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Sale Is Put on Owners' Agenda
By Ross Newhan
Times Staff Writer

January 1, 2004

Commissioner Bud Selig has put the issue of Frank McCourt's bid to buy the Dodgers on the agenda for a Jan. 14-15 owners' meeting in Phoenix, a high ranking baseball official said Wednesday.

The official added, however, that it's uncertain whether the proposed purchase by the Boston real estate developer will be put to a vote requiring three-fourths approval of the 30 clubs.

"Most of the clubs, aside from those on the ownership committee, haven't seen the proposed financing yet, and it's the kind of deal that has raised concerns," the official said. "Can they be surmounted? Time will tell."

Selig seldom puts an issue to a vote unless he is certain of the results and seldom puts it on the agenda unless he plans to have a vote.

For McCourt, the clock is ticking.

According to his agreement with News Corp., the Dodgers' current owner, he has until Jan. 31 to complete the purchase or he must pay a penalty and lose his exclusive negotiating rights.

If the $430-million deal is not voted on at the owners' meetings, the baseball official said, Selig could do it in a conference call of the owners before Jan. 31, but "it's likely the ownership committee will have sorted this out, one way or the other, before going to Arizona."

A person familiar with the situation said Wednesday that the ownership committee is expected to forward a report — and possible recommendation — to the full ownership early next week.

Although McCourt and wife Jamie had what sources described as favorable meetings in person and by phone with members of the ownership committee before Christmas, his highly leveraged financing plan has raised lingering concerns. In addition, the person familiar with the situation said there is significant concern because McCourt's own proposal acknowledges he would not be in compliance with baseball's debt servicing rule for several years.

According to two people who have seen the proposal, the McCourts would basically finance the purchase through loans from News Corp. and Bank of America, with other lending institutions also involved.

A person close to the McCourts denied recently that Aramark, one of Dodger Stadium's two concessionaires, is one of the proposed lenders, but sources with knowledge of the situation say McCourt has a sweetheart deal in place by which Aramark would receive the equivalent of preferred equity status in the club while improving the McCourts' cash flow through discounted concessions.

Amid industry speculation that the ownership committee has asked McCourt to restructure the proposal, the high ranking baseball official said, "No, that hasn't happened yet, but he may have to restructure and he may have to put more of his money in the deal."

McCourt is reportedly using his valuable waterfront property in Boston as collateral for the loans, and sources said it would be difficult for him to complete a major restructuring before the Jan. 14-15 meeting. That is only one of many complexities still clouding the proposed purchase.

Many in baseball believe that McCourt has a viable possibility of being approved despite the financing concerns because Selig is intent on helping News Corp., baseball's leading underwriter through its national and regional television contracts.

Said one baseball executive: "I think the ownership committee would have already thrown out the McCourt proposal if any other entity than News Corp. was involved."

http://www.latimes.com/sports/baseball/mlb/dodgers/la-sp-dodgers1jan01,1,463691.story?coll=la-headlines-sports-mlb-dodger

No, they wouldn't stop broadcasting baseball. However, when their contract is up in whatever year it is due, they might prove to be "less than willing" to increase upon the fees they are presently giving to MLB. And that is a big concern to MLB since Fox seems to be the only network out there right now that is willing to splurge on the "silly money" side when it comes to shelling out dinero for sports other than the NFL or the Olympics.

There is also the little matter of Fox owning the local rights to many of the teams in MLB through their Fox Sports regional channels and from those local rights comes more TV money for the individual owners.

So that is all a bit for Bud and his boys to chew on when it comes time to decide whether or not to do something right for the fans of LA (HA!) and vote down a mind-bogglingly bad offer from McCourt or vote McCourt through in order to make Fox happy and protect their own interests/wallets come TV rights renewal time.

>>>> 2. Is baseball so beholden to Fox or does Fox benefit from the deal as well? <<<<

As noted above, baseball is very beholden to Fox based upon Fox's willingness to pony up mad-money for the national network tv rights to MLB and for the money they shell out for the local rights to many teams via the Fox regional channels.

Fox benefits from this because it gives them mass programming to counter ESPN during the spring and summer on the cable side of things. From the national side of things, Fox doesn't benefit until October when they get to use the baseball playoffs as a three week billboard for their ensuing fall prime time lineup.

What's odd in all of this is that MLB on the whole loses out big time from the Fox national rights contract. Ask anyone under the age of 15 if they know what a "Game of the Week" is and they'll give you a clueless look and not know what you're talking about.

Fox's national presentation is a joke. They treat baseball as an afterthought; the red-headed stepchild of their sports programming package. There is no national game on Fox until the All-Star game because of NASCAR, which Fox treats infinitely better than they do MLB. And once there is a "game of the week" telecast, it's only done on a regional level instead of presenting national matchups that matter, especially during the pennant stretch. And good luck getting a Saturday doubleheader out of Fox. It has yet to happen during their entire run with the MLB contract.

So, aside from the monopoly money that Fox throws at Bud and the Boys, I honesty can't see any reason why MBL sticks with Fox. I didn't think anyone could do a worse job than CBS with MLB on a national level, but Fox proved me wrong. Rather odd since they do such a good job with it on the regional, daily coverage level.

>>>> 3. If the McBroke deal doesn't go through, wouldn't Fox just seek a qualified buyer? eventually someone wpuld step up <<<<

No one who is truly "qualified" wants the Dodgers without taking the two local Fox regional channels with them, because that's where all the money in owning the Dodgers lay. McCourt is willing to take the team without the networks, which makes him Fox's lone offer of preference right now. Maybe if there were someone with a wad of cash and burning desire to just "own the Dodgers" and treat them right (sorta what I think Bob Daly or Peter O'Malley would do if they had "real money"), it doesn't look like Fox has any other options.

And as a fan you're just caught in the middle hoping that things turn out for the best.

EvilDodger