Los Angeles Dodgers owner Frank McCourt, right, watches his team play against… (Kelvin Kuo, US Presswire )
The on-field performance of our local teams being what it is, we Southern California sports fans get our drama where we can find it. The current cliffhanger: Will Frank McCourt make the Dodgers' payroll due Wednesday?
Here's betting that somehow the players will get paid. But the looming deadline provides a chance to muster some perspective on the McCourt situation and how it's been handled by Major League Baseball Commissioner Bud Selig.
Selig has effectively seized control of the Dodgers, placing his handpicked executive, former Texas Rangers President J. Thomas Schieffer, in the front office and giving him the authority to veto all but the most trivial financial decisions. The league aims to conclude an investigation of the team's finances by June 22, the date of a divorce hearing on whether McCourt can pursue a television contract with Fox over the objections of his ex-wife, Jamie.
McCourt, who acquired the Dodgers from Fox in 2004, maintains that Selig is scheming to drive him from the league. He notes that although the Dodgers are not the only team experiencing financial difficulties, it's the only team Selig has placed in effective receivership. As my colleague Bill Shaikin reported recently, nine of the 30 teams are in violation of the league's debt limits.
No one has more contempt than I do for the high-living, tax-avoiding McCourts, though I may be tied for first place with about 10 million Dodgers fans. Nevertheless, McCourt has a point.
Selig says he acted in the "best interests of baseball," but that's the sort of slippery concept that always benefits those with the power to define it — in this case, Bud Selig. Canceling the World Series during the 1994 labor dispute? Ending the 2002 All-Star Game with a 7-7 tie? Selling advertising space on the actual bases to the marketers of the movie "Spider-Man 2?" Selig didn't declare any of those decisions counter to the best interests of baseball, because he was involved in each one. He canceled the ad deal in the face of a major furor, but the others will forever stain the stat books.
Notwithstanding the melodrama of the McCourts' divorce and the extent to which the couple has mortgaged the Dodgers' future revenue and lived off the advances, it's a stretch to say they're the most financially troubled owners. That distinction surely belongs to Fred Wilpon, owner of the New York Mets.
Wilpon was one of the biggest investors in Bernie Madoff's Ponzi scheme. Through his real estate firm and other entities, Wilpon and his partner, Saul Katz, invested an "astounding amount of money" with Madoff, according to a lawsuit filed against them by Irving Picard, the bankruptcy trustee overseeing the recovery of money for Madoff's victims. They maintained 483 separate accounts for themselves, their families, friends, employees and others, the lawsuit says.
Picard is seeking close to $1 billion from the Wilpon interests — not only imaginary profits that Wilpon withdrew from his Madoff accounts, but money that he had invested and that was recorded as lost in the fraud. Picard's position is that Wilpon was so deeply involved with Madoff, a personal friend, that he was more than an investor — he and Katz were all but participants in the scheme.
Picard doesn't say that Wilpon knew Madoff was a fraud, but that he was willfully ignorant — so hooked on the consistent investment returns Madoff produced that he spurned warnings from investment experts, even one of his own partners, that the results were too good to be true.
What's worse, Wilpon weaved the Mets — and by extension Major League Baseball — into his Madoff relationship. Over the years, Picard says, he withdrew $94 million from Mets-related Madoff accounts to cover payroll, stadium expenses and other cash needs, money that effectively came from the investments of more innocent victims and that exposes the Mets to Picard's claims.
Wilpon's defense, like so many other investors who should have known better, is that he didn't know. Isn't it amazing to see proud investors line up to eagerly proclaim their stupidity in situations like this?
Selig appears to accept Wilpon's story. The commissioner maintains that the Wilpon and McCourt cases are "far from the same." That may be true; the question is whether the differences include Selig's personal opinions of the two owners.
He acknowledged in an interview last month with ESPN radio, "Fred Wilpon and I have been friends for a long time and I have enormous respect and affection" for him. Ask yourself: If it were McCourt rather than Wilpon who had been ensnared in Madoff's net, would Selig be inclined to brush it off?