FanShot

OT: Dodgers Charging Themselves Rent

16

There are still some people who think that despite the McCourt divorce troubles, the Dodgers as a baseball team will be just fine, they're a cash cow, etc. Well, let's see what they say now. Yes, money comes in. But where does it go? The Dodgers own Dodger Stadium, but they've been charging themselves rent on their own property since 2006. The article details how much, about $14 million a year. However, charging themselves rent isn't quite the same as paying themselves, or more practically, paying the company they set up to accept the rent. They still "owe" themselves $24 million, which is $24M siphoned off team revenue that is sitting someplace but not given to the company created to accept it. Moreover, this $24M is on top of a drop in payroll already totalling $23 million. In other words, they could have afforded to AT LEAST added back the drop in payroll, but have chosen not to do so. Where does that money go when it's paid? Roughly, a third of it goes to Frank McCourt personally. Due to bank loans already made, the banks have limited his personal income,meaning, clauses built into the loan contract state that he can only make so much, they want their money back before he just pockets it and buys another house. So Frank set up this company as an end run around that. Another third goes to debt service, and the rest to "construction managers" for projects that have been on hold since 2008 because they can't get loans to finance it. Other teams charge themselves rent, but not anywhere like this. Some teams that have landlords pay less than a million a year. The strong inference here with the Dodgers is that this is just a sham, another way for the McCourts to suck the team dry for their own personal gain, because they've leveraged everything else to the hilt. They've been embezzling from themselves as a way to still live the high life and pay as little as possible on their huge debt. Within L.A. family law circles, there's been talk that both sides are coming to the realization that if they go to trial at the end of this month, it will be disasterous for both of them personally and for the team. However, neither one so far is willing to budge an inch. The Dodgers as a baseball team are likely to be very screwed.

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