Over the last several weeks, the popular media has vilified Frank McCourt. In making him their piñata de jour, the media have turned McCourt into L.A. public enemy No. 1. They have even personally blamed him for the tragic attack on Bryan Stow at the opening-day game. But one must question whether it is really appropriate to hate Frank McCourt when not viewed through the eyes of a fan. And remember what “fan” is short for … FANATIC!
So what are they accusing McCourt of? Killing a toddler? Drowning a puppy or kitten? Impregnating his maid while married and then lying about it for a decade? Conning thousands of people out of billions of dollars? With the attention he’s been getting, McCourt must’ve done something pretty bad. But wait, he was merely making decisions for a family business in which he owned a 100 percent share (wife Jamie may disagree with the ownership percentage). And on the biggest decisions that he’s getting the most flack about, he got Major League Baseball’s approval? Seriously?
Commentators assert that McCourt has been using the Dodgers as his “personal piggy bank.” So? This is the essence of capitalism. Winston Churchill once said, “Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.” The McCourts were just milking their own cash cow. Baseball is a business. It is not a charitable organization or a government entity. For decades, America has taken pride in the business acumen of its daughters and sons. Our business schools attract people the world over eager to join the ranks of American businessmen and -women. But when it comes to the Dodgers, our deeply American capitalist values go out the window in favor of the knee-jerk emotional reaction to the McCourts.
The reality is that the Dodgers are not the first sports team to file bankruptcy nor will they be the last. And like those other teams, the Dodgers will survive. Baseball Commissioner Bud Selig himself brought the Seattle Pilots to Milwaukee to become the Brewers through a bankruptcy case.
When we look at this business compared with the rest of the MLB, McCourt ran a pretty tight ship. The Dodgers are not even among the five teams with the highest debt-to-value ratios. In fact, under McCourt, revenues doubled. The team’s profits compare very favorably with the highest-profit-earning teams in the league. While we might think some of McCourt’s transactions concerning the Dodgers were questionable, the securitization of future ticket revenues was approved by the league in 2005 and several other teams have taken part in off-balance-sheet financings with the blessing of the commish. The separation of the stadium and parking lot real estate also had MLB approval.
And lest we forget what we had before the McCourts: about six years of ownership by Rupert Murdoch’s Fox Sports. Under Fox, the team consistently lost money. But beyond the money, under Fox, the Dodgers never made the playoffs and replaced popular players (Mike Piazza) with expensive and ineffective players (remember the first $100 million man, Kevin Brown?). In their first six years of McCourt ownership, the Dodgers made the postseason four out of six years including the National League Championship series twice.
Full and fair compensation
How can we rationally justify that McCourt may lose his team and not get full and fair compensation for its value? The Dodgers are one of the most valuable sports teams in the world, in no small part due to the McCourts’ ownership. Even with all of the turmoil surrounding the team in the last year or so and the Great Recession, it has increased in worth by 10 percent to $800 million, according to Forbes magazine. The Dodgers are very solvent and all creditors will get paid in full in the bankruptcy.
Sure, buying seven luxury homes might seem excessive. Jamie McCourt’s million-dollar monthly allowance may be a little much. On an emotional level, there may be many reasons to hate the McCourts. But on a logical level, there is none. McCourt is the rightful owner of the Dodgers and the biggest transactions he engaged in were approved.
The bottom line is that we have bank officials who perpetrated billions of dollars of fraud on investors and helped cause our current housing crisis and not one is in jail or has lost assets, yet people are rooting for McCourt to lose everything through the MLB seizure and sale of the Dodgers. In terms of relative moral blameworthiness, Frank McCourt doesn’t even register.
Jess Bressi is a litigation and bankruptcy partner in the Orange County office of the Luce Forward Hamilton & Scripps LLP law firm and roots for the Angels. Rachel Bressi, his daughter, is a second-year law student at UCLA.
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