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A Lack of Paperwork Delays Dodger Sale

Official says proposed purchase won't come up for vote at Nov. 20 meeting because owners need documents from McCourt.

November 11, 2003|Jason Reid and Ross Newhan | Times Staff Writers

PHOENIX — The proposed purchase of the Dodgers by Boston real estate developer Frank McCourt will not be voted on at a Nov. 20 baseball owners' meeting, and the calendar is becoming a factor in McCourt's bid to buy the club, a high-ranking baseball official said Monday.

News Corp.'s sale of the franchise, which requires ownership approval to be finalized, will not be on the agenda at the meeting in Chicago because McCourt still has not forwarded most of the paperwork that the commissioner's office must review before scheduling a vote.

Although Nov. 20 is not a deadline, the delay has stirred questions within the industry about whether McCourt has the financial resources to complete the proposed $430-million transaction. Some in the commissioner's office are privately expressing concern.

Based on the terms of his agreement in principle with News Corp., McCourt must forward all sale documents to the commissioner's office by Dec. 31, according to sources close to the negotiations. His period of exclusivity to complete the sale ends Jan. 31.

"We think it's still OK, and they keep insisting it's still OK, but we're still owed 99% of the paperwork," the high-ranking official said at the general managers' meetings here. "Is it too late to get it on the Nov. 20 agenda? It's ... too late."

Baseball Commissioner Bud Selig had expressed confidence in the sale, trusting that the investment-banking firm of Allen & Co., which shepherded the deal for News Corp., would not have gone this far with McCourt if it had reservations about his finances.

Selig, also attending the meetings that end Friday, declined to comment on the agenda for the upcoming owners' meeting, and for the first time tempered his remarks when questioned about whether the deal is in trouble.

"I can't speak to that," Selig said. "I haven't seen a lot of the details. We're waiting for a lot of the paperwork."

The commissioner's office had expected the documents, which must first be approved by the ownership committee and executive council, to be submitted last week at the latest. McCourt and News Corp. announced an agreement in principle Oct. 10.

Selig could schedule a conference-call vote in December or put the sale on the agenda for the January owners' meeting, either of which would be fine with McCourt, a source familiar with his efforts to purchase the club said.

"The issue of Nov. 20 is not a major concern to anyone in the McCourt camp," the source said. "You have the highest hopes something like this can be done in six weeks, but if it isn't that doesn't mean it's in jeopardy."

The source, a McCourt ally, pointed to News Corp.'s 1998 prolonged purchase of the Dodgers from the O'Malley family. The difference is that there were no questions about News Corp. having the financial resources to close the deal. Questions persist about McCourt, with two Los Angeles businessmen saying he is having trouble attracting investors.

While people close to McCourt acknowledge he might not be able to assemble an investment group before a vote occurs, they insist he has the resources to fully finance the purchase on his own.

Although the sale price is listed at $430 million, the actual dollar value of the club and its property holdings will be about $330 million once discounts and credits are factored into the accounting.

McCourt and his wife, Jamie, have significant Boston property holdings, which some baseball officials believe might be appraised as high as $400 million, and are partners in a successful real estate development firm.

However, they were not included on Forbes magazine's most recent list of the 400 richest Americans, which required a net worth of at least $600 million. Industry sources also say McCourt was not in position to finance the purchase of the Boston Red Sox or Angels on his own.

The Red Sox sold for $660 million, a price that included the New England Sports Network. Arte Moreno bought the Angels for $183.5 million from the Walt Disney Co.

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The designer steroid THG, which is at the center of the federal investigation into the Bay Area Laboratory Co-Operative (BALCO), was automatically placed on baseball's list of banned substances when the Federal Drug Agency designated it as an illegal drug that cannot be purchased in the U.S.

Rob Manfred, baseball's executive vice president of labor relations, said the FDA designation, under the bargaining agreement with the players' union, put it on the banned list.

Manfred also said that he expects to receive this week the results of baseball's first year of steroid testing. If more than 5% of the tests were positive, every major league player will be subject to unannounced testing over the next three seasons with treatment and discipline part of the program. If less than 5% were positive, testing will be conducted as it was this year, with random tests of all 1,200 players and a second round of random tests for 240 players.

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The Angels and Dodgers could be in a free-agent battle at three positions.

Agent Jeff Moorad said both clubs have expressed interest in former Minnesota Twin outfielder Shannon Stewart, and sources said both have shown interest in Oakland shortstop Miguel Tejada and South Korean first baseman Seung-yup Lee.

Lee, 27, is known as the Lion King in South Korea, having hit more than 300 home runs in his career, 56 with the Samsung Lions last season, breaking Sadaharu Oh's Asian record of 55. Lee played home games in a park where center field was only 384 feet from home plate, the corners 311. He is represented by John Kim of Arn Tellem's Los Angeles-based SFX division.

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