Explaining Southern California's economy

The Dodgers, the McCourts, Bud Selig, and the dictatorship of Major League Baseball

Mercer 17196

Kevork Djansezian/Getty Images

Frank McCourt has lost control of the Dodgers franchise as Bud Selig and the Major League Baseball association has seized ownership.

It's not clear to me that big-time sports is a business in any meaningful sense of the term. It seems based on economic principles drawn from the pre-capitalist era, when circuses roamed the landscape and people put their faith in shamans. But the way the Dodgers/McCourt psychodrama is playing out here in LA has led me to revise my view. Major League Baseball isn't even charming in some retro-feudal sense. It operates like a backwater banana republic, ruled by the iron hand of a Maximum Leader, Commissioner Bud Selig.

The sports media seem to have accepted this yucky paternalistic arrangement, which is worrisome. Here's Bill Plashcke in the LA Times:

Bud Selig owes us. The baseball commissioner who allowed a seriously underfunded McCourt to take the team from desperate Fox in 2004 owes us a strong and viable owner this time.

Selig will pick the person, believe me. No sports commissioner has a stronger influence over who is allowed entry in his league. Selig will pick this owner like he has picked other owners, but never before has his selection been more important, more mandated, and more tied to his legacy.

Selig owes us. He owes Los Angeles a well-funded, competitive-minded businessperson who understands that the Dodgers are about a family experience, Hollywood entertainment and, most important, winning.

But not, evidently, about the rule of law or trivial matters like property rights. After all that LA has gone through with McCourt and the gutting of a great national baseball franchise, we're going to rely on...the guy who let McCourt buy the team in the first place to pick the Dodgers' savior?!?!

On this one, we should follow the counsel of Steve Forbes, who in 2009 argued that it was time to send Selig "to the showers for good." And Forbes wasn't even complaining about ownership issues — he was perturbed that Selig had turned a blind eye to the steroids scandal.

It would also seem that Selig and the supporters of his less-than-benevolent dictatorship don't care much for the idea that Big Sports ought to function in the same economy as the rest of the country. Everyone seems to hate McCourt and his (possibly) larcenous ways, but in many ways he's simply an expression of an ownership system that replies on one supremely powerful decisionmaker to be...the ultimate decider. 

The Dodgers will now, in all likelihood, be sold out of bankruptcy at auction, assuming that McCourt continues to play ball, surrender perfectly legitimate legal claims, and slither away from the sport in time for Opening Day, 2012. It's not clear to me how this is possible under the current bankruptcy proceeding, which was supposed to allow McCourt to restructure his ownership liabilities. Liquidation is where we're now headed, a move that's usually considered a last, desperate resort — not cause for rejoicing.

In theory, the team would be sold to the highest qualified bidder. But this won't be an auction that anyone who supports free markets would realize. There's a view out there that anybody but McCourt will be OK and will lead the Dodgers into a new Promised Land. But everyone who knows anything about the league thinks that Selig will manage the auction to get the owner he wants.

Maybe Mark Cuban, the owner of the NBA champion Dallas Mavericks and a defeated bidder for the Texas Rangers (who came out of bankruptcy themselves last year) will get the nod from Maximum Bud. Cuban has his problems but is generally regarded as a good owners who would restore the Dodgers to their rightful place of glory. Then again, he may be a little too beloved in the realm of sports fandom for Selig. 

But what difference does it really make? If the bidding on the team starts at $1 billion and Cuban raises his paddle and days "$2 billion," Selig can still give the thumbs down. If Cuban even got that far. A rigged bankruptcy should logically lead to a rigged auction.

In many ways, American professional sports is going through its own version of the financial crisis. The various leagues want to maintain competitive parity, but they also want to ensure that the show remains huge, attracting massive television dollars. This has led to a weird mix of welfare state and command-and-control economics, as super-leagues, tied to the major markets, break off from the old framework. The New York Yankees, for example, have their own cable TV network, as a hedge against too much centralized control of their broadcast prerogatives.

Unfortunately, "Moneyball" is just a nice fable. It isn't the reality of Big Sports.

In this context, the Dodgers are Too Big to Fail — or to be allowed to fall into the wrong hands. The bankruptcy has largely been a sham, with Selig taking control of the endgame rather that McCourt being able to exercise the legal rights of ownership and restructuring. Really, they should have just taken the guy into a room and informed him that he was being kicked out of the club. It would have been a lot more efficient.

Major League Baseball: a national pastime that has become un-American to the core.

Follow Matthew DeBord and the DeBord Report on Twitter.

blog comments powered by Disqus