Los Angeles Dodgers owner Frank McCourt and MLB reached a deal on Tuesday that would have the owner sell the team after owning it for 7 years.
McCourt has agreed to a court supervised sale of the team after taking the historic Dodger team into Chapter 11 bankruptcy protection 4 months ago.
Before declaring bankruptcy, MLB rejected McCourt’s proposed 17-year, $2.7 billion TV deal with Fox because according to MLB, McCourt planned to use about $150 million from the deal for personal reasons. In part, the money would have gone to settling his divorce with wife Jamie McCourt (which is now settled) and to pay off outstanding debts.
The list of creditors in the filing include former Dodger Manny Ramirez (owed $20,992,086), Andrew Jones (owed $11,075,000), Matt Kemp (owed $216,944) and Vince Scully (owed $152,778).
The TV deal by itself wasn't the problem. MLB rejected the TV deal because it was part of a larger pattern whereby McCourt was using the Dodgers to subsidize his lavish lifestyle.
According to MLB Court documents, McCourt “looted” $189 million from the Dodgers for his own personal use.
Purchase of the Dodgers
Some reports have it that McCourt effectively purchased the Dodgers for between $355 million and $371 million in exchange for parking lots and about $300 million of debt. It appears possible that McCourt may not have put one dime of his own into this purchase. As well, McCourt did not himself borrow the money used for the purchase - he got the Dodgers to do it for him.
This is why we hear that McCourt bought the Dodgers on a credit card.
What Did the Dodgers Buy for the McCourts?
So back to the Dodgers funding the McCourt’s lavish lifestyle. According to various reports, here’s where some of the Dodger green went:
1) As Dodger CEO, wife Jamie McCourt was paid $2 million a year, while Frank was paid $5 million annually. Here’s where it gets a bit odd. Their 2 kids were each paid $600,000.00 a year. The thing, though, is that one child was attending Stanford, while the other worked full time at Goldman Sachs.
2) After the purchase of the Dodgers, the McCourts bought 4 homes in Los Angeles at cost of around $89 million.
3) They also bought vacation properties and a private jet, had private drivers, a hairdresser who worked exclusively for the McCourts five days a week and a makeup artist.
4) Jamie paid over $100,000.00 to florists.
5) Frank fired his wife as Dodgers’ CEO, claiming that she was having an affair with her driver. However, that didn’t put a damper on spending. Frank spent $30,000.00 a month on a suite at the Beverly Hills hotel.
6) Jamie used one of the homes “exclusively for swimming” and the second to store furniture.
7) Jamie went on a lavish trip to France with her driver.
All this was paid for by the Dodgers.
Looks like the team will be headed in a new direction once it's sold. And it looks like the makeup artist will need to find a new gig.