Comedian Steven Wright would probably never claim to foresee the future but this musing graphically illustrates the number one problem with our western society and a problem which has become all too apparent in Major League baseball.
Baseball boss Bud Selig continually claims that Major League baseball is in tremendous financial shape while raking in record profits. More Selig smoke and mirrors?
19 teams are apparently over their debt percentage allowance as set down by baseball, (I’m not an economist or a mathematician so I’m loosely quoting several articles) and two of baseballs’ storied franchises are in deep financial trouble.
The ownerships of the New York Mets and the Los Angeles Dodgers are different situations and perhaps call for different solutions. This is my take based on what I have heard and read over the past few months.
The New York Met ownership are in financial trouble and were forced to sell off a minority of the team in order to meet financial obligations in the wake of a lawsuit against them for $1 billion. The lawsuit contends that the Met owners should have noticed that their investments were part of a massive investment scam and are therefore partially responsible for the losses incurred by certain investors victimized by convicted financial advisor Bernie Madof. Major League baseball and the commissioners office couldn’t have foreseen this situation and I believe acted in a responsible manner by demanding that owner Fred Wilpon sell some of his assets to cover his baseball obligations. There seemed to be an implied threat that the choices Mr. Wilpon had were selling all or part of the team, selling off some of his multi million dollar real estate holdings to cover any costs, or allowing MLB to takeover the team. Wilpon reluctantly sold off some of the team to meet his obligations although he retained majority ownership. His friend Bud is happy…for now.
The situation in Los Angeles seems far different and far more unstable. Potential owners are put through a thorough financial and personal evaluation. Except perhaps when they are good friends with the current commissioner, (see Expos, Twins, Red Sox, Nationals-don’t get me started.)
Frank McCourt was allowed to purchase the Dodgers even though he had neither the cash or investments of his own which would allow him to do so. McCourt was allowed, after his purchase, to “borrow” money to support his and his wife’s lavish and extravagant lifestyle (lives of the rich and shameless?) from the team and its various holding companies with little or no protest from the league office. Continually painting the front door while the foundation was cracking and borrowing from Peter to pay Paul allowed the McCourts to project the image that all was well in Dodger land. That is until the McCourts were no more.
Now Bud Selig is deciding to play hardball with the Dodgers and with the recent Chapter 11 filing, the stage is set for a messy and long term battle between McCourt et al and baseball. Selig may not simply be able to takeover the Dodgers and sell it to whomever he deems fit.
Bankruptcy courts may have the final say and the McCourt/Selig divorce may be even messier than the McCourt/McCourt. Jamie McCourt’s contention that 50% of the assets includes 50% of the Dodgers may hold some water.
While we poor working stiffs must scrimp and save for any luxuries and are not allowed to live beyond our means with creditors knocking on our door the second a payment is late, the McCourts and Wilpons of this world are allowed to keep all of their toys no matter if their means don’t justify their ends and no matter how much they owe.
Bud Selig’s implied contention that Major League baseball needs stable and responsible ownership is correct. However, his actions of denial to non friends, (Mark Cuban), and look the other way for his rich friends should not be part of that equation. If you can’t afford the toys you have, sell them or get out of the playground. That rule should apply equally to all the kids in the playground.