McCourt Divorce Trial Reveals Dodgers' Massive Debts, Payroll Deductions

by Jon WeinbachFiled under: Dodgers, MLB Biz, Sports Business and MediaLOS ANGELES -- To put it mildly, Wednesday was a downer for the Los Angeles Dodgers.

In a packed courtroom, owner Frank McCourt testified that his vision for the franchise always included "significant" reductions to player payroll, higher ticket prices, and a dramatically smaller baseball operations department. On the field, the team's disappointing season continued with a 5-1 loss to the Philadelphia Phillies in a sparsely-attended game at Dodger Stadium.

And to cap things off, late Wednesday night it was revealed that McCourt's holding company -- which owns the Dodgers, the Stadium and real estate surrounding the ballpark -- has nearly $620 million in outstanding debt, a crushing financial burden that has crippled the team's ability to acquire players or raise capital, according to an investigation by the Los Angeles Times.


The Dodgers' financial woes were contained in documents filed for Frank and Jamie McCourt's high-profile divorce case, which begins its fourth day of trial on Thursday in Los Angeles County Superior Court. The key issue in the case is a marital property agreement signed by the couple in March 2004, just after they purchased the team from News Corp. for about $430 million. Frank believes the MPA makes him the sole owner of the Dodgers. Jamie contends that she never consented to giving up her stake in the franchise, and that Judge Scott Gordon should invalidate the agreement because the couple signed two conflicting versions of the document.

Among the debts cited in the Times report are two loans, first reported by FanHouse in May, that the McCourts obtained to finalize their purchase of the Dodgers. The loans, which never appeared on documents submitted by Frank McCourt to Major League Baseball, were made by Franklin Weigold, a long-time electronic-equipment executive, and Paul and Linda Carter, friends of the McCourts from Massachusetts. The investors are entitled to convert their loans into ownership stakes in the Dodgers if McCourt's holding company misses payments or defaults on the loans. Permalink | Email this | Linking Blogs | Comments

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