Frank McCourt agrees to sell Dodgers
Frank McCourt has agreed to sell the Dodgers, surrendering the team he fought to retain for two years and in two courts.
McCourt and Major League Baseball have agreed to seek approval from the U.S. Bankruptcy Court for an auction of the Dodgers, according to a joint statement issued late Tuesday night. The sale is expected to include the team, Dodger Stadium and the surrounding parking lots, a package bought by McCourt for $421 million in 2004 and likely to sell now for two to three times as much.
“The Los Angeles Dodgers and Major League Baseball announced that they have agreed today to a court-supervised process to sell the team and its attendant media rights in a manner designed to realize maximum value for the Dodgers and their owner, Frank McCourt. The Blackstone Group LP will manage the sale process,” the statement read in its entirety.
Baseball hopes a new Dodgers owner can be in place by opening day next year.
The deal was concluded at about 8:30 p.m. Pacific time, said a person familiar with the discussions but not authorized to talk about them. McCourt, who was in New York for the negotiations, is expected to meet with reporters in Los Angeles at a later date.
McCourt had considered whether to sell for several weeks, ultimately deciding that the interests of his family, his businesses and the team would be best served with a sale rather than a Bankruptcy Court trial, said the person.
The new owner would be the third since Peter O’Malley sold the team to News Corp. in 1998. The Dodgers had remained in the O’Malley family since its patriarch, Walter, moved the team from Brooklyn to Los Angeles in 1958.
The sale agreement caps what might be the most tumultuous season in club history, which started with San Francisco Giants fan Bryan Stow being beaten into a coma in the Dodger Stadium parking lot and ended with the league charging McCourt with “looting” $189 million in team revenue for personal use. The Dodgers called that allegation inflammatory and unsupportable.
In the interim, the Dodgers played before a half-empty stadium, with McCourt saying the league had spooked fans by raising unwarranted concerns about stadium security and the league saying fans had refused to support McCourt’s ownership.
McCourt took the team into bankruptcy in June. McCourt and Commissioner Bud Selig had been scheduled to testify at a trial this week, but the court postponed the proceedings to allow settlement talks to proceed.
The sale agreement removes what McCourt’s attorneys had called the “cloud of uncertainty” that had settled over the Dodgers during the legal battle for ownership of the team. McCourt had long insisted he would prevail as sole owner of the team and would not sell it.
In divorce court, McCourt’s ex-wife, Jamie, claimed half-ownership of the Dodgers. In Bankruptcy Court, MLB asked the judge to order the team sold. McCourt now has reached a settlement in both cases, within three weeks of one another.
McCourt might need the Dodgers to fetch at least $1 billion at auction in order for him to break even after paying off debts and taxes, according to court records in California and Delaware. He has agreed to pay his ex-wife $130 million in the divorce settlement, which is set for court approval Nov. 14.
Bidders could include Mark Cuban, owner of the NBA champion Dallas Mavericks, who was runner-up when the Texas Rangers were auctioned in Bankruptcy Court last year. Chicago White Sox executive Dennis Gilbert, the former player agent who also bid on the Rangers, is expected to assemble a group to bid on the Dodgers.
Southern California businessmen Ron Burkle, Alec Gores and Alan Casden also could be bidders. Burkle and Gores have ties to professional sports and Casden pursued the Dodgers before McCourt bought. Other potential suitors include Milwaukee Brewers owner Mark Attanasio and Boston Red Sox Chairman Tom Werner, each of whom live in Los Angeles. Former Dodgers stars Steve Garvey and Orel Hershiser also have expressed interest in putting together an investment group to bid on the team.
McCourt bought the Dodgers with what one of his divorce attorneys said was “not a penny” of his own cash. He nearly doubled team revenue — from $156 million in 2003 to $286 million in 2009, according to court documents — and the Dodgers reached the playoffs four times in his first six seasons of ownership.
On the eve of the 2009 National League Championship Series — with the Dodgers about to make their first back-to-back NLCS appearances in 31 years — the McCourts announced they had separated.
The Dodgers lost that series in five games and have not finished above third place in the National League West the last two seasons.
Tuesday night, before the settlement was announced, Dodgers pitcher Clayton Kershaw reacted to the news that the sides were talking and might be nearing a resolution. “That’s positive,” he said. “Whatever happens, it’s definitely great to have it all resolved.”
On the day the McCourts announced their separation, Marshall Grossman — then an attorney for Frank McCourt — said his client owned the team and would continue to own the team.
“This is not going to be another San Diego-like debacle,” Grossman said.
Grossman referred to John Moores, the former owner of the San Diego Padres, who had to sell his team to finance a divorce settlement. Grossman said Frank McCourt had a marital property agreement that specified the Dodgers were his separate property rather than community property.
However, attorneys later discovered three copies of the agreement that said the Dodgers belonged solely to Frank McCourt and three that said they did not. After an 11-day trial last year, Los Angeles Superior Court Judge Scott Gordon threw out the agreement.
In a Bankruptcy Court filing, attorneys for McCourt alleged that Selig responded to the “enormous negative publicity” of the divorce trial by hatching a plan to choke off the Dodgers’ money supply and force a sale of the team.
The league alleged McCourt’s financial mismanagement in asking the Bankruptcy Court to order a sale.
Frank fired his ex-wife as the Dodgers’ chief executive officer in a termination letter that cited “insubordination, non-responsiveness, failure to follow procedures and inappropriate behavior with a direct subordinate,” a reference to an affair he alleged she had with her driver.
When Jamie McCourt initiated the divorce proceedings — one week shy of what would have been the couple’s 30th anniversary — she revealed the details of a lavish lifestyle ultimately financed by Dodgers fans.
“Frank and I enjoyed the many perquisites and benefits that come with owning a Major League Baseball team,” she wrote in a court declaration.
She wrote of combined salaries of $7 million a year, plus $46 million to buy side-by-side oceanfront estates in Malibu, $27 million to buy side-by-side homes near the Playboy Mansion, additional properties in Massachusetts, Montana, Colorado, Wyoming and Mexico, $400 dinners and $1,000-a-night hotels, private jet travel around the world, even house calls from hairdressers and makeup artists.
Staff writer Dylan Hernandez contributed to this report.
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