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Are the McCourts in danger of becoming owners only the Great Gatsby could love?

Frank It seems like only yesterday I was saying how easily the McCourts made it to distrust them. Oh, yeah. How silly.

It’s a new day, it’s a new dawn, it’s the old McCourts.

The latest exciting tidbit on the inner workings of the Dodgers owners comes courtesy of L.A. Times’ business columnist Michael Hiltzik, and this one’s a doozy.

Hiltzik writes, again through documents filed in their ongoing divorce proceedings, that for the last six years Frank and Jamie McCourt have pocketed $108 million.

And during that time they paid zero in federal and state income taxes.

That’s zero. ZERO. Nada. Less than you and I will pay today alone. Unless, apparently, you happen to be stupidly rich.

Ugh, how many more revelations like these can we really take? If only it were just about baseball.

It’s not, of course, and as Bill Shaikin writes, the reasonably fast May 24 court case to decide which of the McCourts actually owns the team could be postponed to the All-Star break or even to the end of the season.

And then comes the divorce trial. By then, we may all be numb from it all. Or really big Angels fans.

Hiltzik’s column comes a day after Shaikin wrote that court documents showed the McCourts anticipated reducing the amount of club revenue spent on player payroll from 46% in 2007 to 25% by 2013, and maintaining it at that level the next five years. While revenue doubled.

That possibility stung enough, and now comes the news that Joe Taxpayer is subsidizing their luxurious lifestyle. I think that’s what you call it when you own four homes in Malibu and Holmby Hills.

Now apparently nothing they have done to avoid paying taxes is illegal. I’d love to have their accountant, but I’m sure I couldn’t afford him. Their strategy involves taking enormous tax losses from commercial real estate they held before buying the Dodgers, refinancing their assets and other tax things I’ll let Hiltzik explain.

When the McCourts first purchased the Dodgers in 2004, they arrived from Boston armed with critics who were skeptical of their actual assets and accused them of grand manipulation of their financial numbers.

Even as they carried a respectable payroll, improved Dodger Stadium, directed charitable foundations and led the team to consecutive division titles, for many, suspicions of the past lingered.

And now comes this. Shameful stuff, really. Hard to fathom stuff. As F. Scott Fitzgerald told us in "The Great Gatsby," the rich are different than you and me.

Only, these rich people own the Los Angeles Dodgers, and as Frank McCourt has said on more than one occasion, that carries with it a civic responsibility. Like paying your fair share of taxes. Or at least some taxes.

As Hiltzik notes, "People who practice tax avoidance on this scale don't often emerge with their images unsullied." Or without a visit from the tax auditor.

Meanwhile, the Dodgers are in Arizona preparing for a new season. Trust in that.

-- Steve Dilbeck

Photo: Frank McCourt. Credit: Jae C. Hong / Associated Press

Comments () | Archives (18)

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I would only be surprised if they had not found a way to avoid taxes as most other rich people do...

The IRS and other taxing authorities are staffed with may highly intelligent, dedicated professionals that would bristle at the suggestion that playing fast and loose with business income, business debts, and personal luxuries is a game that well-heeled folks can play, any way they wish.

Sooner or later, some smart tax cops are going to impute a millions of dollars of unreported personal income to these folks. For now, the McCourts and their PR flacks can characterize this diversion of corporate assets as "tax free" maneuvers, but this is subject to be challenged, vigorously.

Every day brings new reasons to despise the person or persons who own the Dodgers. They're too rich to pay taxes, so we get to pay a surcharge to see a game on Friday or Saturday. Oh, and we have to be able to afford a 13-game package if we want to see the series against the Yankees. As long as these "people" own the team, I'll continue to have lunch or dinner outside the park, bring my own peanuts and water to games and do everything I can to prevent giving them a cent I don't absolutely have to.

My wife looked at me with astonishment. "How can you get so worked up over what a teenage quarterback does on a Saturday afternoon?" she asked, as we sat in our quite expensive booster club seats at the Coliseum.

Wrong about many things, she was on her game, that day. After that, I never quite felt as ego-involved in the W-L record of the team, it's trophies, rivalries, etc.

Now, MLB is quickly ratcheting down in importance. The McCourts, those upright taxpaying citizens, want to sell a significant chunk of the American Pastime to China.

The game is mostly about salaries, profits, drugs, true confessions, and tabloid headlines.

Maintaining the illusion that there is some sort of purity to the sport, an elegance, and a timeless quality, is becoming more difficult by the day.

TJ Simers reports that the McCourts believe fan demand is inelastic. We'll keep buying, no matter how the product is diluted.

The airlines felt the same way.

"And then comes the divorce trial. By then, we may all be numb from it all. Or really big Angels fans."

I'd rather be a Pittsburgh Pirates fan then a bandwagon Angel fan.

Amazing...simply amazing. And we're supposed to trust and respect these people because they (well, one of them) own the Dodgers and should be doing all they can to be build a World Series winner? The Dodgers used to be one of the best franchises in sports...not now, sorry. As I said in a previous post, I had a bad feeling about them when they first took over the club.

The quote of Scott Fitzgerald is incorrect in grammar and attribution to The Great Gatsby. The actual quote is from his short story "The Rich Boy" and reads: "Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft, where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand." That doesn't quite apply to Mr. and Mrs. Parking Lot Attendant.

This is "just" the result of 3 decades of corporate government. The top 1% own the Congress, as employees, which is what those campaign donations are, salaries. The candidate with the most donations invariably wins. The political parties agree in concert that their candidates will reflect the system that chose them. These employee/candidates are then presented to the voters as their "choices". Their employers cumulatively do not lose. Their employee-Congresses get to set their own bonuses, which they call salaries, in the way their employers who run Wall St do.

Punch line: The employees set the tax rates for their employers. You know you are not the employer of the Congress assigned to you if you pay taxes. Correction: You should know this, but you don't. The only ones who do are the ones who set the entire system up, including the fact that you, too, work for them, if not directly, by paying all those taxes they don't which also end up in their pockets as corporate welfare, government bailouts and everyday payouts to them. It's the Amerikan Way.

Frank McCourt has tapped into this system by leverage-buying the cash cow that is the Dodgers. But unlike the rest of his class of employers, he has been exposed to his customers. Without the cash pouring into his untaxed coffers, arising from the awareness of his plans of increasing profits to the detriment of results on the field, he may, can, be forced into trading the team for another occupation elsewhere.

Christian: Thanks for the correction on the Gatsby quote. Also saw it mistakenly attributed to a conversation Fitzgerald supposedly had with Hemingway. Running down ``The Rich Boy, you are indeed correct. Perhaps a common mistake, but appreciate now being in the know.

Hiltzik does not seem to grok the difference between "did not pay taxes in 2009" and "will not pay taxes, ever". Please see the excellent Joshua Fisher's explanation of how this apparently legal mechanism to defer taxes works.

It's embarrassing for the Times to see someone get this matter so painfully wrong, especially the paper's alleged business columnist. He appears to be the business section's answer to Bill Plaschke.

Walter O'Malley and Branch Rickey must be turning over in their graves.

And Peter? Where have you gone?

I'd love it if the club ended up in receivership and some serious fan of the game could swoop in and rescue the team.

I've had enough of the McCourts, their inflated views of themselves, and their lack of real respect for the history of the Dodgers.

I'd love it if they just moved to Mars and stunk it up there.

A Dodger fan my entire life, I attended my last Dodger Stadium game in 2006, the year I became an Angel's season ticket holder. I see the Dodgers in Anaheim and San Diego now. Ever since buying the team the McCourts have made seeing a Game at Chavez Ravince totally unbearable for all but the monied set; they have no clue how uncomfortable the experience can be for the average fan. My hope for the team is that the McCourts destroy each other, lose their shirts, are forced to sell the team, and LA can find an owner as wonderful as Arte Moreno. Now there's a class act who knows how to make a day at the ballpark a wonderful experience for all. I have very inexpensive seats and I see Arte a lot. He's out with the fans, seeing what works, keeping things affordable and still maintains a championship roster.IRS please take the McCourts away!!!

This franchise is joke (I mean more than ever).
maybe next they'll change the name to,
The Brooklyn Dodgers of Los Angeles ...
or some such nonsense?

Where is this guy who says so what that the Dodgers have not won or been in a World Series since 1988? Some of us do care what! Some of us, only the dumb ones like me, will not buy one ticket while these two {Frank & Jamie} own this team. But the guy I mentioned can go right on saying so what and who cares while he defends these charlatans. Frank and Jamie need you to step up and defend all the millions they made at our expense!

I think the question is, Are Frank and Jamie rich together or are they rich separately? That is to say are they both rich?

Oh dear - what on earth could they have spent all of the money on? Basically they have been doing what everyone else who is not too bright has done --- levereged everything by pulling out equity when real estate prices were high ----
Eventually they will pay taxes - or go broke being caught buying on the high peak of the market. Net worths are reset everyday -
We just want our DODGERS to be a great sports team, not a piggybank for such spoiled and entitled "out of towners" -

Don't worry about the tax writeoffs of the McCourts' at fancy restaurants, hotels, clothiers, makeup artists etc...It is about to end thanks to Jamie McCourt's attorney's effort to publicly shake Frank down for a few more bucks before the judge decides that their ownership paperwork is so convoluted that neither one can prove their case so the team is put up for a court-ordered sale (I can dream anyway right?) think Frank will lower beer prices while he lowers the players' salaries)...I wonder if the other MLB team owners will appreciate the attention that will be brought on them due to Jamie's attorneys disclosing how Dodgers do business-...Instant karma says that greed and avarice destroy all who lack humility and the McCourt family's business success will lead to the destruction of the family and the family business due to their personal greed...Can't wait-maybe public citizens can buy the team and operate it like the Green Bay Packers...

This isn't just happening with the Mccourts, but with many of the rich. Living lavishly, paying little in taxes, while the Middle-Class becomes the new poor. Our country's politicians have become so corrupt the nation suffers. We're making the same mistakes Rome made.


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