Dodgers despair at paying price for owner's luxury life

The city of Los Angeles is aghast, appalled and disgusted with one of its most revered institutions, the Dodgers baseball team.

True, the Dodgers are having a stinker of a season, but the city sees only extenuating circumstances as the cause. The real problem is with their out-of-town owner, an erstwhile carpark magnate from Boston called Frank McCourt, who has managed in a few short years to run the team's finances into the ground while constructing a life of unabashed luxury for himself and his family.

Multimillion-dollar homes have been bought, refurbished and discarded, the proceeds of the deal which allowed McCourt to buy the Dodgers; family members have been added to the payroll whether or not they work at the stadium; money and debt have been shuffled around a series of shell companies and subsidiaries, while the team - the beefy sportsmen whose job it is to thwack baseballs into the stands so the fans keep buying tickets and beers and hot dogs - have been left almost entirely in the lurch.

Many extraordinary details have spilled out since Frank and his wife Jamie, who served as the team's chief executive, filed for divorce a year-and-a-half ago and began to savage each other like bloodhounds in open court.

One senior team executive characterised Jamie's attitude in court as: "Why have a family business, but to support the family lifestyle?"

If that sounds like a plotline from Arrested Development, the quirky TV comedy about a family of dysfunctional property developers from the LA suburbs, it is only one way in which reality is proving as strange as fiction.

Among the people found to have been on the Dodgers' payroll is a Russian-born psychic whose sole job was to watch games on his television in the Boston suburbs and send out positive vibes so they would win more often. When the Dodgers made the end-of-season playoffs - in 2008 and 2009 - he was promised a six-figure payoff.

The saga has come to a head in the past couple of months as it has become clear the Dodgers no longer have the cash to meet the wages bill. McCourt has been scrounging around for a short-term loan, and the overlords of Major League Baseball have concluded enough is enough.

First, the league appointed a special commissioner to review the team's finances. Then it vetoed a 30-year broadcasting deal McCourt had negotiated with Rupert Murdoch's Fox network - mostly because the McCourts wanted to capitalise on the proposed advance payment and pocket well north of US$100 million ($121 million) for themselves.

Last week, in a high-risk gambit designed to avoid losing the team altogether, McCourt went to bankruptcy court, preferring to let a judge decide the Dodgers' future rather than waiting for the league to throw him out on his ear.

"There are lots of subplots, but the real plot is that McCourt has denuded the team," one of the country's leading sports economists, Andrew Zimbalist, commented. "He has taken assets, he has broken them off, he has used the income from those to finance his extravagant lifestyle, and he now wants to use the income of some of those assets to pay off the divorce. It's too much for baseball."

It's too much, in particular, for Angelenos of a certain age who think of the Dodgers as an improbably gentlemanly organisation in a town of Babylonian fleshpots and entertainment industry debauchery.

That ideal image is almost certainly too rosy - especially to anyone familiar with the sordid history of Dodger Stadium, which crudely supplanted a Mexican working-class neighbourhood in the 1950s and early 1960s.

It is also true that for 30 years or so the Dodgers enjoyed a remarkable degree of continuity under the ownership of the O'Malley family, as well as a steady stream of clean-cut, well-spoken stars and regular success in winning trophies.

The decline came in two stages: first with the purchase of the team by Murdoch's News Corp in 1998. According to Fred Claire, the Dodgers' general manager, who was fired soon after the Murdoch takeover, the focus shifted almost immediately from baseball and the "public trust" he always believed the Dodgers represented, to Murdoch's ambitions to build a regional sports network around the team.

After six years, Fox Sports West was a fixture on the American broadcasting landscape and Murdoch was ready to offload the Dodgers.

McCourt looked like the best of a shabby field of contenders - even though he had sniffed around the Boston Red Sox and other teams and had been turned down because he didn't have the assets or the track record to pass the credibility test.

McCourt borrowed US$150 million from Bank of America, US$75 million from Major League Baseball and US$196 million from Fox, some of which he later swapped for his carpark business. In short, he did not put up a dime of his own money.

"It's been frequently reported that McCourt 'bought the Dodgers on a credit card'," a baseball blogger named Larry Behrendt wrote recently.

"That's only half the story. The other half of the story, the more important half, is that McCourt bought the Dodgers on the Dodgers' credit card."

Essentially, McCourt spun off the most profitable team ventures - the stadium carpark and the ticket office - into separate companies he claimed as his own. These companies then charged the team rent, skimmed much of the profit they generated away from the team coffers, and used the combined revenue as a basis for McCourt to borrow more money.

On top of that, Jamie McCourt pulled in a salary of US$2 million as chief executive, Frank McCourt claimed US$5 million a year, and their two children earned as much as US$600,000 each, even though one was a student at Stanford University and the other a full-time employee of Goldman Sachs.

They had a private jet, private drivers, an entourage of pamperers and four lavish houses - two in the Hollywood Hills and two in Malibu. Frank filed for divorce after accusing his wife of having an affair with her driver, which she denies.

The fans have responded largely with their feet. Attendances have plummeted this season - but also partly because of an ugly incident on opening day when a San Francisco Giants fan was beaten to within an inch of his life in the Dodgers carpark.

The team has no money to buy established players, so there isn't much to watch on the field anyway.

"The fans are more emotional about it than the players," said Jon Weisman, a baseball columnist. "The level of messiness is unbelievable."

And with everything tied up in the bankruptcy court, it is hard to predict when it will end.

"Until Frank no longer has money to pay lawyers," Weisman said sadly. "I'll never assume there isn't another twist coming."

To buy the LA Dodgers, Frank McCourt borrowed:

* $150mUS from Bank of America
* $75mUS from Major League Baseball
* $196mUS from Fox

- Observer