The "increasing support" for the McCourt bid mentioned in the Times article shouldn't suprise anyone. Baseball has to cover its collective ass, and McCourt is a litigious sumbitch. So they go through the motions and let the clock tick, all the while spouting positive platitudes to the press. If Bud really wanted to ram this through -- or thought he could -- it would have been done by now. As it stands, McCourt has missed three vote opportunities. Game over, McCheap.
Less than 24 hours later, Rob's whistling a different tune:
The Los Angeles Times today reports on the final nail in the Dodgers' coffin: the first meaningful restructuring of the McCourt deal. News Corp will retain a miniscule amount of equity in the team, but just enough to tip the scales in favor of McCourt. It is frankly a fig leaf; McCourt should have been laughed out of this purchase by baseball, but thanks to Fox ownership, this bad deal is now likely to go through.
For what it's worth, I have a timeline of events of this catastrophe. I don't get why Peter Gammons or any of the other east coast -- er, did I say that? I meant "national" -- sports press isn't picking up on this and condemning it the strongest possible terms. Or is it that bad ownership is a clichι?
From the sound of the aforementioned article by Ross Newhan, the corner on the deal has been turned:
The sale of the Dodgers to Boston real estate developer Frank McCourt moved closer to completion Wednesday when News Corp. agreed to retain a minority ownership position, putting McCourt closer to compliance with the industry's debt service rule by reducing the amount of money he is borrowing in his highly leveraged, $430-million proposal.
The restructured arrangement which requires that McCourt find a Los Angeles-area investor to buy out News Corp.'s equity share within a period of 12 to 24 months moved closer to being finalized during another long meeting between McCourt and his wife, Jamie, and representatives of News Corp. and Major League Baseball in New York.
Multiple sources said they expected Commissioner Bud Selig to schedule a conference call vote of major league owners for early next week, which would be ahead of the Jan. 31 deadline in the initial contract between McCourt and News Corp.
As to Rob's query about the sports press, I'm surprised the Boston-linked Gammons hasn't piped up about Boston real estate developer McCourt, who isn't exactly loved around those parts. But not everybody in Boston's been quiet. Boston Globe business columnist Steve Bailey offered some harsh satire last week:
The McCourt Appeal is designed to help our parking lot attendant realize his dream of owning a major league team -- only not here. We've seen enough; it's someone else's turn. Can't L.A., the land of the car, use some parking lots? Send those donations to the Frank McCourt Appeal, c/o The Downtown Column, The Boston Globe, Boston, MA 02107. Give till it hurts.
Few in this town have talked the talk more and walked the walk less. McCourt is strong on vision. Doing is his problem. Cooperative is not a word often associated with the man. For years he has presented countless slide shows with his vision of the New Boston on the other side of the Fort Point Channel. No other plan was ever grand enough for McCourt. He was going to buy the Red Sox. He was going to build a new Fenway on the waterfront. Instead, 25 years after McCourt bought his South Boston land from a bankrupt Penn Central, what we have down there is acres of parking lots.
Well, those gloves are off. But for whatever it's worth, my assumption is that major sportswriters such as Gammons are afraid to bite the hand that feeds. Criticism of a potential ownership bid might threaten the inside access they're so dependent upon. Gammo, for one, is not a journalist, he's a gossip columnist. A good one, to be sure, but he gave up hard news reporting a looooong time ago, and his hyperventilating run-on sentences should not be confused with journalism.
Revenue sharing from Major League Baseball has increased. In 1999, the team received $8.1 million in revenue from baseball. By 2002, the team got $9.1 million. The Brewers received $15 million in revenue sharing this past season, a direct result of the game's new collective-bargaining agreement with its players. According to the Brewers' own forecasts, the team expects to receive $20.7 million in 2004 and $22.5 million in 2005, although the final figures will be dependent on the revenue other clubs produce.
I'll say it again: it's amazing how buried this information is relative to the widely-reported news about the Yankees' revenue sharing payment, and it's yet one more data point illustrating Bud Selig's impartial (cough, cough, hack, yack) position as commissioner.
Speaking of Bud on the Milwaukee front, Pinstriped Bible-thumper Steven Goldman had this gem in his latest column:
The more important point to be made about new ownership for the Brewers is that it's about time. Perpetually failing franchises are always a combination of transient and constant factors. The general managers, managers and players are transient. Ownership is permanent. The Brewers may be handicapped by the smallest media market this side of Bob the Luddite's TV-Free Freehold of Monticello, Mississippi, but we have seen other teams, such as the Oakland A's and the Minnesota Twins, succeed at being small-market without being small-minded.
Not so with the Brewers. No one forced Jeffrey Hammonds on the Seligs at gunpoint. There was no popular campaign for Eric Young, no contract on anyone's life that forced the franchise to pretend Alex Sanchez was a good player. The same goes for Marquis Grissom, Charlie Hayes, Henry Blanco, and onwards. A team can win, at least on a one-year-at-a-time basis, on a strict budget as long as it understands it has no margin for foolish errors. Signing a player, playing a player, without asking, "What will this guy DO to help us win?" invites disaster.
The Selig organization again and again failed to get good answers for that question.
Some well-deserved blows, but it's worth noting that these days, ownership is not quite as permanent as Selig's 34-year stranglehold of the Brewers wouid have you believe. And the reason for that is the very same rug-wearing rapscallion. As I've written before, there's a tax law called the five-year depreciation which explains a lot of ownership turnover:
The five-year rule allows half of a franchise's purchase price to be allocated to player contracts and depreciated over that span, creating an artificial loss which reduces the owner's tax liability. So if I buy the Dodgers from Fox for $400 million, I can write off $200 million of that, which is $40 mil a year. When five years are up, I, just like other owners, particularly the corporate ones, bail on the Dodgers and find a new tax shelter. See: Disney's Anaheim Angels, anything Jeffrey Loria has touched, and the entire history of the Florida Marlins (Huizenga to Henry to Loria, Oh Shit!).
Incidentally, the guy who came up with this grand scheme is the same guy wearing the ugly toupιe. From a CNN/SI piece last spring:
This legal rule was actually generated by a major tax law victory won by Bud Selig in his former baseball role, as a new owner when Selig bought the Seattle Pilots for $11 million in 1969 and moved them to his hometown of Milwaukee,'' says [Harvard law professor Paul] Weiler, author of Leveling the Playing Field. "It was a terrible legal verdict that was won by a guy 30 years ago in a different world.
I'm dizzy from quoting myself quoting an article which quotes a professor, but it's worth noting that the five-year rule is one reason Bud is so revered among owners, especially new-breed ones, and it will stand as one of his lasting legacies to the game. Hey, those IRS guys like their box seats just fine.
Speaking of the commissioner, I took some pretty good shots at Bud Selig myself last week over an item buried in the L.A. Times' coverage of the Vlad Guerrero signing. My interpretation of Bill Shaikin's article was that Selig had effectively blackmailed would-be Dodger owner Frank McCourt out of signing Guerrero in exchange for the commissioner's blessing regarding the Dodgers' sale. With the help of Jon Weisman of Dodger Thoughts, I made a big stink which generated a fair amount of discussion on a few sites, including Baseball Primer. The general consensus was not quite the outrage I had hoped for, with the most common reaction along the lines of, "Well, duh, McCourt doesn't have the money to buy the team anyway," which was right in line with Weisman's original interpretation of the Shaikin article.
My point was that Selig has the power to frame any interpretation of McCourt's financing and cue the approval process -- "I think this checks out, boys," or "I think it's a bit shaky, fellas." As such, his interest isn't in McCourt's financing, but in his fealty.
McCourt's bid is most definitely underfinanced; I've now done enough homework to see that more clearly. But taken from any angle, the conduct of all involved is problematic. A non-owner calling the shots for a team he may not be able to buy BEFORE he actually takes over is bad, a commissioner telling teams who they can and can't sign is bad, and a commissioner attaching his seal of approval for a sale based on loyalty is bad as well. I don't want any of that, whether it's a team I'm rooting for or not.
I will concede that if the speculation is true that McCourt, a Boston real estate developer, is interested in buying the Dodgers so that he can build a downtown ballpark, raze Dodger Stadium and develop the Chavez Ravine land for his own devices, then there is no action on the part of Bud Selig, the United States military, or organized criminals (even disorganized ones) that I will not condone to prevent that from happening. Smite him and his seed from the earth if he so much as lifts a finger to harm that ballpark; I promise not to say, "boo."
For all of the badness in this bidness, the scrutiny has turned back to McCourt's flawed quest to buy the Dodgers. Weisman linked this lengthy L.A. Daily News article by Rich Hammond which is pretty damning:
Frank McCourt might win Major League Baseball's approval to buy the Dodgers by the end of the month, but his limited financial resources have raised significant concern among Southern California sports executives and has led local businessman and philanthropist Eli Broad to put forth what is believed to be a more attractive backup plan.
A McCourt ownership likely would lead to a lower team payroll and increased ticket prices, according to three sources involved in top-level, day-to-day operations of professional teams in Southern California.
The sources and experts in sports finance said the Boston developer is borrowing heavily to buy the Dodgers -- a franchise insiders say is losing $40 million a year -- because he has failed to find suitable partners for a $430 million deal that taxes his own resources.
Broad's proposal wouldn't require partners, and reportedly he would ask current owner News Corp. for a small loan, which presents a stark contrast to McCourt's highly leveraged bid.
The article then goes on to several responses to the McCourt bid. An unnamed source gives McCourt three years before realizing he had to sell the team, while USC professor and sports consultant David Carter offers a disturbing analogy: "It's like a high school kid who convinces his dad to buy him a car. He gets the car, but then he realizes he can't afford to buy the gas. I think Dodger fans should be concerned that, in this case, they're going to be the ones buying the gas."
The aforementioned Broad deal is interesting. He has local ties, along with a reputation for grand ventures and grandiose schemes, and he's apparently willing to bring former owner Peter O'Malley back to run the team. While McCourt has a January 31 deadline on exclusive negotiating rights to buy the team, the knowledge that another, better-financed suitor may be waiting in the wings, prepared to offer the same amount as McCourt, perhaps the Fox Group and the other owners might be less likely to ramrod this one through.
A high-ranking baseball official told the L.A. Times that the owners are aware of Broad and "it stands to reason he could move through the approval process very quickly if it came to that." But Ross Newhan of the Times also reports that MLB president/COO Bob DuPuy thinks the McCourt deal can be done on time:
Bob DuPuy also said that despite issues that pertained to baseball's complex and important debt-service rule in McCourt's $430-million proposal, he still thought that the sale could be completed before Jan. 31, the deadline in the agreement involving McCourt, the Boston real estate developer, and News Corp., the Dodger owner.
"As to what significance the development with Eli Broad has is a question for News Corp.," DuPuy said. "As for baseball, we have no reaction in the sense that News Corp. has asked us to process the McCourt application and that's what we're attempting to do. I think both the buyer and seller want it done and that's what we're trying to do."
Newhan's piece is all over the map ("Ross Newhan Is Playing Ping-Pong With My Brain," writes Weisman):
Selig seldom puts an issue up for a vote unless he knows the outcome, which in most cases is to rubber-stamp his desires.
This case, however, is tougher to read.
Whether Selig is determined to have McCourt approved as a favor to News Corp. because of its national and regional TV contracts with baseball or whether he would let owners reject the sale, feeling that he could tell News Corp. that he had done everything he could, isn't clear.
He has insisted that the debt-service rule must be fastidiously and aggressively applied and that the Dodger situation has to be resolved quickly to restore stability to one of baseball's flagship franchises.
Although Broad's emergence has provided baseball with a viable alternative -- a person who is highly respected in the community and requires no credit check -- the timing of his letter, coming late in the process, has almost seemed to increase support for McCourt.
On Monday, a high-ranking baseball official said McCourt was being "prejudged unfairly" by Los Angeles media, which has raised questions about his leveraged proposal and operating resources if approved.
Rubber stamps, debt-service rules, and a media-induced backlash (implicating the Times) that may work in McCourt's favor? I'm not sure which is spinning more, my head or Newhan's story. But I don't think there's a Dodger fan out there who can like the way this is unfolding. Right now the best thing we can hope for is the clock running out on this sickly bid.
Baseball fans and Wisconsinites had reason to rejoice last Friday, when Wendy Selig-Prieb announced that the Milwaukee Brewers are being put up for sale. The longest-tenured ownership in major league baseball is on its way out, providing a glimmer of hope for a team which has suffered eleven straight losing seasons and a 21-year postseason drought. Not only does the franchise have a chance at a fresh start via a new ownership, the sale will remove commissioner Bud Selig's blatant conflict of interest -- namely his 26 percent stake in the franchise, which was placed in a trust in 1998.
The Brewers have had a rough winter. Just after season's end, team president/CEO Ulice Payne was forced out by the board of directors when he publicly objected to their plans to cut payroll by 25 percent. Legislators reacted to the bad publicity the move generated by saying that the Brewers had reneged on their pledge to field a competitive team in exchange for $400 million of taxpayer funds to build Miller Park, and have pushed for a state audit of the team. Meanwhile, star attraction Richie Sexson was traded to Arizona in a nine-player deal that brought unimpressive returns.
The basic details of the Brewers' situation are gory enough without peeking into the books: $110 million in debt, $44 million in new money poured into the franchise during the past six years, a 40 percent drop in attendance since Miller Park opened, one of the league's smallest payrolls coupled with the biggest slice of the revenue-sharing pie, and two consecutive last-place finishes. Every detail screams the same conclusion: this team is bankrupt of good ideas and needs a change, starting at the top.
That's been the case ever since 1992, when Selig led the palace coup which dumped commissioner Fay Vincent and himself became acting commissioner. Not coincidentally, that was the last season the Brewers finished above .500, and in the six years Selig kept the "acting" role, he showed far more interest in backroom politics and battles with the players' association than he did with putting a winning product on the field. His sole accomplishment with the Brewers since ascending to the dubious throne was completing the stadium deal which resulted in Miller Park, a $400 million boondoggle with a busted roof. Nevertheless, it's that park's 30-year lease which will keep the Brewers in Milwaukee after they're sold.
As acting commissioner, Selig's shining accomplishments included presiding over a 272-day player strike, canceling the 1994 World Series, and instituting the three-division league, the wild card, and interleague play. That stellar record of achievement enabled him to become full-time commissioner in 1998, while his interest in the ballclub was placed in a trust. While he's clearly spent more time waging his disinformation war on the baseball world as full-time commissioner, it's impossible to believe that Bud's role in the Brewers has entirely ceased. The words of his henchman, MLB president and COO Bob DuPuy, don't even ring true: "Bud has been scrupulous in avoiding any appearance of either favoring or being involved with the operation of the Brewers." Not when Selig has invested $13.2 million in the ballclub over the past "five or six" years (nobody, not even the Milwaukee Journal Sentinel, seems concerned with determining the temporal accuracy there; that vagueness has been a staple of every Brewers-related financial report this winter). Not with his daughter assuming the team president and CEO titles and then stepping down from those roles after 2002 to stay on as chairwoman of the board, from which perch she keyed Payne's ouster. Not when one potential investor was told last year that "board members did not want to accept outside investment that threatened Selig's control of the team, albeit through a trust."
And not with the Brewers somehow receiving the largest chunk of revenue sharing money of any team, a fact which remains obscured and underreported. On that note, here's a challenge: the first person to send me a link to a published report of the Brewers's actual (not projected) revenue sharing money for 2003 wins a Futility Infielder coffee mug. The news that the Yankees made the largest revenue sharing payout in 2003 was widely reported, but nowhere did anything say which teams will be on the receiving end, or how much money they will get. It's good to be the king, because you can sweep that kind of news right under the rug.
Art Thiel of the Seattle Post-Intelligencerlays some good lumber on Selig over his ethical issues. Starting from the viewpoint that Pete Rose doesn't understand why his actions have worked against the best interests of the game, Thiel essentially asks, "Et tu, Bud?":
Having said that, it is nevertheless difficult not to feel a twinge of empathy for the pug following news late last week that the Milwaukee Brewers were put up for sale by Bud Selig, who not only has owned the team since he hijacked the Pilots from Seattle in 1970, but, as commissioner since 1992, has been Rose's opponent to reinstatement.
In Selig's statement regarding the sale, he said in part, " ... While I have played no role in the administration of the Brewers, putting my ownership share in trust in 1998, I am convinced and have been for many years that it is in the best interests of the game" to sell.
Really? If my math is right, that means it took two years less for Selig to realize he was compromising the game than it took Rose.
On behalf of a grateful America, Mr. Commissioner, I salute you for your rapid response and, in demonstrating you have at least 14 percent more integrity than Rose, we hope you bring the same high standards to the search for weapons of mass destruction in the greater Milwaukee area.
Selig didn't describe the bolt of enlightenment that moved him to cop to the obvious -- that the embarrassing conflict of interest between his jobs never should have been allowed to happen.
All we know is that the motivation couldn't have been conscience, because if that had ever been a threat in his life, he never would have stolen the Pilots.
"Stolen" is such an ugly word. Selig was part of a group that in 1970 purchased the floundering Seattle Pilots for $10.8 million. The Pilots had gone bankrupt during the spring training prior to their second season; barely a week before the season, the team hastily moved to Milwaukee, with a new name and logo sewn directly onto their old uniforms. Legend has it that the van containing the Pilots' equipment left Arizona spring training and parked in Utah, waiting for instructions on which city the ballclub would call home.
Thiel points to the sorry state of the Montreal Expos, the Red Sox-Marlins-Expos ownership shuffle, and the contraction debacle as just some of the ethical lapses on Selig's watch. About the latter:
If indeed contraction were ever viable, a strong candidate today would be a team that has had 11 consecutive losing seasons, a claimed debt load of $110 million, a disenchanted fan base and a lease that is ironclad. Instead, Selig will now attempt to sell the Brewers in one of baseball's smallest, least affluent markets.
It might be tempting to suggest he is about to be hoist with his own petard. But Selig invested only $300,000 of his own money to buy the Pilots in 1970, and should the Brewers sell for, say, the $180 million price last year of the Angels, his share would be almost $47 million, less the $13 million he is said to have invested in operations.
So, presuming he can find a buyer, he will emerge nicely. It will be hard to say the same for baseball during his tenure as commissioner.
It's open season on Bad Rug Bud. And while I'd prefer if he confined his incompetence to one franchise rather than spreading it out over 30, I know that the good people of Milwaukee have been looking forward to the day Selig sells the team for a long time.
Thanks to Stephen Nelson of Mariners Wheelhouse for clueing me into the Thiel article ahead of the curve.
