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Dodgers exec Steve Soboroff blasts MLB takeover, defends Frank McCourt

Soboroff says baseball is preventing the Dodgers owner from hiring a security chief and making needed financial moves. "There's a predetermined decision to blow him out of town," Soboroff says of McCourt.

April 21, 2011|By Bill Shaikin
  • MLB Commissioner Bud Selig, left, talks with Dodgers owner Frank McCourt prior to a playoff game between the Dodgers and New York Mets in 2006. Selig's decision to appoint a trustee to oversee the Dodgers' day-to-day operations was labeled as "irresponsible" by Dodgers vice chairman Steve Soboroff on Thursday.
MLB Commissioner Bud Selig, left, talks with Dodgers owner Frank McCourt… (Stephen Dunn / Getty Images )

As Frank McCourt's new right-hand man launched a verbal assault on Commissioner Bud Selig's decision to take over the Dodgers, the battle lines for the likely legal showdown between the Dodgers owner and the commissioner became increasingly clear.

Selig said on Wednesday he would appoint a trustee to oversee the team, an arrangement that Dodgers vice chairman Steve Soboroff blasted as "irresponsible." The trustee is not expected to be announced until next week, but Soboroff wondered aloud how Selig could claim such urgency about the Dodgers' financial situation and yet not have the trustee immediately ready to replace McCourt.

"There's a predetermined campaign to blow him out of town," Soboroff said.

Photos: Frank McCourt's ownership of the Dodgers

The Dodgers tried to make their point on Thursday by telling Selig's office they were prepared to hire a full-time head of security, a position McCourt has left vacant for four months. If McCourt had his usual authority, he could have made a job offer on Thursday. Instead, the Dodgers had to submit the name of the unidentified candidate and wait for league approval.

"Where is the responsibility now? That's not good management, from this perspective," Soboroff said. "In four days, they'll send somebody out to see if they want to hire our security guy?"

The Dodgers were not told whether the league might approve the security chief on Friday or defer any decision until the appointment of the trustee, according to two parties briefed on the matter but not authorized to discuss it publicly.

Selig long ago retained lawyers outside his office to prepare for what league officials have regarded as an almost inevitable lawsuit from McCourt. In a letter to McCourt, vetted by those lawyers, Selig cited "a series of broken promises and broken commitments," according to someone who has seen the letter but is not authorized to comment on it.

"There's a paper trail," the person said.

Soboroff said he hoped McCourt could meet with Selig to discuss the situation but was not sure whether McCourt planned an imminent lawsuit. Selig has refused to meet personally with McCourt; Soboroff said he could not say whether McCourt would promise not to sue if granted a meeting.

Incoming owners sign an agreement not to sue the commissioner, but McCourt would have a chance to prevail by showing that Selig had exercised his power arbitrarily and capriciously, according to legal analysts.

Soboroff played that card Thursday, asking why Selig has assisted the financially troubled owners of the New York Mets while snubbing McCourt.

"How do you single him out when you don't single the Mets out?" Soboroff said.

The Mets received a $25-million loan from Selig's office last fall. Selig met with their owners, who have explored selling a minority share in the team as they face up to $1 billion in liability associated with the Bernie Madoff scandal.

Selig has declined to approve a 20-year, $3-billion television contract with Fox, in which about $375 million could have been paid up front so McCourt could settle his divorce and manage the Dodgers' debts. Selig has indicated he would want McCourt to put all of that money into the team.

"This is like having money in the bank and having somebody hold your ATM card," Soboroff said. "The money is in the bank. The Fox deal is done. These actions are not allowing him to access money. That's a lot different than saying he's got financial problems."

McCourt needed a $30-million loan from Fox to meet the Dodgers' first payroll of the season last week.

Selig said Thursday there were "a lot of differences" between the Dodgers and Mets but declined to elaborate.

In a three-sentence statement late Wednesday, McCourt said the Dodgers were "in compliance" with baseball's "strict financial guidelines."

Although the Dodgers themselves might not have exceeded baseball's debt-to-earnings ratio, McCourt has spun off the stadium and surrounding parking lot into separate entities, with their debts repaid largely from team revenues. In his statement, Selig said he would not only appoint a trustee but would investigate "the operations and finances of the Dodgers and related entities."

According to Forbes, the Mets currently operate in violation of baseball's debt rules.

Even if McCourt and his ex-wife, Jamie, were to agree to sell the Dodgers, they might not do so unless Selig were to take the highest bid, according to a sports industry banker, speaking on condition of anonymity because he might represent potential bidders. The Times reported last year that the Dodgers could sell for $800 million but, after debt and taxes, each of the McCourts might walk away with less than $100 million.

"There would have to be a full and open auction," the banker said. "That may not be something that Major League Baseball wants."

The alternative, the banker said, could be a McCourt lawsuit charging MLB with minimizing the asset value by failing to sell to the high bidder. The McCourt divorce remains in court, and Frank McCourt might yet sue Selig over his takeover of the Dodgers.

"This," the banker said, "is going to be a mess."

bill.shaikin@latimes.com twitter.com/BillShaikin

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