I’m talking about Frank McCourt, who could also be rightly named Frank McDeposition, Frank McPostNuptial or Frank the parking lot attendant. This guy can stumble into business deals, drive them into bankruptcy, and trip over another billion dollars that somehow turns up in his wallet. He and his ex-wife, Jamie, have provided more newsprint for the LA Times than the combined stories of OJ, Rodney King and the current super-star, Yasiel Puig. His/their story is amazing.
He started out with some family money. His granddad owned a part of the old Boston Braves baseball team. (I got to see Warren Spahn pitch for the Braves). Owning a baseball team became an obsession with Frank McCourt. First he needed to make a lot of money.
He bought a chunk of ground (24 acres) in Boston from the bankrupt Penn Central railroad. He turned it into a parking lot, a very lucrative parking lot. After failing in bids for the Boston Red Sox, Anaheim Angels and Tampa Bay Bucs football team, he bought the Dodgers in 2004 from Rupert Murdoch’s’ News Corps–Just a mere $430 million. Frank had no cash, but financed the whole deal on debt with his parking lot as collateral. He installed his wife, Jamie, as the CEO of the Dodgers. He fired most of the management team and his new group made some of the most bone-headed trades ever. Frank couldn’t even pay the interest on the debt and tried raising prices for tickets, concessions, and parking every year. He had to borrow money from Fox to pay players’ salaries for two months.
However, the value of the Dodgers by 2010 had increased to over $700 million and he didn’t want Jamie getting any of that in a settlement. The judge threw out the “post-nuptial” agreement that Frank said they had, and Jamie said she wanted ownership (or at least half). They agreed on a huge settlement contingent on accepting a 17 year television deal for the Dodgers from Fox. Major League Baseball, however, didn’t agree. They (MLB) knew the team finances were in the toilet and they took over the team at the start of the 2011 season. In June the Dodgers filed for bankruptcy protection. In October, 2011, the McCourts settled their divorce. It was the costliest divorce in California history. Jamie McCourt got $131 million.
Frank got MLB to let him sell the team. He sold it to Magic Johnson and the Guggenheim Partnership group for $2 billion. No team had ever been sold for even ONE billion before. After subtracting $412 million in debts and $460 million in taxes, Fran McCourt turned a net profit of $1.278 billion. The company he sold the Dodgers to also agreed to invest $650 million in a real estate development fund that is run by Frank McCourt AND an annual management fee paid to him starting at $5.5 million. Frank also gets $7 million per year from fees the Dodgers pay to lease the stadium parking lots. He also has the rights to sell his part of the parking lots to Guggenheim for $150 million.
Jamie McCourt said…..”Whoa, that’s not fair, I want a piece of that huge pie.”
Yesterday, the judge said, “Sorry, you should have known what the team was worth. Take your $131 million and shut up.”
My question is: How do you file for bankruptcy one year and walk away with a billion and a half the next year? Dumb luck or weasel smart?