WILL ANYONE PLAY BALL WITH MCCOURT? “If you make a deal and allow McCourt to keep the land and parking lots, you are out of your mind.”
So said Bob Daly, the very successful head of Warner Bros. (along with Terry Semel) for 20 years before he became the managing partner of the Dodgers in 2000, when he was talking with T.J. Simers of The Los Angeles Times about what a “bad guy” The Boston Parking Lot Attendant was, and as we all know, still is.
But if you believe the reports as to the value of the Dodgers, Boston Frankie McCourt will be laughing all the way to the bank after paying off the estimated $1.1 billion in debt and other liabilities of the bankrupt Dodgers and other affiliated entities, including $131 million payable to Princess Jamie … his spendaholic ex wife … taxes, and possible IRS penalties and fines for filing overly aggressive, if not fraudulent, tax returns.
However, as part of any sale of the Dodgers, The Boston Parking Lot Attendant wants to keep all of the land in Chavez Ravine. This includes the parking lots and the land underneath Dodger Stadium. And in return, Boston Frankie wants $15 to $20 million a year, which amount would escalate based on the cost of living or inflation.
He would also retain the development rights for Chavez Ravine, despite the fact that Big Hat, No Cattle Frank has not successfully developed any major projects in his lifetime.
Of course, this inability to develop projects is not surprising given Boston Frankie’s reputation for litigation and untrustworthiness. After all, what bank would lend him a thin dime after his recent performance with looting the Dodgers for almost $200 million that ended with the once proud Dodgers in bankruptcy court?
And who in their right mind would want to be a partner with a person that cannot be trusted?
But there are some significant issues if In-The-Tank Frank retains the land.
For openers, Major League Baseball (“MLB”) may object to any affiliation with Frank McCourt. And understandably so since any affiliation with the most despised man in Southern California will continue to tarnish the reputation of the team and adversely impact attendance, TV ratings, and revenue of the Dodgers and MLB.
And even if Boston Frankie is allowed to retain the land, MLB will view the lease as debt. Based on a cap rate of 5%, this would imply a debt in the range of $300 to $400 million.
This level of debt would leave very little room for any additional debt, thereby requiring the new owner to invest significantly more cash so that he/she will be in compliance with MLB’s limitation on debt.
[Note: The MLB debt limitations will also impact any advances from Fox Sports or Time Warner Cable, both of whom are very interested in the Dodgers’ media rights so they can develop their cable customer supported Regional Sports Network. MLB has made it very clear that it wants any money from television rights to be invested in the team rather than to finance the acquisition of the Dodgers.
This was evident when Commissioner Bud Selig put the kibosh on Boston Frankie’s efforts to use $173.5 million or 45% of the $385 million advance from Fox Sports to pay off his personal obligations.]
And then there is the issue of zoning. As it is, Chavez Ravine is classified as Open Space in the City’s General Plan, and as such, will require significant zoning changes to optimize the development of the almost 300 acres.
But while the usually pliant local Council Member and the City Council can be counted on accommodate development in return for political favors and campaign contributions, Boston Frankie may present a significant problem given his huge negatives, his unsavory reputation, his inability to work with a credible developer, his lack of capital, and his inability to finance the very expensive changes to the local streets, bridges, and infrastructure that are required to mitigate the impact on the local communities and the environment.
Boston Frankie’s desire to keep the land pursuant to a long term, escalating lease may be further complicated by the overall value of the team. While Bill Shaikin, the go to reporter for The Los Angeles on matters of the sale of the Bums, has indicated that the value of the team is in the range of at least a record $1.5 billion, there are significant issues impacting the value of the team.
While the Dodgers have signed MVP runner up Matt Kemp to a long term contract and lefty Clayton Kershaw to a two year, $19 million deal, the team still lacks the offensive firepower and pitching depth to be a real contender since our boy Frank has been unable to compete in the big leagues because he is broke.
So while the new owner will benefit from a significant increase in the television rights income in 2014, this incremental money will need to be invested in its skimpy $95 million payroll if the Dodgers are to be a contender.
To put this in the proper perspective, the Dodger payroll of $95 million is twelfth in the Majors and trails the Angels’ payroll now estimated to be $170 million with the addition of slugger Albert Pujols and OC lefty CJ Wilson.
As it is, the Dodgers are a financial mess. Revenues are off by about 20%, the team is losing money before interest payments and debt service, and attendance is off about 20% while no shows increased to 25% of paid attendance, resulting in only 2.2 million fans passing through the turnstiles.
And the flawed income statement is compounded by the need to make a significant investments (estimated to be north of $200 million) in Dodger Stadium, one of the oldest in baseball, the dangerous parking lots where intoxicated thugs run wild, and the emaciated Dodger farm system.
Boston Frankie is under the gun to complete the sale by April 30, the deadline set by MLB. And if a sale is not completed by that time, Princess Jamie then becomes part of the decision making process, an alternative that is probably not very appealing to money grubbing Boston Frankie.
While Dodger fans may not be very happy if Boston Frankie walks away with a huge ransom, we are well off to be rid of this low life owner who has abused the public trust.
But if he continues to own the land at Chavez Ravine, this will be a very costly decision for the new owner because dealing with The Boston Parking Lot Attendant will be time consuming, counterproductive, distracting, and most likely, litigious.
But even more so, many fans will continue to boycott the Dodgers because of their hatred of Boston Frankie. And this is not good for the Dodgers, MLB, or Southern California.
So here’s hoping that the new owner tells Boston Frankie to buzz off, get out of town, and never come back.
Now that will be a happy ending to a nightmare and hopefully the beginning of a new era of Dodger baseball where 4,000,000 fans once again grace Dodger Stadium.
[As an aside, Frank has been hauled into Massachusetts court by Bingham McCutchen, the law firm that is seeking a judgment on whether the firm blew the martial property agreement between Frank and Princess Jamie. Interestingly, Boston Frankie has not countersued, a surprising event given his propensity for litigation. But if he countersued, attorney client privilege goes down the drain and all gloves are off. And you can just imagine the dirt that would come out about Boston Frankie’s past dealings as well as those of McCourt Construction, a company that has been an integral part of the corrupt Massachusetts construction industry for the past four generations.]
(Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com. He can be reached at: [email protected]) –cw
Tags: Jack Humphreville, Dodgers, LA Dodgers, Frank McCourt, Boston Frankie, Parking Lot Attendant, Dodger fans, Chavez Ravine
CityWatch
Vol 10 Issue 15
Pub: Feb 21, 2012