NEW YORK (AP) — The man charged by Major League Baseball with sorting through the finances of the Los Angeles Dodgers is finding a complex jigsaw of companies.As Tom Schieffer traces the money from the baseball team to Frank McCourt, he has found the Dodgers are composed of 26 interlocking entities, just two fewer than all the properties on a Monopoly board.
Trying to crystallize the Dodgers’ bottom line is like trying to capture the shifting borders of the strike zone.
“The complexity of the situation is daunting,” he said Thursday during an interview with The Associated Press at Major League Baseball headquarters. “The way things are structured, sometimes they’re for tax purposes and sometimes they’re for liability purposes, but it does require you to try to follow the dollar through the process, and that takes a little bit of time. And some of the entities are shells that were set up maybe to do something else and that don’t really bear a great deal on it. What you’re trying to do is figure out what is pertinent … and it just takes a little bit of time.”
Time is what McCourt doesn’t appear to have.
Baseball officials believe the Dodgers don’t have enough cash to make their end of May payroll, and baseball Commissioner Bud Selig refused to give a timetable for approving the team’s $3 billion television deal with Fox, which would include an up-front payment of about $300 million. McCourt has claimed Selig is treating him unfairly, and a lawsuit appears possible.
President of the Texas Rangers from 1991-99, Schieffer was ambassador to Australia and Japan under President George W. Bush, his team’s former owner. Now he’s back in the politics of baseball, appointed last month by Selig as monitor of the Dodgers and given the authority to approve any expense of $5,000 or more. Many think that, with Frank fighting his wife Jamie McCourt in the California courts for control of the team, Schieffer’s appointment was the first step toward Selig putting the team up for sale.
He points out that the Dodgers’ complex structure — he says going through the documents “is drinking out of a fire hose” — is not dissimilar to how other clubs are set up. What is unique is the McCourts’ legal tangle: Jaime successfully persuaded a court to invalidate a postnuptial agreement giving Frank McCourt sole ownership of the franchise.
“What we’re trying to figure out is what is the situation with the Dodger organisation, and the California courts will tell us who owns the team. And they are really two separate things,” Schieffer said. “As far as Major League Baseball is concerned, I think that is a secondary issue. The primary issue is what is the condition of the franchise, because that is what impacts the team and impacts the 29 other teams that make up Major League Baseball.”
Frank and Jamie McCourt received about $108 million in loans from Dodgers-related entities from 2004-09 to fund a “Lifestyles of the Rich and Famous” existence. Baseball officials are worried that a front-loaded Fox deal would provide more money that could be removed from the Dodgers and used for non-baseball purposes.
Schieffer, the brother of “Face the Nation” host Bob Schieffer, is circumspect. He doesn’t want to draw any conclusions, since his job is to gather information and allow Selig to make the decisions.
“What we’re looking at is the overall financial health of the club and what is the cause of the serious problems that have obviously developed, and what can we do to prevent them from occurring again in the future,” he said.
Bob Starkey, a former Arthur Andersen accountant who has done extensive work for Selig and the Minnesota Twins, has been added to MLB’s working group on the Dodgers. Starkey appraised the New York Mets when Nelson Doubleday sold his 50 per cent interest to the Wilpon family nine years ago.
Thus far, Schieffer said two to three items a week have been over $5,000 and needed his approval. Even before he got to Los Angeles, checks for $5,000 or more needed the signatures of two people.
“There’s no question there have been some awkward moments,” he said. “I think that all of us at Major League Baseball have demonstrated that this can work and it needn’t be an impediment to the organisation.”
Baseball’s ownership of the Montreal Expos/Washington Nationals from 2002-06 and MLB executive vice president John McHale Jr.’s monitoring of the Texas Rangers before Tom Hicks sold the club last year have served as templates for Schieffer’s task. He points to the Rangers’ acquisition of Cliff Lee last summer as evidence the Dodgers will be allowed to spend as they try to win the World Series for the first time since 1988.
“I told the players that. I told Don Mattingly and Ned Colletti that,” he said of the Dodgers’ manager and general manager. “I’m not sure that Cliff Lee was within the budgetary constraints, but what happened was the club made a series of decisions and then John McHale approved it. And I think we have to be flexible in that regard. The fans have to know that this team is going to be competitive and have a chance to go as far as its talent will take it.”
Schieffer is commuting from his home in Texas to LA, where attendance is averaging 36,672, down 17 per cent from last year. He says MLB will benefit from a winner at Chavez Ravine.
“The interest of Major League Baseball in the success of the Dodgers is exactly the same as the Dodgers’ interest, and that is to be as successful as possible,” he said. “Nothing would suit me better than for the Dodgers to wind up in the World Series with the Rangers.”