Dodgers Could Soon Reach Financial “Tipping Point”

7:41pm: Bill Shaikin of The Los Angeles Times reports that McCourt took a $30MM loan from FOX this week, which will cover the Dodgers' expenses and payroll obligations into next month. Shaikin clarifies (on Twitter) that MLB's approval is not needed for personal loans, which this was.

1:07pm: Although the Dodgers increased payroll from $83MM last season to over $95MM this year, the team still has serious financial concerns as the McCourts continue with their divorce. ESPN's Buster Olney (Insider req'd) hears from a high-ranking executive that the team could soon reach its financial "tipping point," since payroll obligations must be met during the second and fourth weeks of the season.

As if the divorce wasn't enough, owner Frank McCourt was recently sued by the Boston law firm Bingham McCutchen. McCourt had sent representatives to meet with the commissioner's office about a proposed plan that includes a TV deal with FOX (that would advance him $200MM) and would allow him to preserve control of the team, but they're still waiting on a decision. Fellow owners aren't pleased with the situation, reportedly.

This past week was the second full week of the 2011 baseball season.


85 Responses to Dodgers Could Soon Reach Financial “Tipping Point” Leave a Reply

  1. GoDoyers 4 years ago

    The Dodgers are owned by a Red Sox Fan, have a Giants Lover for a GM, and a skipper who is showing no signs of life coming from the dugout. Just sell the team already, McCourt.

    • vtadave 4 years ago

      “Giants lover”? LOL…that’s a stretch there bro. I’m a Microsoft-lover because I work for them, but if Apple hired me, I’d have them at the top of my list. All about who cuts the checks.

  2. JacksTigers 4 years ago

    “This past week was the second full week of the 2011 baseball season.”

    Thank you?

    • CaseyBlakeDeWitt 4 years ago

      Meaning McCourt’s got to start paying people.

      “since payroll obligations must be met during the second and fourth weeks of the season.”

  3. Given how McCourt had to leverage to the hilt just to buy the team this really shouldn’t be coming as a surprise. He’s playing ball in the majors but he’s only got minor league talent. If your business plan is to consistently rob Peter to pay Paul you are going to end up in this situation sooner or later. It’s too bad, the Dodgers are one of MLB’s crown jewel franchises, they should be operated by someone who’s good at what he does.

    • $1961279 4 years ago

      yup , my money is that because of McCourt’s minor league stick that Ms. McCourtCo went searching for a major league stick. Which leads us to where the team is today. Very sad little man it appears that McCourt is in reality.

  4. The best solution, albeit a complicated one:
    * Contract the Rays and Diamondbacks.
    * Move the Athletics to Arizona.
    * Shift the Marlins to the American League (thus leaving 14 teams in each league).
    * Force the McCourts and Wilpons to sell, with the teams going to the current Tampa Bay and Oakland owners.

    • Wow, what a stupid suggestion. Arizona isn’t hurting. Tampa isn’t hurting (although they need a new stadium and should probably move), and there is a line of potential owners wanting to buy teams.

      • Guest 4 years ago

        The Rays should be contracted and immediately. When you don’t draw fans during the playoffs and with the best record in AL for 2010, you don’t deserve a MLB team. Colorado should be moved to the AL West with Cleveland moving to the AL East and Texas, who really is inconvenienced by being in the AL West, moving to the AL Central. The Dodgers and Mets will recover under better ownership.

        • JacksTigers 4 years ago

          You really hate Cleveland, don’t you?

          • Guest 4 years ago

            No, not really. I just think Texas should be in the AL Central if TB was contracted, leaving the furthest team in the AL Central east, the Indians, to be moved to the AL East. It’s not hate, just logical sense. Did MLB hate the Braves win they moved them from the NL West to the NL East or the Brewers from the AL to the NL???

          • Encarnacion's Parrot 4 years ago

            I don’t mind the system with how it is, but if the MLB wants to make the league more geographically sound, the AL should be on the east half of the continent, and vice versa. With the unbalanced scheduling, so many teams get railed by consistantly changing time zones. I can’t speak for any other teams, but I know the Jays get murdered yearly from craptacular scheduling.

          • Guest 4 years ago

            Don’t know about the AL eastern US idea. But your geographically sound idea works for me. The Rangers really shouldn’t be in the AL West. And the Jays do get penalized being that there the only Canadian franchise.

          • JacksTigers 4 years ago

            I was thinking more of the Indians would have the worst record every year in that division.

          • Guest 4 years ago

            Really, I don’t. Toronto is always up and down. Let’s face it until the Rays figured out how to beat the Red Sox and Yanks, those two teams pretty much dominated the AL East for the better part of a decade.

        • Contraction is not going to happen so put down the pipe. First of all, the players union would never go for elimination of two teams. Second think of all the minor league clubs that would lose affiliation. Contraction is not a easy as you think. For every person that pipes up with the idea of contraction, I think one more wasted brain.

          • Guest 4 years ago

            So I suppose you think David Stern has a wasted brain too. NBA considering it. Also, a few years ago when the Marlins and Twins were facing the possibility of contraction–what if that would have happened, based on your comments, sounds to me like you’d stop following MLB.

          • RahZid 4 years ago

            You realize that there’s a huge difference between the D-League system the NBA uses as its minor league and the MLB system right?

          • Guest 4 years ago

            Yes. Still doesn’t change my opinion about contracting the Rays though.

          • Something will give, these teams will get new ballparks and still won’t have any fans, will go broke and something will give. Of course they will use it as a last resort, it’s all about overreaching and raking in as much cash as you can.

          • Guest 4 years ago

            Exactly. That’s what gave with the Expos.

        • Lots of empty seats in ATL last year.. should they be contracted too?

          • Guest 4 years ago

            Lots of empty seats everywhere in baseball. What’s your point??? PHI, NY, BOS, CHI, and TEX didn’t have lots of empty seats.

          • Moved, Thrashers should be contracted or moved as well, they like NBA and NFL in the ATL.

        • Tampa sold out every playoff game.

          • Guest 4 years ago

            In advance or the day of the game. How was there regular season attendance, better than BOS or the Yanks I suppose, considering their record was better than both???

          • JacksTigers 4 years ago

            The team gets paid wheter you use the ticket you bought or not. Judge by paid attendance, not be how many seats you see on ESPN.

          • Guest 4 years ago

            During the season or during the playoffs???

        • jb226 4 years ago

          When you don’t draw fans and still have the best record in the AL, you really believe contraction is the proper solution? You’re going to destroy what is obviously a very strong franchise because the fans don’t turn out?

          If you’re going to insist on meddling, the Rays are probably the prime candidate in MLB to be moved elsewhere. Can you imagine that franchise with enough fan interest to sustain even a modest $75-85 million payroll?

          • Guest 4 years ago

            Yes, I do. Southern cities, other than Texas (and because they recently appeared in the WS and have a team on the rise) don’t support sports in large numbers other than football. So, you can’t move the Rays because there isn’t a market big enough (other than southern US cities) to sustain the franchise. And let’s face it the stadium they play in stinks!

          • Beauford 4 years ago

            Joe Tetreault – Managing Editor of the fine blog “The Biz of Baseball” – follows the baseball expansion/relocation concept closely and here are his Top Ten Cities from late last year:

            1-San Jose
            2-Charlotte
            3-New York City
            4-Portland
            5-Indianapolis
            6-San Antonio
            7-Montreal
            8-Nashville
            9-Sacramento
            10-Las Vegas

            If the Rays were to relocate, Charlotte makes a lot of sense. It’s the#27 U.S. TV market and if you add in nearby cities (Raleigh-Durham, Winston-Salem, etc.) they would be in the top 5.

            San Antonio (who really wanted the Marlins a few years ago) could also support a team with the 28th largest population in the U.S.

            NYC seems rather high since both the Yankees and the Mets would likely be against it. And Vegas is always mentioned but always has that one problem – it’s Vegas.

            Tampa would love to get out of its St. Petersburg’s lease and move either to the Tampa area or outside Florida. Viable options do exist outside of Florida, but getting out of that lease (which I believe has another 20+ years to go) is going to require some ingenuity (i.e., big bucks).

          • Guest 4 years ago

            I agree with Las Vegas or maybe Charlotte. Otherwise, I think most of those places couldn’t support an MLB team just like Tampa can’t. Sorry :(

          • Beauford 4 years ago

            If you’ve ever read ‘The Biz of Baseball”, then you would know that its writers are first-rate.

            And if one of its Managing Editors (who understands the topic of baseball expansion/relocation cities much better than the rest us as he does this type of research for a living) generates a Top Ten list of possible cities, I will accept all 10 cities as a possibility, if not probability.

            But I would never summarily dismiss the vast majority of cities on his list with your simplistic one-sentence rebuttal “I think most of those places couldn’t support an MLB team just like Tampa can’t.”

          • Guest 4 years ago

            But here’s the thing though–baseball doesn’t draw well in the Southern US. Football does. Look at the Astros, the Braves, the Marlins since their inception, and Tampa. A mixture of very good and very bad teams…all with poor attendance. You can’t say I summarily dismissed every city. Las Vegas may work for Tampa’s relocation, if I came to that. I think they could support an MLB team. As for Southern US cities, Montreal and another team in NYC, I think others would wholeheartedly support me in saying it just wouldn’t work.

        • RahZid 4 years ago

          “The Rays should be contracted and immediately. When you don’t draw fans during the playoffs and with the best record in AL for 2010, you don’t deserve a MLB team.”

          So why not just relocate the team that’s proven to be a successful baseball organization?

          • Guest 4 years ago

            To what city???

          • Beauford 4 years ago

            Charlotte

          • Guest 4 years ago

            No, Carolina’s having problems supporting their NHL and NBA teams. No….just…no.

          • RahZid 4 years ago

            Complements of Beauford,

            “Joe Tetreault – Managing Editor of the fine blog “The Biz of Baseball” – follows the baseball expansion/relocation concept closely and here are his Top Ten Cities from late last year:

            1-San Jose
            2-Charlotte
            3-New York City
            4-Portland
            5-Indianapolis
            6-San Antonio
            7-Montreal
            8-Nashville
            9-Sacramento
            10-Las Vegas

            If the Rays were to relocate, Charlotte makes a lot of sense. It’s the#27 U.S. TV market and if you add in nearby cities (Raleigh-Durham, Winston-Salem, etc.) they would be in the top 5.

            San Antonio (who really wanted the Marlins a few years ago) could also support a team with the 28th largest population in the U.S.”

            Maybe you should read the other responses to your thoughts?

          • JacksTigers 4 years ago

            Why did you quote the entire comment?

          • RahZid 4 years ago

            I left out part of it, but his question was already answered before he asked it.

    • That certainly is a complicated plan, whether it could ever be done or not is another thing. I think one sticking point is whether or not the Diamondbacks should be contracted. They may not be good right now but they’ve had some success and descent attendance, consistently over 2 million isn’t all bad. Besides that, could the owners of the D’backs and Rays even afford to buy the Dodgers or Mets? Plus, Jeffrey Loria would raise heck over having to move to the AL East and we know he’s buds with Bud. That plan could fix some issues but there is too much noise in the details for it to work.

    • Ferrariman 4 years ago

      Arizona!? That place is a hot bed for baseball. They just need a good team. Changing locations isn’t going to change the players.

    • JacksTigers 4 years ago

      Why would you contract Arizona just to move another team to Arizona. How about we cut out the middle man and do nothing.

    • icedrake523 4 years ago

      Why would you contract the D’backs only to have the A’s move to Arizona? Just contract the Athletics.

    • Having the same number of teams in each league would ruin scheduling, unless you want interleague games to go on all season. Wouldn’t it?

    • $1961279 4 years ago

      why? the Dodgers will sell in like 3-minutes if put up for sale. Same for the Mets the DRays and the DoucheBacks (sorry gotta be a Dodger guy even if I wanna see McCourt and Fox driven completely out of the game as both have acted in concert to drag the Dodgers into this mess).

  5. optionn 4 years ago

    Well, we all know McCourt will file a lawsuit against Bingham-McCuthen. Without that legal screwup, with community property documents, Frank McCourt wouldn’t have to fight Jamie McCourt. McCourt might be able to garner a huge amount of money in this lawsuit, up to half the value of the Dodgers…. 300 million?

  6. BlueSkyLA
    BlueSkyLA 4 years ago

    The other owners aren’t pleased with situation? So who is, besides the lawyers? And last I checked, the Commissioner was an employee of the owners. Maybe the owners should be even more displeased with him.

  7. It’s amazing how much I hate McCourt. Wow.

  8. dodgers33dodgers 4 years ago

    let mark cuban buy the team!!!!!!

  9. How should the team be expected to win when the front office can’t even hold itself together?

  10. Shu13 4 years ago

    Simplest solution…..McCourts SELL THE TEAM….it’s obvious that Frank and Jaime over extended themselves by buying the team then w/ poor judgement bought up a crap load of over priced property b/c they were “swimming” in $$$ and when the bubble burst they are now upside down on their “investments”…I applaud the MLB for NOT giving a “bail out” loan to the McCourts b/c the money wasn’t going to go back into the team(players or stadium) but rather the divorce and not to mention FURTHER in debt…

    For Sale:
    Los Angels Dodgers and Chavez Ravine…storied franchise and a stadium that needs a facelift….let the McCourts keep the parking lot since thats how he made his $$$…lol

    • BlueSkyLA
      BlueSkyLA 4 years ago

      The team is going to have to be sold, in name or in fact. Neither of the McCourts will be able to buy out the other, which means best case scenario (for them, not us) is one of them finds big bucks partners. And yet, even that probably can’t happen. The team is now community property in a divorce, which means that the value of the asset has to be established before it is split. Most divorced couples can’t even agree on the value of a house, let alone a sports franchise. They could fight over that one issue for years more. Won’t that be nice? Earth to Bud Selig…

  11. Gumby65 4 years ago

    If Mohamar Qaddafi stays in power longer than Frank McCourt, I’m going to be really pissed.
    Actually, it works both ways… I guess technically I am doomed to be pissed.

    • The way things are going, we might have to revolt

    • BlueSkyLA
      BlueSkyLA 4 years ago

      What if Qaddafi and McCourt change places? Would anybody notice?

      • Gumby65 4 years ago

        That’d be bad, if only because of the nepotism factor, you know, Qaddafi likes to put his kids in positions….oh crud wait, erase that thought…
        Hey, maybe he can take care of that parking lot problem…
        Nah, strike that one too…

  12. TapDancingTeddy 4 years ago

    The Yanks spent $26MM on Kei Igawa and The Red Sox $50MM on Daisuke Matsuzaka. I wonder how much selling Clayton Kershaw would bring to The Dodgers?

    Not that I think the commissioner would approve a player sale. It’s much more likely that MLB takes over the team and re-sells it ASAP.

    • Gumby65 4 years ago

      Charlie Finley tried that back in the Seventies. Bowie Kuhn didn’t let him “enter Escrow”.

      • TapDancingTeddy 4 years ago

        I don’t know about the escrow thing, but I do know that Bowie Kuhn stopped Finley’s player sales by invoking the commissioner’s right to stop any transaction that was not “in the best interests of baseball.”

        That was a different era, though. Finley even stopped one of Kuhn’s trades the next year: Vida Blue to the Reds. Now teams trade veteran stars for prospects all the time.

        BTW, the proposed 1976 sales involved the same big spenders who bought Igawa and Dice-K. Joe Rudi and Rollie Fingers were to go to the Red Sox and Vida Blue to the Yankees.

    • Ferrariman 4 years ago

      the red sox paid neary 100mil for Dice-k. You also have to give his former japanese team compensation, same with Igawa.

      • TapDancingTeddy 4 years ago

        I was mentioning posting fees only as that money translates to sale price. I don’t see what else applies to a franchise trying to raise money.

  13. vtadave 4 years ago

    I’ve been a Dodger fan for over 30 years and know some folks in the front office.

    Folks – it’s as bad, if not worse, than the LA Times is reporting. The “offical” MLB attendance figures say that folks are still coming to the games, but 4 of those games were against the Giants and I’m told that the numbers reported versus butts in seats are even more varied than normal.

    McCourt is rarely at the games and reportedly rarely in the office because everyone hates him. Wonder why…

    The Dodgers have some good guys – Vinny, Lopes, Wallach, Donnie, etc. and while those guys are far too classy (and smart) to say anything negative, the prevailing mood around the team is that McCourt will be forced to see and EVERYONE (we’re talking down to the secretaries and janitors…. oh wait, McCourt cut the janitorial staff too) can’t wait for that to happen.

    • Beauford 4 years ago

      It seems like McCourt needs MLB’s help in at least one of two ways:

      1-MLB’s approval of an advance on the Dodger’s future TV contract and/or
      2-MLB providing financing to McCourt.

      MLB could tell McCourt “No” to the advance TV money. Then they agree to lend the Dodgers the money under the condition that he agrees to sell the team. Otherwise, McCourt has to find another lending source (good luck with that in the middle of his divorce) or sell part of the team, but MLB could refuse the sale (that anti-trust exemption really can come in handy).

      Unless he has adequate personal assets to liquidate in the midst of his divorce to finance the team or other funding sources after the divorce (assuming he is still the owner), I suspect McCourt will have to sell the team and possibly go through a personal bankruptcy to reorganize his personal finances afterwards.

      And if McCourt and his wife end up as joint owners, is there any other solution other than a sale?

      You’ve followed this situation closer than I have, but it seems MLB (just like Dodger fans) wants this meatball out of town yesterday…and they have no vested interest in helping him out.

      • vtadave 4 years ago

        I think you understand the situation very well, and no, McCourt has less than sufficient personal assets.

      • BlueSkyLA
        BlueSkyLA 4 years ago

        I see a couple of problems with this. First, the Commissioner has already denied McCourt TV advance money. Second, which McCourt are we talking about? The two of them own the team. They became joint owners when the prenup was invalidated, though in what shares a judge has yet to decide. Neither one can buy the other out until it has been determined how much of the team they each own and what the team is worth. I don’t see either of them having to go through bankruptcy since the franchise is worth far more today than it was when they bought it. If the Commissioner won’t force the sale then a judge should, just like they often do with community property in other divorce cases. Then they can argue over who gets how much of the proceeds until the earth’s crust cools, and we don’t care so long as the team belongs to someone else who can actually run it.

        • Beauford 4 years ago

          I recall the prenup invalidation, but I thought Frank’s attorneys were going to contest it so I left it open-ended. I didn’t realize it was final…or maybe it wasn’t ever contested.

          I heard Frank wanted the TV advance, but I missed MLB’s nixing it.

          Regarding the bankruptcy comment, that’s just the former banker in me. I assumed Frank would eventually want to avoid paying as much of his personal debt as possible and bankruptcy is the legal process to discharge debt if permissible. But I’m sure Frank is a very moral person who would never shun paying his debts…and in a few hours I will be looking westward to watch the sun rise.

          • BlueSkyLA
            BlueSkyLA 4 years ago

            Last I heard, Frank was claiming that his lawyers have a legal theory that gives him complete control over the Dodgers. I have a feeling Jamie’s lawyers won’t agree with this theory and will fight it every step of the way. Any and all of this requires adjudication, which could easily take years, during which the team’s ownership is in limbo. At this point, all we know is that the Dodgers are community property — which does NOT mean that the McCourts own the team 50/50. As I understand community property law in California, the shares will be decided based who put in how much money when.

            I don’t know a heck of a lot about bankruptcy, but I thought it was for people whose liabilities exceed their assets. Recent estimates I’ve heard value the Dodgers between $700 and $800m, a lot more than the McCourts paid for the team. They do not appear to be insolvent. They’re more like farmers who are “cash poor” but “land rich.” They need to sell the land to retire their debts. Maybe a bankruptcy court can shield them from that, but I wonder.

        • I think you missed the crux of the article, the Dodgers don’t have enough cash to meet payroll for the season. McCourt took a “personal loan” from Fox to cover a month of expenses. Obviously the team can’t be sold in the next month so what happens then? Do the players play without getting paid?

          • BlueSkyLA
            BlueSkyLA 4 years ago

            No, I don’t think I missed anything. I’m not sure what point you are trying to make. No question the McCourts have cash flow problems, but that does not make them bankrupt. The franchise is worth far more than they paid for it, especially now with the media rights coming up for renewal. They are trying to borrow against those assets but so far MLB is vetoing the loans. Probably that’s why the Fox loan is “personal” — because the Commissioner won’t approve loans secured against the team. I see the Commissioner trying to force the sale by remote control. I don’t think it’s going to work, because as you say, it can’t be done soon enough to deal with the cash flow issues. MLB is probably going to have to come up with bridge loans eventually, like they did with the Mets. They are going to have to get their hands dirty by making them conditional on selling the team, and risk a lawsuit. It’s the only way out of this mess, as I see it.

  14. sherrilltradedooverexperience 4 years ago

    i don’t mind the mccourt’s being financial carcasses because they ran the team like a personal atm machine or like the second home they just couldn’t help but keep taking home improvement loans out on to enhance their lifestyle, but I do worry about the Fox that is slowly circling those carcasses, I worry a lot.

    • BlueSkyLA
      BlueSkyLA 4 years ago

      You think Fox wants the team back? I doubt that. IIRC, they took a bath on it last time.

  15. markjsunz 4 years ago

    McCourt came riding into Los Angeles like a white Knight. He was going to save the Dodgers, develop the parking lot into an upscale mall in a terrible neighborhood, and was embracing Los Angeles with his heart and soul. What he really did was ride the youth movement that the prior regime developed and was able to go into the post season for a few years. Russell Martin is gone, I am sure Kemp and Loney and the others will be gone when it comes time for a big payday.The Dodgers signed two catchers who have trouble staying on a major league roster and they can not hit there weight. McCourt triples ticket prices, shoots parking up to $20.00. The food prices shot up and the consessions are Putrid. There is nothing more disgusting then a Dodger dog. Not sure what kind of an animal they make it out of but you have to go to the machine with the onions and relish and just keep turning the crank til you drown out the taste. Wash it down with your flat $8.00 soda or your piss warm beer.I think you get the point. There is no way McCourt leaves as long as he can squeeze money out of the team. I have been a fan since 1962, my father, and grandfather were also fans going back to the early 1900`s. The O`Malley family were great owners they had good pricing, the dodgers used to be known for there farm systems and the Dodgers would win a championship every once in a while. From fox letting Piazza go to this Bozo the Dodgers have had poor ownership. A citie like Los Angeles should have a team to go hand and hand with it`s attendence. I can understand why a team like Tampa Bay does what it does, but we are talking about so. California. Go back to Boston you lowlife new england sewer rat.

  16. tomymogo 4 years ago

    McCourt, start trading people. Matt Kemp to atlanta to create payroll relief and get good pitching prospects. And trade Lilly, and Garland

    • East Coast Bias 4 years ago

      Easy there, this isn’t fantasy baseball. Kemp makes less than 7m.

  17. Beauford 4 years ago

    No. There are certain blogs that I consider top shelf and I enjoy passing their names along with their writers.

    FWIW, in you like prospect analysis try “Baseball Beginnings” by John Klima. It puts the “prospect experts” at Baseball America and Baseball Prospectus to shame.

  18. JacksTigers 4 years ago

    I just might check that out.

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