01/29/2004 10:30 PM ET
McCourt purchases Dodgers
Sale approved by owners in Thursday vote
By Barry M. Bloom / MLB.com
|Jamie and Frank McCourt show off their new jerseys at Thursday's press conference. (Jon SooHoo/Dodgers)
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A look back at former Dodgers owners:
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LOS ANGELES -- Frank McCourt's favorite color is now Dodger blue.
Major League Baseball owners unanimously approved the transfer of one of baseball's most cherished franchises from the Fox Entertainment Group to the Boston real estate developer and his wife, Jamie, during a conference call on Thursday. The sale price was $430 million.
To close the deal, the McCourts took a $205 million loan from Fox that is generally tied to assets other than the team. Frank McCourt will be the chairman and Jamie McCourt the vice chairman.
At his initial press conference, McCourt looked at the television cameras, many of them broadcasting live, and spoke eloquently for about 25 minutes directly to Dodger fans.
"Family ownership has returned to the Dodgers," McCourt said. "The era of corporate ownership is over."
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."
The television rights package was negotiated in September and McCourt's purchase of the team depended on it, Busch said, adding that there is no relation between the television deal and Fox's loan.
"They are mutually exclusive and negotiated separately," Busch said.
Fox announced on Oct. 10 that it had reached an agreement with the McCourts to sell the team, Dodger Stadium, the baseball academy in the Dominican Republic and a lease on the team's Vero Beach, Fla., Spring Training complex.
McCourt said he invested in excess of $200 million cash into the $430 million purchase, the most ever paid for a Major League franchise. The Red Sox sold in 2001 to a group headed by John Henry and Tom Werner for $660 million, but the purchase price included 80 percent of the New England Sports Network. The franchise and Fenway Park were valued at about $350 million.
McCourt said he was intent on investing money into the team immediately and turning the Dodgers again into a World Series winner: "I don't have a three-year plan. I want to win this year."
MLB's ownership committee and the executive council, headed by Commissioner Bud Selig, finally cleared the bid on Tuesday, giving it the endorsement it needed for Thursday's approval. Before that, there had been months of negotiations and some restructuring of the initial offer.
"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," Commissioner Bud Selig said. "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."
Under MLB's new debt/equity rule, which is phasing in from 2003 to 2005, a new owner must invest a certain amount of money into the franchise that is not obtained through loans. Additionally, revenue must be sufficient to repay those loans without acquiring any new debt.
To fit under the debt service rule, Fox agreed to give the McCourts a $205 million loan, $40 million of which can be converted into equity in the team at the end of the next three years. As a preferred partner, Fox would be first in line for repayment. McCourt said there is no timetable for selling any portion of it to a third party.
"We're not under any pressure," he said.
Fox said in a release that it has agreed to "remit $50 million during the first two years following the closing of the transaction to reimburse the McCourt group for certain pre-existing commitments." Busch declined to comment about that portion of the complex transaction, which is expected to close within the next few days.
McCourt, whose grandfather was part owner of the Boston Braves, has long been interested in owning a Major League franchise. He led investor groups that made bids for the Boston Red Sox and Anaheim Angels. He is president and chief executive officer of The McCourt Company, a Boston firm primarily involved in real estate development.
Fox bought the Dodgers in 1998 from Peter O'Malley, whose family purchased controlling interest of the team in 1950 when it still played in Brooklyn. The Dodgers moved to Los Angeles after the 1957 season, but Peter's father, the late Walter O'Malley, didn't possess 100 percent interest of the team until 1975.
Under the O'Malleys the Dodgers won all six of their World Series titles -- in 1955, 1959, 1963, 1965, 1981 and 1988. But they haven't won a playoff game since the last game of the 1988 World Series, and haven't been to the postseason since 1996, covering all of Fox's tenure. The team was 509-463 under the stewardship of Fox, which is a division of News Corp.
Last season, the Dodgers were 85-77, finishing in second place, 15 1/2 games behind the San Francisco Giants in the division race and six games behind the NL Wild Card-winning Florida Marlins, who ultimately defeated the Yankees in the World Series. It was the second consecutive season when the Dodgers came down to the wire in the Wild Card race, but to no avail.
The new deal leaves in question the structure of the Dodgers hierarchy and McCourt said it would not take long for him to make some decisions with the opening of Spring Training on Feb. 18.
"It's been 15 years since the Dodgers won and that's too long, so we'll look at every aspect of the organization," McCourt said. "I'll sit down and talk with everybody and give them a chance to make their case to me. But I come in with no pre-conceived notions. We need a singular focus and then creating some fresh ideas."
Bob Daly immediately stepped down as managing partner, president and chief executive officer. Daly has held the dual positions for the last four years after Fox restructured the team's leadership. Fox purchased the team for $311 million and invested an additional $40 million in renovating Dodger Stadium. Fox has been claiming annual losses in excess of $60 million a year.
"It will take awhile to turn this around, it's doable," McCourt said. "We can fix this. Truthfully it will take a few years. It will not happen overnight. Nobody can be proud of losing (that much money) a year."
In that vein, McCourt said he wouldn't reject selling the naming rights of Dodger Stadium as being out of hand.
"I'm not going to dismiss anything," McCourt said. "We need to generate new revenues."
Team president Bob Graziano, general manager Dan Evans and manager Jim Tracy will all find out about their futures in the coming days. Graziano has been with the Dodgers for 18 years, and after a brief period out of baseball when Fox took over the team, has been Dodgers president for the last six years.
Evans took over in 2001, effectively replacing Kevin Malone. Tracy also became the manager that year following Davey Johnson and is 263-223 in his three seasons. Tracy and Evans are both entering the last year of their contracts.
McCourt said the announcement of any personnel changes would be more appropriate for another day, adding that his wife, Jamie, will take a major role in running the team.
"I'll probably do what I do for him now. We've been partners in business for ages," said Jamie McCourt, who is vice president and general counsel for The McCourt Company. "I expect that I'll be involved in policy making, policy execution, problem solving and challenge solving. Much along those lines."
With a new owner in place, the Dodgers will likely look to bolster their offense for the 2004 season.
This past season, the Dodgers were last in the National League with a .243 batting average, last in Majors with 574 runs scored and a .368 slugging percentage, and had 124 homers, tied for last in the Majors with the New York Mets. Since then, they have lost Brian Jordan, Jeremy Burnitz and Fred McGriff to free agency. To compensate, they signed outfielder Bubba Trammell, who missed most of last season with the Yankees because of personal problems, and sent a minor leaguer to Florida for outfielder Juan Encarnacion.
In their other big deal of the offseason, the Dodgers traded Kevin Brown and the remainder of his seven-year, $105 million contract to the Yankees for Jeff Weaver. It was a swap of right-handed starters. Weaver, a Los Angeles native, struggled all last season in New York when he was in and out of the rotation and finished with a 7-9 record and 5.99 earned run average.
McCourt said he would not stand still.
"We need some players. We're going to get them," McCourt said.
Barry M. Bloom is a national reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.