Revisiting the McCourt’s 2004 Purchase of the Dodgers

Josh at Dodger Divorce posted that it’s possible Dennis Gilbert, an insurance business owner and Dodger season ticket holder, may be in line to buy the Dodgers if/when the McCourt(s) put it up for sale.

Gilbert was part of the Greenberg/Ryan group that attempted to purchase the Texas Rangers, but was ultimately shot down. Josh astutely pointed out how poetic it would be if Gilbert didn’t receive his second choice of teams to own and ended up with his first choice, as opposed to Frank McCourt, who failed in his bid to get the Red Sox, his favorite team, but successfully purchased the Dodgers.

All of this got me thinking about when this all started.

In January of 2004, Frank McCourt officially announced himself as the new owner of the Dodgers, along with his wife, Jamie. The opening press conference was an era of good feelings. The Dodgers were no longer run by corporate ownership. There was a name and face to the franchise owners again.

And to that, I was happy. I’m sure a lot of people were.

Said acting Commissioner Bud Selig:

The sale of the Los Angeles Dodgers to Frank and Jamie McCourt heralds the beginning of a new era of family ownership for one of the game’s most storied franchises. This transaction meets all of Baseball’s debt service rules and financial requirements in every way. We at Major League Baseball are confident that Mr. McCourt, as a rabid and knowledgeable fan and successful businessman, will devote the time and energy necessary to make the franchise a great success.

PR jargon, but it was a good day. There was hope. The sale was woefully expensive, though ($430 million was the second largest sale of a MLB franchise in history, second only to–you guessed it–John Henry’s purchase of the Red Sox), and a lot of it was made on debt. I was 19 at the time and probably didn’t understand any of this–heck, I knew more about European political party systems than I did about purchasing things with debt, ironically. An owner saying “yeah, we’re gonna keep payroll up and also we’re gonna win the world series” sounded really good. Especially after six years of abject failure under NewsCorp.

But I digress.

I seem to remember there were other offers on the table, but can’t find any after an exhaustive google search. I dunno, maybe there weren’t. If there weren’t, I could see why the team was sold to McCourt.

Regardless, Frank made a lot of promises that day.

McCourt told the fans that the team will remain in Dodger Stadium for the long term and that he only intends to make improvements to the 42-year ballpark in Chavez Ravine; that the Dodgers will maintain a player payroll in excess of $100 million and that he will continue to spend in the upper tier; that he will not raise ticket prices, concessions or parking rates, aside from modest cost of living adjustments.

“We’re not raising ticket prices,” said Corey Busch, the head of McCourt’s transition team with a probable future as one of his top executives. “There might be cost of living increases for concessions because the cost of the products always go up — hot dogs, soda and buns.”

And finally, 150 games will be broadcast locally — 100 by Fox Sports West II and 50 by KCOP. The other 12 games are available to be broadcast by Fox nationally. Later, McCourt said he had signed a new 10-year deal with the regional Fox network at market value to televise the games. Though Busch and McCourt declined to reveal the value of the television package, McCourt said it would “significantly increase the Dodgers annual revenues.”

I seem to remember that promise on raising ticket prices was kept, but the price shot WAY up the year after when the team won the NL West. I don’t remember how much field level tickets cost in 2004, but they were pretty damn cheap and shot way up. I think field level tickets went from like $35 to $60, but again, that’s poor memory. They’re now at $105. In 1998, they were $28-32, and that bump was incredibly controversial.

The $100 mil payroll was kept, despite how arbitrary it was, except for one year. The funniest part was when media (mostly Plaschke, iirc) held that exact quote against McCourt. This was in 2005 and the team just flat out stunk that year. Apparently Mr. Plaschke didn’t realize in order to rebuild a team,

And before we get into that, let’s remember the hiring and firing that took place immediately after McCourt bought the team. Dan Evans was replaced as GM by Paul Depodesta. Evans didn’t necessarily deserve that; he had done an excellent job running the Dodgers on a tight budget with several overpaid players. He shipped off expensive Kevin Brown to the Yankees and received Jeff Weaver and Yhency Brazoban, both of whom had some good years for the Dodgers. And he had also rebuilt the farm and several prospects were beginning to make their way up.

Depodesta was definitely a great hiring, but controversial. He was met with a lot of criticism, especially from two LA Times columnists: TJ Simers and Bill Plaschke.

Though Depo had done a decent job in his two years. He kept on scouting director Logan White and assistant GM Kim Ng. He signed JD Drew, who was a fantastic outfielder. He signed Jeff Kent, who turned out to be a very good second baseman in his twilight years. He had Milton Bradley and Jayson Werth; Odalis Perez and Jeff Weaver. He added Derek Lowe. He added Brad Penny. He did a lot of smart things.

But he let Adrian Beltre go after the 2004 season. He signed Olmedo Saenz, Jon Valentin, and others–players who didn’t seem to deserve to be on an MLB roster–and opened himself for criticism. During the 2004 trade deadline, he traded several key parts of the team (Juan Encarnacion, Guillermo Mota and Paul LoDuca, specifically) for players who didn’t seem quite as good–Brad Penny, Steve Finley and Hee Seop Choi. Choi turned out to be a bust, but Penny was a very good starting pitcher and Finley was a decent addition.

In hindsight, these were all fantastic moves. Beltre never repeated his amazing season and LoDuca and Mota were pretty much never above average ever again. Finley was a decent addition for a half-year and Kent and Drew were both very good in their years as Dodgers.

But he didn’t have the owner’s support through it all.

But people have short term memories and like to ascribe success to people that don’t necessarily deserve it. After firing Jim Tracy, Depodesta was let go.

In 2006, Ned Colletti was hired (with manager Grady Little) and the team payroll was bumped up to $98 mil. I can’t think of anyone who stepped into a better position. He had payroll flexibility, money to spend, a farm system just about to ripen and very good personnel below him.

Anyway, back to the point.

The 150-game broadcast was true. McCourt I believe then parlayed that into splitting the broadcast coverage between KCAL and FSN Prime Ticket to have all of the Dodgers’ games broadcast.

No World Series title delivered, though. Reading over that article is depressing as heck. It was so hopeful. The possibilities were endless. Six years after that original article and what have we learned about Mr. McCourt? He’s neurotic. He’s very sketchy when it comes to money. He’s had to fight tooth and nail with his wife through their divorce proceedings, during which horrible secrets about his ownership and his personal finances have been revealed.

But he ran a surprisingly tight ship. Ignoring the divorce and the neurotic moments, he turned a stadium in disrepair around, raised revenue and made the franchise profitable again. The team in the meantime was pretty successful and although the success shouldn’t be directly attributed to him or his wife, he should at least get a nod for hiring the right people who set that success up.

It’s easy to forget just how awful the NewsCorp ownership period was. How terrible the stadium was and how awful the team was in its worst moments.

If it were 2004 again, I don’t know if I’d OK the McCourt’s offer. The impending divorce tore the team apart. It hurt the franchise irreparably. Money issues first came up in the 2008 trade deadline, when Colletti shipped prized C prospect Carlos Santana to Cleveland for Casey Blake and $2 million, reportedly because he was told the team couldn’t take on anymore payroll. The tragedy is the team was frozen financially when it was at its most successful.

But the McCourts’ era was a successful era. Imagine if Drayton McLane bought the team? Or the Pohlads? Or Ted Lerner? Or the Wilpons? Imagine if the team got an owner who would follow the slotting rule? Or hired a GM that was a stooge? Or hired a GM who wanted to spend absurd amounts of money on not-so-good players (well, more than Colletti did)? Or ran the team as its own business and refused to spend anything more than what the team’s revenue produced?

It’s tough to say. But hey, some success is better than no success.



Filed under Los Angeles Dodgers, MLB, MLB history

2 responses to “Revisiting the McCourt’s 2004 Purchase of the Dodgers

  1. There were several better bids than the McCourt’s bid. The most prominent of which was a cash bid by Eli Broad. Also there were bids by a group headed by former commmissioner Peter Ueberroth and a local real estate guy by the name of Casden.

    McCourt bought the team with essentially no cash, and got an exemption from Selig for baseball’s own rules about debt to equity ratios and engaged in a highly questionable set of arrangements wherein in Baseball allowed McCourt to take a portion of the team as equity (towards the equity part of that equation) by having some notes be McCourt’s personally (or that of other McCourt holdings) rather than as an obligation of the Dodgers per se.

    I’m nobody, but I was not the only one screaming at MLB about this awful decision in 2004. I predicted bankruptcy after five seasons when baseball’s sweetheart new owner tax-exemption ran out. Which would be…umm…before this season started. As we know from the court documents, McCourt owes $430 Mill on the Dodgers. That figure sound familiar? It should, because that is the amount McCourt “paid” for the team back in 2004. He’s been running the team out of cash flow (including generous payments to himself) and leaving the Dodger debt to fester.

    Of course all of this will be familiar to people who have experience of McCourt’s financial dealings. (ask the city of Baltimore about the development there – which happened prior to the 2004 Dodgers deal). Broad himself had been asked to join the McCourt bid to give it at least some cash, but Broad said he wouldn;t be part of any business dealing with McCourt.

    Bud Selig must NOT be allowed to continue to hand-pick owners.

  2. Pingback: Why the McCourt Deal Should’ve Never Been Accepted, a Full-er Analysis « Dingers

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s