Warning to J.P. Morgan Chase, Time Warner, Fox: Help Frank McCourt and feel the wrath of Los Angeles
That multibillion-dollar corporations are cold and calculating is pretty much understood. Yet what they try not to be is plain stupid.
And stupid is out there waiting, perhaps seeming inviting at first blush.
Frank McCourt is drowning in debt, drowning to the tune of $600 million, drowning to the point of declaring bankruptcy.
Now he needs help, needs another $150 million to get by just in the interim, which apparently J.P. Morgan Chase is willing to provide at a hefty 10% interest, plus a $4.5-million fee (deferred, naturally).
Must look like easy money to Chase, but I’d think twice before leading the banking conglomerate down that path.
McCourt is going to ask for a "competitive sale process" to secure a new TV rights deal within the next 180 days.
Time Warner, which is starting a new Los Angeles sports channel based around the Lakers, is expected to bid.
Fox, which still has the current deal through the 2013 season, had previously agreed to a 17-year deal worth a reported $3 billion. That would be the deal Commissioner Bud Selig shot down. Fox also could bid.
But if I were leading either one of those wealthy TV giants, I’d take a quick pass on that process.
Any company that comes to McCourt’s rescue puts itself at financial risk. The people of Los Angeles are genuinely angry McCourt has dragged the Dodgers into the darkest moment in franchise history.
Cold and calculating best not underestimate their rage. They will exact a cost from anyone or thing that attempts to aid McCourt.
Chase could feel a bigger loss than $4.5 million if members start pulling funds and placing them in the local credit union. Time Warner best remember there are satellite companies that can provide the same service. Fox has to understand it is only one of several alternatives.
McCourt thought he had plenty of empty seats at Dodger Stadium before? He hasn’t seen anything yet. Dodger fans are heartbroken and angry and in no mood for anything that perpetuates his ownership.
This is not the moment for a shortsighted business call. No time to be stupid.
-- Steve Dilbeck
Photo: Frank McCourt at a news conference April 8, 2011. Credit: Kevork Djansezian / Getty Images