August 28, 2014

A Brief Legal History of the Dodgers

June 28, 2011 by · 1 Comment 

I went to a Dodgers game in 2004. My family and I were visiting San Diego and Disneyland and I decided to take an afternoon off from Mickey Mouse and drive up to Chavez Ravine for a Sunday game. Also, we had rented a pretty cool Mustang at the airport so I thought the drive would be fun. After sitting in traffic for 1 1/2 hours for a 1/2 hour trip to Dodger Stadium, I arrived, game already in progress.

Coming off the freeway you really don’t have any sense that Dodger Stadium is in any kind of a neighborhood, since all you see is the huge parking lot surrounding the stadium. You could have just as easily been at Fed Ex Field except for the palm trees and the San Gabriel Mountains in the distance.

The stadium, at least back then, was well scrubbed, almost Disneyland-like in its cleanliness. But it does look a little dated with its early ’60s architecture. Sort of the Jetsons meet a ’50s suburban drive-in. The Dodgers lost.

On the way out I ended up not taking the freeway but left in the direction of Sunset Blvd which takes you through some rougher areas. But then, historically, Chavez Ravine was a downtrodden area in the late ’50s, ripe for urban renewal. Urban renewal it got with hundreds of families displaced so that O’Malley could build the baseball palace he couldn’t have in Brooklyn.  And to understand where the Dodgers are today you need a little bit of history, including the renewal of Chavez Ravine.

The Dodgers were a losing, but much-beloved National League franchise in Brooklyn in the 1930’s. As WWII came to an end, a lot began to change for the Dodgers. Originally coming in as attorney for the Brooklyn Trust Company Walter O’Malley ended up buying a piece of the Dodgers in 1944. Eventually he muscled out his other partners and owned the team lock, stock and barrel by 1950. Meanwhile on the field, the Dodgers with the help of Branch Rickey as General Manager began to field a good team. They won the pennant in 1947, 1952, 1953, 1955 (along with the World Series) and 1956. They were trailblazers, putting the revered Jackie Robinson on the field in 1947 as the first African-American player and leading MLB in breaking the color barrier.

Despite the forward thinking of O’Malley on the integration of baseball he was much less enamored with the integration of the neighborhoods surrounding their ballpark, tiny Ebbets Field. As more Caucasians moved to the suburbs, Ebbets, with virtually no parking, became less than a great place for the kind of fans O’Malley wanted, upwardly mobile whites with disposable income. O’Malley began to look at ways to build a new stadium at Flatbush and Atlantic Avenue. But in the 1950’s building in New York was controlled by urban planner Robert Moses, who wanted the team relocated to the Queens near La Guardia Airport. The two stubborn men never saw eye to eye and in 1957 O’Malley announced he was pulling up stakes and moving the team to Los Angeles.

It took 5 years after arriving to get the financing, permits, clear out the slums at Chavez Ravine and settle the numerous lawsuits filed against O’Malley by local citizens who thought the city gave away too much. But in 1962 O’Malley’s baseball Taj Mahal opened to rave reviews. Unlike most club owners today, the stadium was wholly owned by the Dodgers with O’Malley having sunk much of his personal fortune into it. His gamble paid off. Always a pitchers park, Dodger Stadium served as a backdrop to some excellent Dodger teams, featuring Sandy Koufax and Don Drysdale. The Dodgers went on to win the World Series in 1959, 1963, 1965, 1981 and 1988.

O’Malley died in 1979. His son Peter took over and provided stable and responsible ownership for the team. However, he chose to sell the team in 1998 to Rupert Murdoch’s Fox Television. As an owner Fox was as reasonably benevolent as any other corporate owners, better than the CBS stewardship of the Yankees. However, by 2004 Fox was ready to sell and in stepped Boston developer Frank McCourt and his wife Jamie.

The story of the McCourt era of the Dodgers begins with a parking lot in Boston. Not just any parking lot, but a mammoth 24-acre parking lot in South Boston valued in excess of $100 million. It plays a major part in the McCourt saga. You see McCourt made his fortune in real estate in Boston, specifically parking lots. In fact, his reputation is so intertwined with parking lots that he is known to Dodger fans as ”the parking lot attendant.” And that is not meant as a loving endearment.

McCourt had been interested in buying a major league team for some time. He angled to buy the hometown Boston Red Sox but didn’t make the cut. But when Fox decided to sell the Dodgers, McCourt raised the necessary money to make the $430 million purchase. The problem with the purchase was that almost all of the money that went into the deal was borrowed. He put up the aforementioned South Boston parking lot valued at $124 million as collateral for a loan from the seller, Fox, and the rest came straight from bank loans. Just like a lot of American families in the 2000’s, big house, no equity.

MLB approved the deal and shouldn’t be too surprised at where they are today, taking over the day to day financial operations of a team that had to borrow just to make the first payroll of the ’11 season. But the story of the McCourts gets weirder and greedier from there.

Shortly after taking over the team, McCourt made his wife Jamie the team President despite her lack of executive experience in baseball operations. He gave each of his two sons salaries of $200,000 and $400,000 each per year for untitled jobs with no specified duties with the team. McCourt pays himself a 5 million dollar a year salary as “team owner.” However, even that does not appear to be enough to support the lavish McCourt lifestyle. According to the LA Times, McCourt has redirected $108 million from team operations to himself. Not only has this drawn the closer inspection of MLB, but also the IRS.

Then, of course, there is the story of ladimir Shpunt, a 71-year-old Russian émigré. Despite his degrees in physics, he was hired as a spiritual adviser for the team and paid $100,000 plus to watch the Dodgers on TV from his apartment in Boston while he sends positive mental vibes to the team to help them win. He did attend one game in person. There appears no record of whether the Dodgers won or lost that game, but it sounds like good work if you can get it.

Of course a lot of families are a little off once you get to know them, but thanks to the McCourts very messy and very public divorce all the above can be read and more in the LA Times. And it’s not over yet. Frank McCourt lost round one in the divorce when the court threw out the couple’s post-nuptial agreement, which gave ownership of the team to Frank. Jamie claims that under California’s community property law the Dodgers are half hers. Frank is suing the law firm that drew up the marital agreement. Jamie claims she needs $400,000 plus a month in spousal support to make ends meets. Frank has tried to negotiate a new television contract for $3 billion with Fox which he says he needs to settle with his wife, various other financial obligations and put a little money back into the team.

Meanwhile, the fan experience at Dodger stadium has turned from grim to tragic. While raising the price for everything, including parking, McCourt cut beer prices, which has since 2004 drastically changed the atmosphere at formally family-friendly Dodger stadium to one of violence and fear. Security has also been cutback. On opening day this year a Giants fan was beaten nearly to death at Dodger Stadium by drunken fans. He remains hospitalized today.

On June 27, 2011 Frank McCourt sought bankruptcy protection for the once proud Dodger franchise. MLB will likely challenge the move in bankruptcy court and it is too early to know how this will eventually end up. Ironically the largest creditor listed by the Dodger bankruptcy filing is Manny Ramirez, who is owed $21 million by McCourt as a somewhat controversial hire several years ago. It is hard to imagine a worse fate for the once proud Dodger franchise but it puts the Dodgers right back to square one when Walter O’Malley first bought an interest in the team as an attorney for the Brooklyn Trust Company.

This was written by Marc Hall who is a defense attorney in Rockville, MD specializing in bad guys in Federal Court. He is a dedicated baseball fan who can write a brief and loves the legal issues that occasionally overwhelm the baseball world.

 

Comments

One Response to “A Brief Legal History of the Dodgers”
  1. Jim Elfers says:

    McCourt’s ownership is beyond farcical. However, I can see it making three good TV movies. The documentary on ESPN, the Made for TV movie on Fox and the sob story from Jamie McCourt’s perspective on Lifetime!

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