Trying to work up a good sporting moral outrage over McCourts' financial plans

The McCourts do make it easy to be distrustful now, don’t they?

After having gone through 632 image makers. After having won consecutive division titles, had a respectable big-market payroll, become active in the community, made numerous stadium improvements … it’s hard to shake the sense that for them, it’s all about greenbacks.

About getting filthy rich. Buying the rest of Malibu. Not only owning the Dodgers, but an NFL team, a soccer club in Beijing, a club in the English Premier League, the Disneyland parking garage, the complete rights to the Beatles’ catalog and at least one small Latin American country.

New revelations keep coming out about their finances via the ongoing divorce proceedings between Frank and Jamie McCourt. Bill Shaikin of The Times continues to be on top of the story, and his latest certainly paints an unsavory picture of the organization’s financial plans.

Shaikin’s newest report said court documents show the Dodgers actually plan to keep their payroll below its 2009 level for the next nine years, all while club revenue could nearly double.

If the actual plan, this would more than verify suspicions, it would justify some good ol’ sporting moral outrage.

Of course, you know what they say about numbers. Particularly numbers used, as in this case, to justify a significant Chinese financial outlay in international investments.

As Mark Twain popularized, there are lies, damned lies and (baseball) statistics. Most would be ecstatic to make financial plans nine months out, let alone nine years. As our economy taught us the past few years, things change.

Even if fairly benign, the document initially does nothing to allay fears the divorce is going to leave the team under new monetary restraints, at least until played out. The document said the Dodgers had a total payroll of $132 million last year, and project a payroll of $107 million this season.

This is a frightening drop-off. Particularly against the McCourts’ current backdrop.

Yet the document was reportedly prepared last May, long before serious marital problems were apparently part of the McCourts’ planning and lawyers suddenly did their talking instead of would-be image makers.

Shaikin reported the Dodgers spent 46% of revenue on player compensation in 2007, their fourth year of ownership. It was down to 42% a year later and club projections call for it to fall to 25% by 2013 and remain at that level for the next five years.

Now, that is some serious planning. If the Chinese buy it, I can find some numbers to make a power hitter out of Juan Pierre.

That would mean an additional 21% of club revenue is going somewhere. For cynics, a 3-0 fastball right down the middle.

Really, the McCourts should have done enough to earn community trust by now. Honest.

Only they arrived from Boston with serious doubts about their piggy bank, and now comes a document that claims an intent to spend about half the amount of club revenue that Commissioner Bud Selig encourages teams to devote to payroll.

People can do interesting things with numbers, which is probably what’s happening here. Still, the McCourts have to know many remain leery of their ultimate aim, and that this latest document will only leave them more scrutinized than ever.

-- Steve Dilbeck

Photo: Frank and Jamie McCourt in 2006. Credit: Lori Shepler / Los Angeles Times

Comments

[janeenus]

He is a PR nightmare.

[Greg]

The McCourts are absolutely horrendous when it comes to PR but at the same time, I read private placement prospectuses all the time and they always make wild and fanciful projections. To say that revenues would double while payroll would hold steady is, to put it kindly, farcical at best. As I said, one has to remember that this nugget was pulled from a document wherein the McCourts were asking for someone to buy 5% of their business and place it in its proper context.

[CA]

The $25 million drop off in payroll that's going into the MCCourts pockets could have bought CC Sabathia last year

[Chuck]

Finally - someone who gets it! They were trying to source $$$ and spin a story. Who would invest in an opportunity that showed lackluster revenue growth and increasing expenses? Sounds like a recipe for disaster. Sports franchises have always shown poor return on investment - do we really think the McCourts have the magic touch to turn our blue into green?

Let them dream big and let us continue to support our team. They got Martin, Bills, Kemp, Ethier and Broxton back...let win it all this year.

[Steve]

The McCourts are absolutely horrendous when it comes to PR but at the same time, I read private placement prospectuses all the time and they always make wild and fanciful projections. To say that revenues would double while payroll would hold steady is, to put it kindly, farcical at best. As I said, one has to remember that this nugget was pulled from a document wherein the McCourts were asking for someone to buy 5% of their business and place it in its proper context.

Posted by: Greg | 02/23/2010 at 10:36 AM
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I agree with you that the number seem farcical, but the basic concept that McCourt wants to reduce payroll and the payroll to income ratio while increasing net profits is not, and seems to be born out generally in the way he's run the team and in some of these other divorce filings. And I really have to wonder about exactly how precarious his financial situation really is after reading that he's already specifically leveraged future ticket proceeds.

[Michael B]

Sure these are just numbers, but the scary thing is that the McCourts are looking at the highest possible revenue or the best case scenario for the tam over the next 8 years, and still their payroll projections keep shrinking. This is ridiculous. I wish Bud Selig would make McCourt sell the Dodgers because that would be the best case scenario for the fans.

[Candy Maldanado]

Okay, payroll will drop from $132 million to $107 million. That's $25 million.

1) $15 million of that drop is Jason Schmidt. No impact on the product on the field.

2) $10 million is Juan Pierre. Now, Juan came in mighty handy last year. But $10 million for a buckup outfielder is beyond ridiculous.

In other words, the drop in salaries is just common sense.

I know the McCourt's are going to to be getting (and earning) a lot of bad PR. But the sky is not falling.

[oldbrooklynfan]

I would hope that Jamie upping here alimony came to late.
She shouldn't be allowed to raise her first request.

[Luis Ayala]

Remember the Dodgers did sign pitcher Luis Ayala to help save the day.

[Mike Sanchez]

Whether or not it is legal, and that remains to be seen, these people have paid no taxes and gutted the franchise. Traded away the best prospects for a couple million here and a couple million there...now it is apparent that it was all for their own life style. The McCourt's are interlopers and despicable and were handed the keys to our team by Bud Selig,who violated all the leagues rules to approve the sale. Listen to Vin Sculley's broadcasts, follow the team, but boycott the stadium. The McCourt's need to go, don't encourage them to stay....

[bob cuomo]

Well, if the Dodgers don't win it all this season (and they probably won't because their starting pitching simply isn't good enough, sorry), it doesn't look too good for the future, does it? I had a bad feeling about those people--the Parking Lot Attendant and the Screaming Meanie--when they took over the club. Of course their divorce is going to result in financial problems. So now they're gonna raise ticket prices while lowering player payroll and pocket the more $$$? Neither of them deserves to own the Dodgers...I say get rid of both of them!

[H Albert]

A word to the McCourts from a life-long Doger fan: SELL!!