05 Jul 2011
- Written by Jack Humphreville
On Monday, June 27, Frank pushed the Dodgers and other related entities into bankruptcy to avoid having the team being seized by Major League Baseball because of the club’s inability to fund its upcoming payroll as well as a hefty deferred payment to the now departed Manny Ramirez.
While spoiled little Frankie whines that Major League Baseball is responsible for the Dodgers financial woes because the Commissioner did not approve his Hail Mary media rights deal with Fox Sports, the truth is that Frank is guilty of gross financial mismanagement.
The Dodgers are suffocating on a mound of debt that may be approaching $600 million, an amount that vastly exceeds Frank’s 2004 debt financed purchase price of $421 million. Furthermore, it is likely that this debt burden will grow because of interest payments, monstrous legal fees associated with the bankruptcy, and the Dodgers’ unprofitable operations.
After 43 home games, stated attendance is off 20% from last year. But stadium related revenues (tickets, parking, concessions, and souvenirs) are down even more because the higher level of no shows, the heavy discounting of ticket prices, and the significant discounts offered to sponsors for prepayment.
Consequently, the Dodgers will most likely lose money this year before paying a dime of interest.
When the Dodgers filed for bankruptcy, the team arranged for Debtor in Possession financing of $150 million with Highbridge Capital Management to fund payroll, every day operating expenses, and the costs associated with the bankruptcy filing.
But Highbridge is not an ordinary or traditional lender, but rather a fast money New York City hedge fund that specializes in “alternative” investments. A lender of last resort, one that will lend to those of dubious character and questionable finances, Highbridge will demand a very high rate of return, confirming that Frank is not “bankable.”
True Blue Fans are praying that Judge Scott Gordon of Superior Court will order the sale of the Dodgers and related assets. They also on their knees begging Judge Kevin Gross of the United States Bankruptcy Court for the District of Delaware to dismiss the bankruptcy filing or allow Major League Baseball to seize the Dodgers.
But Dodger fans can do more than pray. They can hit the dirtball right where it really hurts, in the wallet, by boycotting the Dodgers and their sponsors and advertisers.
By turning Dodger Stadium into “Frank McCourt’s Ghost Town,” fans will deny the high living Frank the revenue and profits associated with ticket sales, parking, concessions, and souvenirs. These same fans should also ridicule their friends and acquaintances who dare to pass through the turnstiles of Dodger Stadium.
Fans and all Angelenos should also boycott sponsors and advertisers who pay for in stadium, radio, and TV advertising, forcing them to reconsider their financial support of the image destroying Frank McCourt.
Recent television advertisers include United Airlines, Southwest Airlines, Jack in the Box, Coke, Del Taco, 76, T-Mobile, Dodge Ram trucks, Universal Studios, Citibank, AT & T, Time Warner Cable, San Manuel Indian Casino, Toyota, Metro PCS, and Bank of America.
We should also encourage corporate sponsors and advertisers to void their contracts, arguing that the once iconic image of the Dodgers has been materially damaged by the bankruptcy, the looting of the franchise by Frank and Princess Jamie, and the violence at Dodger Stadium.
Just imagine the positive reaction of Angelenos if a major sponsor such as United Airlines announced that it was no longer willing to have its name associated with the escapades of The Boston Parking Lot Attendant and Princess Jamie.
By boycotting Frank and the Dodgers, fans will deny Frank the necessary cash to make his interest and principal payments on his loans, thereby allowing the banks to foreclose. And the lower cash flows will also trash the value of the Dodgers, causing even more distress with the banks.
This lack of cash and the lower valuation of the Dodgers will also cause Princess Jamie and her lawyers to make a beeline to Superior Court, calling for the orderly sale of Dodgers and the related assets. After all, she needs to protect her nest egg and sumptuous standard of living. As it stands, there is a high likelihood that she will lose it all because of Frank’s high stakes gamble.
While boycotting the Dodgers will no doubt be painful, the odds of the Dodgers making the playoffs are beyond remote. As of Sunday night, the Dodgers are in last place in the National League West, 11 games behind the Giants in the loss column, and 12 games behind Atlanta in the Wild Card Race.
So wish Matt Kemp an MVP season, but write off the season and pray to baseball gods that courts, the lenders, and Major League Baseball will force the orderly sale of the Dodgers.
Tags: Dodgers, Frank McCourt, boycott, Ghost Town, Major League Baseball, bankruptcy, payroll
Vol 9 Issue 53
Pub: July 5, 2011