Embattled Los Angeles Dodgers owner Frank McCourt and Major League Baseball reached a settlement late Tuesday for the Dodgers to be sold at auction. The sale is expected to include the team, Dodger Stadium, the surrounding parking lots and media rights. It could all go for a billion dollars or more; McCourt paid $421 million seven years ago.
This ends a term that saw the Dodgers return to the playoffs, but mired in legal troubles capped by filing for bankruptcy protection.
A joint statement said there will be a "court-supervised process" to sell the team and its media rights to maximize value for the Dodgers and McCourt. The Blackstone Group LP will manage the sale.
The announcement comes as the Dodgers and MLB were headed toward a showdown in U.S. Bankruptcy Court in Delaware at the end of the month as mediation between both sides was ongoing.
Tommy Lasorda managed the Dodgers for two decades. More recently he’s advised the team’s owner. KPCC’s Larry Mantle asked Lasorda about whether he had mixed feelings about the sale — and about McCourt.
“Yeah, well he treated me great, but I’m glad that it’s over with," Lasorda said. "And whoever becomes the owner, I sure hope it’s someone local that is familiar with the city and the people and everything.”
ESPN's Molly Knight told KPCC that sportswriters were surprised by the agreement. "He's never given up and he's never gone the rational route." Knight called the deal "quite shocking" and that sportswriters had expected to be heading back to Delaware for more hearings.
McCourt and baseball Commissioner Bud Selig have traded barbs since MLB took control of day-to-day operation of the team in April over concerns about the team's finances and the way it was being run. McCourt apparently realized a sale of the team he vowed never to give up was in his best interest and that of the fans.
McCourt had run out of time, Knight said. "He's been sort of stalling for months now."
McCourt's been "in checkmate" since Major League Baseball Commissioner Bud Selig took over the team, Knight said. After the settlement with his wife last week, McCourt did the math and realized there was no way out, according to Knight.
"There comes a point in time when you say, 'It's time,'" said a person familiar with the situation who requested anonymity because details of the negotiations had not been made public. "He came to that realization at the end of today."
The U.S. Bankruptcy Court will have to approve the auction, but the judge in the case shouldn't be a problem in the sale, Knight said, because judges don't like to step in and set precedent in sticky cases like this.
Many Dodger fans have been anxious for McCourt to sell the team and have even suggested some replacements to lead the L.A. franchise.
Potential buyers include Mark Cuban, owner of the NBA champion Dallas Mavericks, who has previously attempted to buy the Texas Rangers and the Chicago Cubs. "Cuban would be a good owner for Major League Baseball, I firmly believe," Knight said. Traditionally, MLB ownership has functioned like a club, and it generally takes several attempts before someone new can become an owner, according to Knight.
The website MarkCubanSaveTheDodgers.com, created by West Covina website designer Roger Arrieta, was started a in an attempt to persuade McCourt to sell the team to Cuban.
The group plans a "victory rally" at 6 p.m. Wednesday in front of Dodger Stadium's gates.
The L.A. Times reported that Cuban offered to buy the Dodgers several months ago, but balked at entering negotiations when McCourt said the price would be in the range of $1 billion to $1.2 billion.
Steve Sugerman, a spokesman for Frank McCourt, told The Times Frank McCourt "doesn't know Mark Cuban. He hasn't spoken with Mark Cuban. He hasn't had anyone speak with Mark Cuban on his behalf."
The favorite to become the new owner is Dennis Gilbert, Knight said. "He's well liked in baseball circles." Gilbert is a former agent who worked with the White Sox and lives in the L.A. area. He has season tickets to the Dodgers and is sitting behind home plate at almost every game. Gilbert's put an investment group together to purchase the team.
Other prospective Dodgers owners include Ron Burkle, co-owner of the Pittsburgh Penguins NHL team, and former Dodger Steve Garvey, who has an interest in the team but not necessarily the money to purchase it, sportswriter Bill Shaikin from the Los Angeles Times said on the Madeleine Brand Show Wednesday.
Knight said that Selig will likely help the group he favors to achieve the top bid. Whoever the new owner is, Knight said that it's good news for Dodgers fans, as there are many interested buyers, all of whom have more money than McCourt.
"It's a good day, frankly," Knight said.
Another investment group includes Steve Garvey and Orel Hershiser. That group says they have financing, but members of the group didn't want to come forward publicly to seem like they were trying to grab the team out from under McCourt when the team wasn't on the market yet, Knight said. Some members of this group are friends with Frank and Jamie McCourt. Knight said she isn't sure they'll be chosen, but they have put together some capital.
A new owner would be the third since Peter O'Malley sold the team to News Corp. in 1998. The Dodgers had remained in the O'Malley family since Walter O'Malley moved the team from Brooklyn to Los Angeles in 1958.
McCourt filed for bankruptcy protection in June after the league rejected a 17-year TV contract with Fox, reported to be worth up to $3 billion, that he needed to keep the team afloat. Selig noted that almost half of an immediate $385 million payment would have been diverted from the Dodgers to McCourt.
The franchise's demise grew out of Frank McCourt's protracted divorce with Jamie McCourt and the couple's dispute over the ownership of the team. The divorce, which played out in public in court, highlighted decadent spending on mansions and beach homes and using the team like it was their personal credit card. They took out more than $100 million in loans from Dodgers-related businesses for their own use, according to divorce documents.
In bankruptcy filings, attorneys for MLB said McCourt "looted" more than $180 million in revenues from the club for personal use and other business unrelated to the team.
"The Dodgers are in bankruptcy because Mr. McCourt has taken almost $190 million out of the club and has completely alienated the Dodgers' fan base," the baseball attorneys wrote.
Economics professor Andrew Zimbalist, author of "Circling the Bases," told KPCC's Larry Mantle on "AirTalk" that the McCourts had questionable behavior from the beginning.
"Giving [spiritualists] enormous sums of money to give the Dodgers good blessings, they have their sons on the payroll even though one is at Stanford and another is a full-time employee at Goldman Sachs," Zimbalist said. "The team has a lot of momentum. It's not like it took a rocket scientist to get them into the post-season a few times. I'm not sure that [the McCourts] were doing any brilliant maneuvers to make the team successful in its early years."
As the former couple continued to fight over ownership of the team, the Dodgers' home opener against the rival San Francisco Giants kicked off a year of even worse publicity. A Giants fan, Bryan Stow, was nearly beaten to death in the parking lot. Stow's family has sued the Dodgers and his attorney said medical bills could reach $50 million.
In the outpouring of public sympathy, attention focused on cutbacks in security at Dodger stadium and fans turned their animosity toward Frank McCourt. Scores of police were dispatched to patrol the stadium after the attack.
Dodgers attorneys claimed Selig deliberately starved the club of cash and destroyed its reputation in a bid to seize control of the team and force its sale.
"As the commissioner knows and as our legal documents have clearly shown, he approved and praised the structure of the team about which he belatedly complains," the team said in a statement.
Zimbalist said that MLB will be extremely careful with selecting a new owner to take over the Dodgers franchise.
"Owners play a very important symbolic role in representing and promoting their franchise, and if people dislike the owner they don’t want to give him money," Zimbalist said. "One way or another, the Dodgers will have the resources to put a championship club on the field, and that’s what will bring the fans back."
The team was asking Judge Kevin Gross in Delaware to approve an auction of the team's television rights as the best path to exit bankruptcy. But the league wanted to file a reorganization that called for the team to be sold.
Last month, Jamie McCourt cut a deal with her ex-husband to settle their dispute over ownership of the team they bought in 2004 for about $430 million.
The terms of the agreement weren't disclosed publicly, but a person familiar with it who requested anonymity because it's not meant to be public told The Associated Press that Jamie McCourt would receive about $130 million. She also would support the media rights deal worth up to $3 billion.
That removed her from the number of opponents Frank McCourt was facing in bankruptcy court because Jamie McCourt had initially lined up behind MLB and Fox in asking the bankruptcy court to reject Frank McCourt's bid to auction Dodgers television rights.
All the bad publicity appeared to drive fans away. There was a 21 percent drop in home attendance from last season and it was the first time in a non-strike year since 1992 that the Dodgers drew fewer than 3 million people.
But the Dodgers franchise will be quick to bounce back, Shaikin said.
"The Dodgers have had one of the most loyal fan bases in all of professional sports for many, many years," he told KPCC's Madeleine Brand.
The dedicated fans along with new leadership and a few promising player acquisitions could quickly set the team back on course. Just the fact that McCourt is leaving will draw many Dodger fans back to the stadium, Shaikin said.
KPCC's Madeleine Brand contributed to this story
This story has been updated.