06-27-2011, 05:47 PM
This oughta be a movie. The divorce has opened up an incredible world of scandal and greed. The schadenfreude is great for Giants fans.
The McCourts have lived for several years on money they have taken out of the team as debt. As a loan, no taxes are due, and the payback would only have to be when they sell the team. Houses, planes, cars, no problem!
Then, they created some poison pills. Not all has come to light, but the latest is that they have taken various revenue streams (eg, parking, concessions) and "sold" them through other companies. In this way, new owners of the Dodgers would not get this revenue unless McCourt agreed. This was done to prevent MLB from taking the team over.
MLB took over anyway, but it is not clear who is calling the shots.
Recently, McCourt made an agreement with Fox for local media that would have provided about $400m. But a big chunk of the money would not go to the team--it would go to pay off McCourt's wife for the divorce. MLB turned down the contract since they want a competitive team and want McCourt gone. This sent the divorce settlement back to the drawing board since the only asset is the team.
What MLB wants is to force a sale and get rid of McCourt. McCourt wants to hang on. Stalemate ensues.
The bankruptcy filing is because they cannot meet payroll without fresh financing and no one would provide it without a judge in the middle. The Dodgers owe large sums to a number of former players. The largest is $21m to Manny.
The McCourts have lived for several years on money they have taken out of the team as debt. As a loan, no taxes are due, and the payback would only have to be when they sell the team. Houses, planes, cars, no problem!
Then, they created some poison pills. Not all has come to light, but the latest is that they have taken various revenue streams (eg, parking, concessions) and "sold" them through other companies. In this way, new owners of the Dodgers would not get this revenue unless McCourt agreed. This was done to prevent MLB from taking the team over.
MLB took over anyway, but it is not clear who is calling the shots.
Recently, McCourt made an agreement with Fox for local media that would have provided about $400m. But a big chunk of the money would not go to the team--it would go to pay off McCourt's wife for the divorce. MLB turned down the contract since they want a competitive team and want McCourt gone. This sent the divorce settlement back to the drawing board since the only asset is the team.
What MLB wants is to force a sale and get rid of McCourt. McCourt wants to hang on. Stalemate ensues.
The bankruptcy filing is because they cannot meet payroll without fresh financing and no one would provide it without a judge in the middle. The Dodgers owe large sums to a number of former players. The largest is $21m to Manny.