Frank and Jamie McCourt announced a divorce settlement on Friday, but plenty of issues remain. Times staff writer Bill Shaikin considers some of the many unresolved questions and offers answers to what this latest development means for the Dodgers:
Question: Who will own the team?
Answer: We still don’t know.
Q: How then can the McCourts say they reached a settlement?
A: The agreement is a road map toward resolution, a term sheet rather than a final settlement. The first term says the settlement is “null and void” if Major League Baseball does not approve a proposed television contract between the Dodgers and Fox.
Q: Frank McCourt has been asking MLB to approve that contract for months. Why would the league do so now?
A: He says the league had asked for a divorce settlement, or at least some other assurance that his ex-wife would not challenge the Fox contract in court. With Jamie consenting to the deal and Los Angeles Superior Court Judge Scott Gordon ruling that the deal is in the best interest of the Dodgers, Frank McCourt says MLB has no reason to reject it.
Q: Is MLB bound by Gordon’s ruling?
Q: Is Fox pushing MLB to approve the deal?
A: Not too hard. Fox would like to secure the Dodgers’ long-term television rights, but the company has made clear to the league that this deal would be there for a new owner.
Q: Will MLB Commissioner Bud Selig approve the contract?
A: Highly unlikely. Here’s one reason: After court papers revealed the McCourts took more than $100 million out of Dodgers revenues for personal use, the league asked Frank McCourt to ensure that any upfront payments in a new television contract would be used for the team.
Under the terms announced Friday, Fox would pay $385 million upon approval of the contract, but up to $173.5 million would not be used for team operations and would not be available to a new owner inheriting the deal.
The agreement sets aside $80 million for debt repayment, $50 million for possible spousal support obligations, up to $23.5 million for Frank to repay personal funds he used on the Dodgers, $10 million for attorney fees and $5 million apiece for Frank and Jamie.
Q: When will MLB say whether the Fox deal has been approved?
A: Dennis Wasser, an attorney for Jamie McCourt, said he believed a decision could be announced Monday or Tuesday. The league had no comment.
Q: What happens if MLB rejects the deal?
A: Frank McCourt wouldn’t say on Friday, but the commissioner’s office expects him to sue.
Q: On what grounds?
A: McCourt says the Fox deal could be worth $3 billion and represents fair market value. He says the deal is structured in accordance with MLB guidelines and consistent with television contracts that have been approved, so a rejection would represent an unfair double standard.
That is the theme that would run through a lawsuit. McCourt has repeatedly said he is being treated differently from other owners for no valid reason. McCourt argues that the New York Mets are a half a billion dollars in debt and that Selig has not withheld funding from them, or from the seven other teams besides the Dodgers and Mets that are out of compliance with MLB debt service rules.
Q: How would MLB respond?
A: The league presumably would ask the court to throw out the lawsuit, noting that McCourt, like all incoming owners, signed an agreement granting the commissioner broad powers to act in what he determines to be the best interests of the game and promising not to sue the commissioner.
If the court were to allow McCourt to proceed with his suit, he could obtain confidential information, including financial data, from all clubs and reveal that information publicly. That could make some owners uncomfortable. However, it is unlikely that Selig would have installed a trustee to oversee the Dodgers if he were not confident that he could ultimately prevail in court and that owners would back him.
Q: If McCourt were to miss payroll, what happens?
A: Selig presumably would make the payments and ask McCourt to put the team up for sale. If McCourt were to decline, Selig could suspend him, seize the team, sell it and give him the proceeds.
Q: Why would Frank McCourt get the proceeds? Doesn’t Jamie McCourt say she owns half the team?
A: The parties agreed to settle that at a later date, Aug. 4, in a one-day trial in which Gordon will determine whether the team belongs solely to Frank or should be considered community property.
If Gordon rules that the Dodgers are community property, the agreement says the team “shall be sold” and the proceeds split 50-50.
If Gordon rules the Dodgers belong to Frank, Jamie would get $100 million, seven of the couple’s eight residential properties and indemnification from tax liability.
Q: If Selig rejects the Fox contract, what happens to the Aug. 4 hearing?
A: The agreement would be invalidated, so the hearing would be skipped unless the McCourts agree otherwise. The parties would return to divorce court and start over on a settlement, including the issue of who owns the team. Selig could order the Dodgers sold in the meantime, which would leave the court to decide whether Frank gets all the proceeds.
Q: Have the McCourts paid all their bills?
A: According to the settlement, mortgages on properties in Vail, Colo., and Cotuit, Mass., are in default. Jamie agreed to pay those bills.
Q: Bottom line: Frank McCourt has said all along his goal is to maintain sole ownership of the Dodgers. Can he do it?
A: He says yes, but the odds appear long. He would have to, one, get Selig to approve the Fox deal and, two, get Gordon to rule that the team is not community property. If he fails on either count, he would have to win a lawsuit against a commissioner he has agreed not to sue.