Los Angeles Dodgers: 5 Reasons for Owner Frank McCourt to Walk Away Quietly
Wednesday's announcement by Major League Baseball that they are effectively taking control of the Los Angeles Dodgers and will assume day-to-day operations of the team sends one giant statement: an indictment of the mismanagement under the ownership of Frank McCourt.
Certainly, there have been some less than stellar owners of teams in the past, however none were taken over for complete mismanagement.
And we are not just talking about the mismanagement of money, which has become evident in the wake of the McCourts' pending divorce and recent facts regarding the overall McCourt debt, but also the mismanagement of Dodger Stadium and its security, which led to the brutal beating of San Francisco Giants fan Bryan Stow on Opening Day.
The Los Angeles Dodgers are not just one of the most revered franchises in baseball, but also one of the most revered in all of sports, period. Bud Selig is not about to let it be run into the ground by irresponsible ownership.
Here are five reasons why current owner Frank McCourt should choose not to fight and just simply sell the team and walk away quietly.
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1. The IRS Will Be Knocking on Frank McCourt’s Door Very Shortly
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Like Los Angeles Dodgers’ owner Frank McCourt doesn’t have enough problems to deal with. TMZ.com is reporting that the Internal Revenue Service has apparently launched an investigation after facts were revealed in the McCourt divorce proceedings.
The IRS wants to know why the McCourts took $145 million from the team itself and never reported taxes on the borrowed money.
The IRS is also interested in the McCourts' children receiving salaries from the team for jobs that they never had.
Other questionable accounting practices are being investigated by the IRS as well, including team losses that were carried forward from year to year.
The California Franchise Tax Board is also on board with its own investigation, sources have told TMZ.
2. The Frank McCourt-FOX Proposed Television Contract Smells Like a Rat
Back in February, MLB commissioner Bud Selig turned down a loan that FOX was entering into with Frank McCourt. The loan was for $200 million and was to be backed by collateral.
However, the collateral was to be the future television rights that FOX was to control. According to the Los Angeles Times, if the loan was not repaid by McCourt, the current television contract with FOX would have been extended by four years.
Selig and his office declined comment at the time regarding the reasons for his denial, however he did say that he would consider withholding approval of any broadcast contract that was proposed by McCourt.
Now, McCourt and FOX are trying to push a deal that would guarantee television broadcast rights to FOX for the next 20 years at a price of $3 billion, money that McCourt would surely use to ease his $430 million debt load and to settle his divorce.
Selig is not about to let any owner use money intended for a franchise to be used by an owner to bail out their personal debt.
Not only that, but FOX owned the Dodgers from 1998-2004, selling the team to McCourt, and FOX did not exactly endear themselves to Dodgers’ fans with their stewardship of the team.
Like I said, if it smells like a rat…
3. McCourt’s Continued Ownership of Team Will Drive Ticket Sales into Tank
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Attendance figures at Dodgers Stadium are clearly down. While they will toe the company line and say season ticket sales have been unaffected, the total fans attending say otherwise.
For a weekend series with the St. Louis Cardinals and Albert Pujols, the Dodgers drew a Friday night crowd of just over 36,000 fans, their smallest Friday night crowd in eight years. It was worse for the Saturday and Sunday games, attendance was down significantly: 31,614 for Saturday, and only 27,439 for a Sunday matinee game.
Those numbers will continue to drop with the current mess, and with declining attendance numbers, McCourt surely won’t be paying off his debts anytime soon.
4. Sentiment in Confrontation Between McCourt and Selig Decidedly One-Sided
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If Frank McCourt thinks for one second that he can take on Bud Selig and Major League Baseball and win, I have a bridge I can sell him. It will go nicely with his highly-leveraged Boston parking lots.
Bud Selig did not come to this decision lightly. The Dodgers were already being investigated by Major League Baseball; Selig inasmuch said that in his statement today.
“My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt's ownership.”
Sounds like an investigation has been ongoing to me, how about you?
On another note, McCourt could very well be in violation of the debt-service rule, implemented in baseball’s collective bargaining agreement.
In the CBA, the rule states that “clubs cannot borrow to pay existing debt but must raise revenue or reduce expenses to pay existing non-player-related debt.”
Isn’t that exactly what McCourt is trying to do?
5. McCourt’s Legacy Will Look a Lot Better If He Just Walks Away Without a Fight
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These days, everyone in the public eye worries about the legacy they leave behind. Obviously, now that MLB has assumed control of the Los Angeles Dodgers, Frank McCourt’s legacy is not one that will be looked upon fondly.
However, it would be a LOT worse if McCourt vows to fight, as his statement made on Wednesday seemed to indicate as such.
"Major League Baseball sets strict financial guidelines which all 30 teams must follow. The Dodgers are in compliance with these guidelines. On this basis, it is hard to understand the commissioner's decision today."
There seems to be a lot lately that Frank McCourt can’t understand. He certainly can’t understand how to run a storied major league franchise.