Red Sox Dodged a Bullet
Whenever you're frustrated about the
2004 Sox, remember that things could be a lot worse. Frank
McCourt could have bought the team.
McCourt was an early bidder
for the Red Sox before they were sold to the group headed by John
Henry and Tom Werner in 2002. He wanted to move the Sox from
Fenway to a park to be constructed on land he owned in South
Boston. But McCourt dropped out of the bidding when it topped
In January 2004, McCourt acquired another trophy
franchise, the Los Angeles Dodgers. Unlike the Sox, the Dodgers
don't have a cable network to generate cash for their owners
-- but they do have Dodger Stadium, the Dodgertown spring
training complex in Vero Beach, Florida, and a baseball academy
in the Dominican Republic. The club and its properties sold for
The sale was held up for several months while Major
League Baseball's bankers and accountants examined the
transaction. ultimately forcing McCourt to restructure the deal.
Concerned Angelenos convinced financier Eli Broad to match
McCourt's offer, under a scenario by which former owner Peter
O'Malley would have returned to run the Dodgers, but MLB
refused to consider the bid so long as McCourt still had a
contract to buy the team. And despite considerable effort,
McCourt failed to persuade local investors to join his bid.
In the end, not one dollar of the purchase price came from
McCourt's pocket. He borrowed $250 million through the Bank
of America. He borrowed another $145 million from Fox
Entertainment Group, the entity which sold him the Dodgers, and
gave Fox promissory notes for $80 million more. An anonymous
baseball insider told the Los Angeles Daily News:
"I'd give him three years before he has to sell the
team. He will either realize he can't do it, or he just
won't be able to make payroll."
Do the math: McCourt
borrowed $45 million more than he needed to close the
deal. The balance will be used for working capital. Because
McCourt's debt to Fox is secured by his personal Boston real
estate holdings rather than club assets, under MLB rules it
doesn't count as club debt. That was cold comfort to Dodger
fans, who saw the franchise that made multimillionaires of two
generations of O'Malleys sold to an out-of-towner who started
his tenure with $475 million of debt. Not since Larry Bird led
the Celtics into NBA title showdowns against Magic Johnson's
Lakers has Los Angeles welcomed a Bostonian with such hostility.
McCourt won few friends by appointing his wife Jamie as the
club's vice chairman, then allowing the Dodgers' two top
business executives to leave over "philosophical
differences." Jamie McCourt didn't help matters by
insisting that the Dodgers should be able to draw 4,000,000 fans
Overshadowing anything the McCourts might say,
though, is metropolitan Los Angeles's new-found love affair
with the Anaheim Angels and their new owner, Arte Moreno. When
Moreno bought the Angels from Disney last year for $183.5
million, he paid cash. His first act as owner was to lower beer
prices. Moreno talked to the fans during games, instituted other
customer-friendly changes, and then opened his checkbook wide
during the offseason, signing Vladimir Guerrero and Bartolo Colon
to long-term deals.
More ominously from the Dodgers'
perspective, Moreno has taken dead aim on the Los Angeles market.
This year the Angels have removed "Anaheim" from their
jerseys and have promoted their Orange County-based team
throughout Dodger country. For the first time in the 44-year
history of the franchise, the Angels expect to outdraw the
Dodgers this season.
Who's the better bet for long-term
success in the Los Angeles market: a Boston Irishman who made his
money from construction and parking lots, or MLB's first
Hispanic owner, a gregarious self-made billionaire whose fortune
comes from outdoor advertising?
McCourt has made one shrewd move
so far, hiring Billy Beane protege Paul DePodesta from Oakland to
become the Dodgers' general manager. Like Theo Epstein in his
first year with the Red Sox, DePodesta should be able to improve
his club even while reducing payroll. His ability to do so may
determine whether Frank McCourt can afford to own the Dodgers
through Opening Day 2007.
Copyright © 2004 Doug Pappas. All rights
Originally published in the May 2004 issue of Boston
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