NOMONEYBALL: To understand the complicated problem that is the Los Angeles Dodgers, imagine that you want to buy Microsoft in its entirety. You surely don't have enough money to buy Microsoft, and no bank in its right mind would loan you the money. But why should that stop you? Why not just have Microsoft take out a loan for the purchase price, then give that money to you? You are the owner, after all. And then Microsoft just has to make enough money over the term of the loan it took out to pay off the purchase price. This is how Frank and Jamie McCourt bought the Dodgers. There is nothing inherently wrong with this -- companies are bought this way (more or less) every day. It's even how Ted Turner bought the Braves. The trick is convincing a bank that Microsoft-plus-you will be profitable enough (presumably, though not necessarily, so much more profitable than Microsoft-without-you) that Microsoft can pay its debt to the bank while returning some profit to you. That was the idea behind the McCourts buying the Dodgers without using any significant amount of their own money.
The idea probably wasn't that the McCourts would cause the Dodgers to take on even more massive debt, shed assets, and use the proceeds of the debt to pay the McCourts' lavish personal expenses. And then make sure that the family's salaries and the family's kids' salaries and the family's half-dozen mortgages and personal staffs' salaries are paid, even though the team isn't paying its bank debt and might not even be able to make payroll for the players -- the ones who play baseball, which is what the Dodgers supposedly do. And then hold a big divorce party, where the only thing that the two sides can agree on is the signing of a huge television contract where a quarter of the $385 million that Fox was going to loan (not give, loan) the Dodgers up-front goes not to the Dodgers, but to the McCourts personally, because the Dodgers have better things to do with $93 million than pay banks and players -- Frank and Jamie need their $65,000 a month (each) allowance (that's a real number, by the way).
Not so fast, said MLB commissioner Bud Selig today, rejecting the TV deal under which the Dodgers were going to borrow money so that they could give almost $100 million directly to the McCourts. I think I've never said this before, but good job, Bud Selig. The McCourts have cannibalized the Dodgers in a way that, were it a normal American business, quickly would have driven the Dodgers out of business. Since it is not a normal American business -- it is part of Major League Baseball, which cannot let the Dodgers fold (and that, more than the fact that we're talking about the team of Robinson and Koufax and Fernandomania and Kirk Gibson's home run, a veritable Benetton ad of Hall-of-Fame memories, is what will keep the Dodgers alive) -- it's up to baseball to save the Dodgers from the McCourts.
Now there's going to be litigation. The McCourts go back to their tabloid divorce litigation, and they'll open up a new front against Selig and baseball, which will try to force the reconsolidation of the Dodgers' assets (like the parking lot and the ticket sales stream, which, I shit you not, have been separated from the team) and sell the package to some real businesspeople. Get some sleep, Frank and Jamie. It's going to be a long war.
