdown of '14! Posted: September 27, 2011 at 06:29 PM (#3939265)
Is there prize money in baseball? I have an idea that European soccer leagues hand out a sum of money each season to teams that competed, with the winner of the league getting lots, and the last place team not so much.

They used to, but I think that's long past. They give bonuses for finishing position in English soccer, but it's not a huge amount of money.
   13. Fancy Pants Handles lap changes with class Posted: September 27, 2011 at 06:41 PM (#3939279)
They used to, but I think that's long past. They give bonuses for finishing position in English soccer, but it's not a huge amount of money.

Depends what you call not a huge amount of money. The winner of the PL takes about 20m quid (like $30-35m) these days I believe, with each subsequent finisher getting about 1m less than the previous. And the three tames that get relegated receive "parachute payments" on top of that.

Champions league is a bit more tricky, since it's based on both results as well as the ratings for the respective clubs country of origin. But last year both finalists (ManU and Barcelona) took home a bit over €50m (about $70m).
   14. Mike Emeigh Posted: September 27, 2011 at 06:43 PM (#3939281)
Is there prize money in baseball?


Yes, there is. Relative pocket change for a lot of these guys, but there are still postseason participation shares. Last year the Giants gave $317,631.29 for a full share and the Rangers gave $246,279.55. In addition, the other postseason teams and the four teams that finished second in their divisions without winning a wild card get smaller shares.

The total player pool is 60% of the gate receipts from the first three games of the Division Series and the first four games of the LCS and World Series. Each team's players decide how many full shares, how many partial shares, and how many cash awards to distribute from their share. It's variable, but usually the players on the postseason roster, anyone on the DL, and the managers and coaches get full shares. The Giants, a year ago, awarded 50 full shares, 9.89 partial shares, and two cash awards (which are defined as set dollar amounts, not as percentages of a full share).

-- MWE
   15. Swedish Chef Posted: September 27, 2011 at 06:45 PM (#3939287)
I have an idea that European soccer leagues hand out a sum of money each season to teams that competed, with the winner of the league getting lots, and the last place team not so much.

Most leagues with a collective TV-deal doles out some money based on position.
   16. akrasian Posted: September 27, 2011 at 07:10 PM (#3939314)
Mike - I believe the question was about for the teams, not the players. So do owners get extra money for their team doing well?

AFAICT, the answer is no, except of course for increased revenue from attendance. Helyar's Lords of the Realm had a comment about Walter O'Malley, how he would rather lose the World Series in 7 than win in 4, since he made more money that way.
   17. You Know Nothing JT Snow (YR) Posted: September 27, 2011 at 08:08 PM (#3939390)
If I was comish I think I'd spend more time finding ways to make it more profitable to put a good product on the field than punish guys for making money.


And that's why you'll never be commissioner. Heck, with dangerously radical ideas like that you'd probably be tasered if you got within 100 yards of Bolshevik Bud or one of his poormouth plutocrat cronies.
   18. phredbird Posted: September 27, 2011 at 08:32 PM (#3939416)
At some level I have to think that what Bud is doing here is wrong. The fact is I don't even know if there's a compelling argument that McCourt is the most serious offender in MLB. On the other hand, they should all be stopped so that isn't really an argument for McCourt.


IANAL, but i will assume that MLB will take a position that they don't have to justify how they apply their bylaws because the owners agree beforehand that the commish is the one who calls the shots. If bud testifies that he was satisfied that jeff loria wasn't in violation of MLB's rules while mccourt is, he's taking the chance that the court will ask him to provide proof. but i wonder if a judge will be leery of doing that because of the precedent it will set. if a club -- which is what MLB is, really -- doesn't want you in, they can kick you out and you can't use 'other members are as bad as me' as a complaint. can you?
   19. akrasian Posted: September 27, 2011 at 09:01 PM (#3939451)
Has Loria been unable to meet payroll? That alone would seem to be a huge and relevant distinction. Taking profits but still meeting your bills might be acceptable, while taking profits and then trying to pay your current bills by borrowing against what should be future earnings is something different.
   20. You Know Nothing JT Snow (YR) Posted: September 27, 2011 at 09:03 PM (#3939452)
Has Loria been unable to meet payroll?


No, but does he ever thank Young Masters Steinbrenner for their largess? If the Dodgers could only get on that free money teat gravy train like Loria did they'd be fine!
   21. Mattbert Posted: September 28, 2011 at 01:56 PM (#3940788)
Depends what you call not a huge amount of money. The winner of the PL takes about 20m quid (like $30-35m) these days I believe, with each subsequent finisher getting about 1m less than the previous. And the three tames that get relegated receive "parachute payments" on top of that.

Remember also that 50% of television broadcast revenue for the Premier League gets allocated based on two criteria: "merit payments" (table position) and "facility fees" (how many times the club's matches are televised domestically over the course of the season). The latter is a pretty good proxy for table position, although it probably more closely tracks something like a three-season rolling average of table position rather than only the season for which the payments are being made. In this way, it's as much a representation of reputation and cachet as it is explicitly related to performance.

Every club in the league took home almost $50m to start with. That's the half of the broadcast revenue that's distributed equally among all 20 clubs. Now compare the combined revenue from facility fees and merit payments for Manchester United, who won the league and whose matches were televised domestically most often, and the three clubs that were relegated.

Manchester United ~$46m
---
Birmingham City ~$13m
Blackpool ~$11.5m
West Ham United ~13.5m

As you can see, it's good to be good. And popular. Merit based and nominally merit-related tv money was worth well over $30m for the league's top team last season. And this gap will expand as broadcast revenues continue to grow.

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