Major League Baseball's decision to take over the team echoes the government's moves to stabilize the auto and banking industries
Major League Baseball seized control of the Los Angeles Dodgers on Wednesday, a move that is the sports-world equivalent of the government taking over General Motors. Nothing the team does now—from raising concession prices to making a trade—happens without the league's approval. In a town used to seismic events, this one rates as massive, and its effects are deeply emotional. It's a transformative moment for the Dodgers' fans and players, who have suffered through the protracted divorce of the team's owners, Frank and Jamie McCourt, whose eventual settlement may be the most expensive divorce in California history.
No city figure claims to have anticipated this; nor did Steve Soboroff, the businessman and former mayoral candidate hired earlier this week by Frank McCourt to get the Dodgers' house in order. But like the financial meltdown that precipitated the Great Recession, this latest development was long in coming, its signs chartable, its villains exhibiting the same flaws found in the CEOs of our nation's largest banks—namely, greed, an obsession with PR over substance, a reliance on highly leveraged deals, and a belief that the good times would go on forever. These are the qualities of Jamie and Frank McCourt, who since their arrival in L.A. have displayed more drive in insinuating themselves into the city's high society and cultivating good press than pleasing the team's fans or exercising fiscal responsibility.
The Dodgers are at least $433 million in debt—which is about equivalent to the national debt of Djibouti. The McCourts bought the team from Fox in 2004 for $430 million (whether the team is owned by Frank McCourt or both Frank and Jamie is the central component of their divorce trial; Frank asserts he is sole owner, while Jamie claims a 50-50 split). Fox loaned the couple $145 million to facilitate the deal. But it wasn't the only time Frank McCourt would turn to Fox for money to buttress its former asset. In February, the team attempted to borrow $200 million from Fox, but the league office intervened, forbidding the loan. McCourt then bypassed the league by personally borrowing $30 million from Fox—and that was just to meet April's payroll.
The owners' divorce proceedings have revealed a litany of offenses that have contributed to a growing populist backlash against the McCourts. Rather than paying down debt, they treated the team like a personal bank, taking $108 million from its coffers, much of it to fund the many houses they've purchased around Los Angeles (including two adjacent mansions in Holmby Hills). They put their sons on the payroll, despite their doing no work for the team, and charged the team millions in rent on stadium property, which the McCourts also own. For several years, they managed to pay no taxes.
All of this is on top of steep rises in ticket prices and parking fees, as well as the team's decision to leave its historic spring training site, Dodgertown, in Vero Beach, Florida, for a shared facility with the White Sox in Arizona. And then there's the bizarre, frighteningly real story of Vladimir Shpunt, a septuagenarian Russian healer who the McCourts paid six-figure fees to send positive "V energy" to the team.