Here Come the Law Suits. What a Mess!

I’d love to view the events of the Bud Selig announcement this afternoon as a positive step forward for Dodger fans, but I fear that we are in for a long ride ahead.  I hope I’m wrong, but I don’t think so.  If you are thinking that this is the beginning of the end of the McCourt saga,  I say think again.  Frank McCourt will muster all the resources he can come up with and take Major League Baseball to court.  I hope that Bud Selig has his legal team well prepared because they are undoubtably going to be working real soon after McCourt files suit.

This man has gained his fortune by filing suit against his partners along with a series of dirty tricks to take possession of the parking lot property that he bought in Boston.  With Jamie, rather than have an amicable settlement in his divorce, he rolled up his sleeves and went to war, first by character assassination and then in the court room.  Common sense should have prevailed, and the dirty laundry about their personal expenses and infidelities wouldn’t have been aired in public.  What makes anyone think that McCourt will do the diplomatic thing and walk away from his Dodger ownership without a fight?  He never has in the past.

Jamie McCourt said it best prior to the start of divorce proceedings when she said,”I know that Frank is very litigious and that he employs a ‘scorched earth’ litigation phoilosophy.”  

http://www.laweekly.com/2010-08-05/news/dodger-dog/  (“Dodger Dog,” Gene Maddeous, August 5, 2010, LA Weekly.com)

This situation is a nightmare that will likely continue on and on.

Take a look at some of the documented history of Litigation introduced by Frank McCourt:

• He sues his original partners in 1980, with whom he bought the Boston waterfront property, Jim Craig and Austin Heath.  Through a series of complicated manuverings, McCourt surfaces as the lone owner of the property after Connecticut developer David Chase loans him $9 million to secure the deal.  The only thing his former partners end up with are 3 years of uncompensated work and a $369,000 tax bill on the property.

• He then sues the new partner, David Chase, (the person that helped him finance the property deal), in 1991.  Eventually Chase settles for pennies on the dollar and bitterly states, “he forgot what we did for him, without us he could not have had the property.”

• Next litigation McCourt took on the Department of Highways from the Commonwealth of Massachusetts.  The Commonwealth needed to borrow part of his property to complete the “Big Dig” construction highway tunnel project.  Though revenue from all of McCourts parking lots was $4 million per year, the Commonwealth had agreed to pay McCourt $30 million over the eight years of the project for just using 12 acres of his land.  McCourt wanted more and sued them for $140 million.  In the end he prevailed and settled for $62 million.  Not bad for a piece of land that would have earned him about a million dollars in parking revenues each year.  This settlement turned out to be the costliest eminent domain settlement in the history of the U.S.  In the end after the project was over, McCourt got his land back too.

• This situation is a nightmare that will likely continue on and on through years of litigation.  At present, McCourt is suing his former law firm that represented him when documents were drawn up and signed by both he and Jamie re: Dodger ownership issues.  He also is appealing his divorce decree decision.   I predict that MLB will be sued next putting Dodger ownership in limbo for a few more years.

On January 27th I sent the following letter to Bud Selig.  I think it is worth reading again today now with the events of this afternoon.  Thanks for listening Bud!

Dear Commissioner Selig,

Please Mr. Selig.  It’s time to do something.  It is time to invoke the “best interest of baseball” clause and protect the Los Angeles Dodgers and their fan base.  Force the McCourts to sell the Los Angeles Dodgers.  Your legal team needs to come forward and put an end to this ownership that never should have happened in the first place.  

This is a franchise on the verge of financial collapse. And how can that be when they draw 3.5 million fans a year?  It is simple.  There is complete mismanagement by the present ownership.  I will present to you over a dozen points that serve as evidence that the present owners of the Los Angeles Dodgers are breaking laws, mismanaging funds, completing underhanded back-room deals, are simply out of money and living on credit, and have questionable mental faculties intact.  It is time to oust the McCourts as stewards of this baseball institution and historic franchise.

1. The Dodger Dream Foundation and its mismanagement:  In 2007, the McCourt ownership paid a $400,000 salary to Howard Sunkin, Frank McCourt’s former liaison in public affairs out of $1.6 million collected for the Dodger Dream Foundation.  This 2007 disclosure, in a story broken by the New York Times, was completely misleading to the fans and merited disciplinary action by MLB when it occurred.  The New York Times reported that Sunkin’s salary was more in tune with someone heading a charitable foundation that collects in the neighborhood of $100 million annually.This egregious use of charitable contributions has drawn the scrutiny of the California Attorney General that is currently investigating this case.  And Sunkin continues on the payroll to this day.
2. Ownership has spent ridiculous amounts to live lavish lifestyles, all on the fan’s dollar.   The McCourts have used the team as a personal credit card.  Florists, hairdressers, tailors, real estate, security, private jets, lavish hotels, country club memberships.  They own several multi-million dollar estates.  But “own” is misleading.  They purchased the property on credit, using the Dodger franchise as collateral.  I understand that persons in ownership positions have a certain standard and image to uphold, but the McCourts have overdone it.  Some of these costs are just way over the top. 
3. Frank McCourt has paid his sons hundreds of thousands of dollars in salary annually when they were not even working, (one was attending grad school at Stanford), another running a surf shop on the beach.  Neither play a significant role with the club.
4. There have been massive firings and departures of good organizational people.  Ross Porter, Derrick Hall, Tommy Hawkins, Dan Evans, Jim Tracy, Paul DePodesta.  And those are just some of the firings we are aware of.  There are the low level, Dodger employees for decades that have been let go.  Tommy Hawkins, a well respected executive that is very careful with his choice of words said this about the dismissal of many loyal Dodger employees following his departure from the organization: “These are hard-hat people that make an organization go.  If you find out, please let me know why they were fired.  I can’t fathom why.”  (http://articles.latimes.com/2005/dec/01/sports/sp-simers1/2 )  
5. The spending of funds on Russian Faith Healer Vladimir Shpunt to send “positive energy vibes” to the team.  He is a man that knows nothing of baseball.  He reports that he sends “positive energy” from 3,000 miles away while watching a game on television.  This eccentric actually had an input and the McCourt’s ear with regard to firing Jim Tracy, firing Paul DePodesta, and player personnel moves.  He received a six figure salary.  The McCourts have been very tight-lipped about his hiring, knowing full well how ridiculous this looks.  My question is:  Who’s next?  Miss Cleo?http://articles.latimes.com/2010/jun/10/sports/la-sp-dodgers-psychic-20100610
6. The reckless and unbendable risk taking Frank McCourt took by refusing to settle in his divorce settlement.  This move tied the franchise’s hands financially by not allowing the Dodger team to upgrade in player personnel moves right at the stretch drive when the team was a mere 5 games back in the standings.  Worst of all, McCourt and his mouthpiece’s have refused to acknowledge this fiscal restraint, lying to the fan base as the only real contracts they add are backloaded and contain deferred payment provisions, (which is my next point).
7. The backloading of contracts and the numerous deferred payment contracts, that will hamstring the franchise for years to come, paying for players no longer with the team.  These are obvious moves from an owner that has no money and is living on borrowed time as he waits for what he hopes to be a massive new TV contract to fall in his lap when his current FOX TV deal expires in 2013.
8. Forcing newly signed players to contribute to the “Dodger Dream Foundation.”  This resulted in a Players Association grievance that forced MLB to take a stand.  You should know about this problem Mr. Selig, since you had to address the union on it and announce that such clauses in contracts are disallowed.  Thank Mr. McCourt for that.
9. Frank McCourts litigious history and personality.  The man has made his mark in the business world by taking people to court.  He sues and sues until he gets what he wants.  He has virtually no former business associates with whom he left on good terms.  His slash and burn mentality scorches everything in his path as he moves ahead to greener pastures. ( http://www.laweekly.com/2010-08-05/news/dodger-dog/ )
10. You created this mess by pushing for the approval of McCourt by other MLB owners.  You knew full well that prospective owners are not to have debt in excess of 40% when arranging the purchase of a new club.  Everyone knew how highly leveraged this purchase from Fox was.  Still the sale went through.  It is time for you to undo the mess you created.  Estimates today put McCourts debt upwards of $ 800-900 million. 
11. Reports have been made public that Frank McCourt has attempt to secure loans to pay his wife alimony.  He actually did get a loan from his brother for that purpose.  Worst of all, it is reported that financial institutions will not loan him money due to his precarious financial standing and credit.  Court documents in the divorce proceeding repeatedly emphasize Frank McCourt’s risky financial moves.
12. Frank McCourt’s back door dealings to attempt to build an NFL stadium on Dodger     Stadium Property without consulting City Officials or MLB.   These secretive meetings took place in 2005 shortly after NFL Commissioner Paul Tagliabue had publicly backed the L.A. Coliseum Commission in its effort to bring the NFL back to Los Angeles.  This completely caught the L.A. City Council off guard, as they had been investing significant resources in the Coliseum Commissions bid.  Personally I like the idea of an NFL team playing at Dodger Stadium property, but the problem with McCourt was that he attempted to do this in secret, behind everyone’s back.  When it was disclosed what he was doing, he lied about it and said it was “exploratory and a back-up plan.  Witnesses to his activities state otherwise.
13. The raising of average Dodger ticket prices by over 60% and  the raising of parking fees by 50%.  At the same time, player payroll remaining around the $100 million dollar mark.  I will admit that Dodger ticket prices were the best in baseball for decades and there was a need for an adjustment here, but payroll did not raise commensurately with those revenues, and that is unfair to the fan base.

If I took the time, I could provide you more facts that the McCourts need to be gone.  You need to do your part to save this fan base from the mismanagement of this ownership.  Recent reports indicate that this divorce settlement will enter another phase of legal battles that will not even hit the court room until 2012.  http://latimesblogs.latimes.com/dodgers/2011/01/the-dodger-divorce-and-the-philosophy-of-fear-i-know-im-scared.html   This really has to stop.  I am hopeful that you have a legal team in place that is ready for a battle.  I trust that MLB could oust McCourt and appoint a receiver to protect the fan base and MLB.  I'm sure that Major League Baseball has a legal team that could easily prove that these numerous moves made by McCourt has harmed the franchises value and MLB's reputation in general.

Please do your part and rid us of this destructive ownership.  Dodger fans would like to concentrate on baseball.

Sincerely,

Evan W. Bladh Sr.

http://opinionofkingmansperformance.blogspot.com