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Los Angeles Dodgers owner Frank McCourt. He sold the team, but kept the parking lots, to the tune of $14 million a year.
Now that the Los Angeles Dodgers have been officially sold, for the record-setting price of $2 billion, we can, without emotion, consider the accomplishment of former owner Frank McCourt.
You'd have to seriously consider him for the title of businessman of the year. Seriously.
Why? Because in 2004, McCourt bought the Dodgers for $430 million, using effectively none of his own money. After satisfying the various debts related to the team as it emerged from bankruptcy court into the arms of Magic Johnson's ownership group, Guggenheim Baseball Management (GMB), McCourt should clear something like $1 billion. He had to pay his ex-wife $131 million in their divorce settlement — but the side deal he did for the Dodger Stadium parking lots amounted to $3 billion, split between himself and what has been described as an "entity" associated with the new owners. At $150 million, his half wound up being worth close to $20 million more than Jamie's payout.
Ah, the parking lots. McCourt wisely placed them under the umbrella of ownership completely distinct from the Dodgers. So while the team went into Chapter 11, the parking lots did not. McCourt kept them as a bargaining chip and as a way to stay in the game, continuing to capitalize on the future success of the Dodgers franchise. As Mark Walter, CEO of Guggenheim Partners and GBM's main money guy, phrased it, going forward McCourt has an "economic" interest in the lots — meaning that if they do get developed at some point, he's in.
And even thought GBM will be dropping the parking fee for games to $10 from $15, much of that money will still go to McCourt, who according the the L.A. Times now has a 99-year lease administered to by McCourt and the GBM-affiliated company, worth $14 million annually (at the moment — it will certainly adjust up in the future). So I guess you could say that GBM is paying rent to itself, along with McCourt.
At L.A. Weekly (via the Huffington Post), Gene Maddaus is not happy.
There are two takeaways here. First, McCourt obviously isn't going quietly. Second...Man, does this guy love parking lots or what?
Forget the $5 billion in potential broadcast rights that GBM could secure (and that's the real payoff in the $2-billion purchase deal). I'm not even sure that McCourt was ever really interested in owning a professional baseball team. You could easily understand this entire saga — the move from Boston, where of course McCourt made his initial fortune on...parking lots; the divorce melodrama; the spat with MLB commissioner Bud Selig; the shocking sale to Magic & Co. — as a play for the Dodger Stadium parking lots.
Where one man sees acres of gridded asphalt, baking under a hot California sun, Frank McCourt sees a shimmering Elysium of capitalist opportunity.
He got everything he could have possibly wanted out of this deal. And, it must be pointed out, one thing that he truly loves.
Lots. Glorious, expansive, cash-flow-generating parking lots.