McCourts used land surrounding Dodger Stadium as collateral

Joshua Fisher's new site, Dodger Divorce, is quickly becoming indispensable as we head into this fall (and winter, and spring ...) of the McCourt ownership. In a recent post, Fisher details the tower of financing that went into the McCourt purchase of the Dodgers.  Here's a hint of just how messy things are.

... So, if you're counting at home, the above adds up to $421 million in financing ... for a $371 million purchase. That, friends, is a little scary. And there's more. In May 2005, McCourt announced a new, $250 million 25-year note which took out B of A and what remained of the debt to Fox (after the foreclosure on the Boston property). This increased the debt load to $521 million on a $371 million purchase. This financing, known as a private placement, was provided by an unidentified group of institutional investors, such as pension funds and insurance companies. The terms of the loan -- 5.66% fixed for 25 years -- are relatively favorable to McCourt. The collateral for this new loan was reportedly the 300 acres of real estate surrounding Dodger Stadium -- not the club itself. Importantly, one of the provisions of the private placement was that control of the Dodgers would not change hands. ...

Emphasis in bold is mine. It's not new news, but it was something I overlooked when it was first announced, and I imagine a few people today will find it noteworthy.

I suggest you read Fisher's entire post — and take your time. Fisher also added some more thoughts in a more recent post.

... Based on a close look at the McCourts' financial position and the financing mechanisms which allowed them to purchase the Dodgers, I have concluded that the McCourts are not worth close to the $1.2 billion suggested by Jamie in her application for divorce. The Dodgers, as an asset, might be worth $800 million, but given the most recent information available, 58% of the asset's worth is tied up in debt. ...

... Therefore, it is my conclusion that should the Dodgers be regarded as a community asset, each of the McCourts stands to emerge from the divorce with a net worth of something like $225-$300 million, not quite the $800 million Jamie's filing might lead you to believe. If this is indeed the case, it would be extremely difficult for one person to buy out the other's interest in the Dodgers without leveraging the purchase to a considerable degree. If the two decide (or are told) to sell the team to a third party, expect the purchase to be at a discount, damaging their takes even further. ...

* * *

As early as the first inning of Sunday's Game 4, I saw numerous comments across the Internet criticizing the Phillies' decision not to go with Cliff Lee on three days' rest. Even putting aside the fact that we don't know how Lee would have done on short rest – whether he would have performed as well as CC Sabathia or as poorly as A.J. Burnett – the value of that decision is not something that can be determined so quickly. 

In this era, pitching effectively on three days' rest is rare, and you run the risk of diminishing the best weapon on your staff by trying it. If you have a viable fourth starter, using him might well be worth it in the long run, even if there's some short-term damage. I realize the Phillies were in a do-or-die game Sunday, but they knew they needed to win three games no matter what, and they needed to plan for it.

It might not work out for the Phillies in the end, but they might be in as good shape today as they would have been had Lee started Game 4.

* * *

As Tim Brown of Yahoo! Sports reports, Cole Hamels' widely reported comments of self-exasperation did create a clubhouse kerfuffle after all, echoing (if not exactly imitating) the Chad Billingsley-centered strife that entered the Dodgers' postseason clubhouse in 2008.

Does it really take that much intelligence to see Hamels' comments for what they were: the in-the-moment head-banging of a frustrated pitcher, as opposed to deciding they were the confessions of a quitter? (At least journalists are much more civilized.)

In any case, Hamels wants to pitch in Game 7 if there is one for Philadelphia, according to this wire story on ESPN.com.

* * *

I'm not someone who makes a living with physical labor, beyond sitting upright and wiggling some fingers across a keyboard. But having battled a cough (latest diagnosis – bronchitis) for more than two weeks now, let me tell you, it's a strength-sapper. It has definitely affected my performance.

I can only imagine what it's like for those who make their living on the ball field when they have, in addition to the usual aches and pains, something like this. It's the kind of thing that would get dismissed quickly on an injury report, but it's very real.

Comments

[kinbote]

Is Juan Castro available to pinch-blog for Jon?

[dodgerkramer]

Dodgers third-base coach Larry Bowa intimated this week that the Phillies steal signs. Bowa said that’s part of the reason the Yankees have so many mound meetings.

Bowa’s words upset some Phillies, but they shouldn’t. Stealing signs is not illegal, and every team tries to do it. Big deal.

Philadelphia is a good team regardless of whether it steals signs or not — although it certainly would help a player such as Jimmy Rollins if he knew whether Jon Broxton’s 99 mph fastball would be on the outside or inside half of the plate (wink, wink).

[Craig88USC]

Why do I have this feelin' that Pedro
will outpitch Andy at Yankee Stadium...

taking us to a game 7 where Cole gets bombed in the very first inning and

NY wins huge?

[Bluebleeder]

Hope you feel better Jon.

[Jon Weisman]

Actually, that Bowa story is apparently inaccurate.

http://tumblr.com/xb83u506r

[356man]

Gee, overleveraged asset ownership. That's a unique concept in America these days.

[MFC521]

I heard that Bowa story too listening to the Philly broadcast of yesterday's game on my BlackBerry. I was a little puzzled.

By the way, the Newsday article also claims Bowa is a Yankee coach...excellent fact-checking.

[Ken Noe]

So when the house of cards finally collapses, who will be the major bidders for the team?

[Maddz]

Feel better, Jon! Bronchitis is no joke...and you shouldn't play a trumpet if you have it. I learned that the very hard way.

[regfairfield]

The spit valve worked overtime that day?

[Jon Weisman]

New post up top.