MLB Takes Control Of L.A. Dodgers
Frank McCourt, during a break from trial last fall
Updated below: Frank McCourt readies his weary legal armies for battle.
MLB Commissioner Bud Selig, who has sat in Sphinx-like silence as the Dodgers have unraveled over the last 18 months, today took control of the team.
As commissioner, Selig has broad authority to do what's in the "best interests of baseball." But seizing control of the Dodgers -- which, after all, is the property of Frank McCourt or Frank and Jamie McCourt -- is a major step for a guy who tends to be pathologically prudent.
So why now?
From the MLB statement:
I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball.
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Just yesterday, Steve Soboroff was brought in as vice chairman to help run the team. So that lasted for one day. During his introduction, Soboroff reassured everybody that -- despite appearances to the contrary -- the Dodgers are on firm fiscal footing. So maybe that triggered Selig's move.
Jamie McCourt says she supports the MLB takeover:
"As the 50% owner of the Los Angeles Dodgers, I welcome and support the Commissioner's actions to provide the necessary transparency, guidance and direction for the franchise and for Dodgers fans everywhere."
Early in the divorce case, Frank was given operational control of the team for the duration of litigation. So Jamie loses nothing here.
In fact, if this holds up, it means that Frank and Jamie are now on essentially equal footing. Both claim to be owners, but neither has any control of the team.
Update. Here's Frank McCourt's statement:
"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 action today."
Are Frank's lawyers ready for yet another lawsuit? AP says yes:
At the same time, McCourt was preparing to sue MLB, a baseball executive familiar with the situation told The Associated Press, speaking on condition of anonymity before McCourt issued his statement.
A short note on Frank McCourt's relationship to debt.
You and I try to avoid debt. For regular folks, the worst thing you can do, financially, is have a high credit card balance.
Frank McCourt is not like you and me. For him, debt is an opportunity. He seeks debt out. It's what allowed him to build an empire from essentially nothing. But his aggressive appetite for debt -- or "leverage" in bankspeak -- also means he's constantly riding the knife's edge of default. That tends to make those around him (like Jamie, his financial advisers, and now MLB) nervous. As Frank said at the divorce trial, "You need to have the stomach for it."
MLB no longer has the stomach for it.
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