Selig is responsible for McCourt running amok

Seven years ago, when Major League Baseball approved Frank McCourt's purchase of the Los Angeles Dodgers from Fox, commissioner Bud Selig sent out a memo to the other 29 teams. It reads today like a validation of McCourt the man, the businessman and the prospective owner, as complimentary as it is confident. One particular sentence stands out.

"The background investigation for McCourt," the memo said, "revealed no known problems or any other matter that raises a question as to his qualifications or suitability to own a major league club."

The contrast between the memo and the briefing MLB filed Tuesday in a Delaware bankruptcy court, where the fight over the Dodgers' ownership will be settled someday, shows the depths to which the Dodgers have sunk – and to which Selig will go to sink McCourt's claim to the franchise.

Frank and Jamie McCourt pose with Los Angeles Dodgers jerseys upon taking control of the franchise in 2004.

MLB lawyers belittled the same purchase Selig once vetted and approved: "When Mr. McCourt acquired the club in February 2004 for $421 million, he did so with entirely borrowed funds."

Larded with adjectives and instigation – "Mr. McCourt has placed the [Dodgers] in their current, incredible position of not being able to make payroll less than halfway through the regular season," the filing said – it was baseball's rejoinder to McCourt's decision Monday to salvage his ownership of the Dodgers through bankruptcy.

And it cast the spotlight back at Selig, the commissioner who in the last 20 months has seen three franchises – two of them jewels, the other a World Series participant last season – plunge into bankruptcy.

Only now, after he has corrupted, sullied and bled dry the Dodgers, is Frank McCourt unsuitable to own a baseball team. And only last year, once Tom Hicks had overleveraged himself and the Texas Rangers into bankruptcy, was he no longer fit to own a major league club. The Chicago Cubs, casualties of Tribune Company mismanagement, ended up bankrupt in October 2009 and were bought by another massively leveraged owner. This supposed "Golden Age" of baseball Selig so loves to crow about features a lot of empty pots.

The facts are indisputable: An ownership crisis blossomed on Selig's watch, and no matter how his allies try to spin it, ultimately he is responsible for the sport's well-being. The best leaders are visionaries. Selig is paid upward of $20 million a year to know and to envisage. And when he ignored his own sport's rules to force through an owner he now admits bought the entire franchise with borrowed money, he lost any claim to hindsight.

Numerous sources in baseball laud Selig's actions since October 2009, when McCourt's wife, Jamie, filed for divorce and exposed the scheme that saw the couple siphon more than $100 million from the Dodgers' coffers to finance an opulent lifestyle. Between his public reprimands of McCourt and his hard-line stance against the below-market television deal McCourt tried to push through for a quick cash infusion, Selig has played the role of commissioner well since the crisis hatched. His potential seizure of the Dodgers could represent one more power play.

[Related: Dodgers' media rights auction dashed]

Still, if MLB wins in court, it's really no victory; the Dodgers are back where they should've been in the first place, primed to be sold to a capable owner. If the court allows McCourt to use the high-interest, $150 million loan he received this week to keep the team afloat for the rest of the year and grants McCourt's wish to recapitalize with a new media rights deal, he would wrest back control and provide Selig among the darkest marks of his tenure: beaten by a charlatan.

The narrative that has emerged from the Selig camp as the McCourt case spiraled out of control partially absolved the commissioner. Selig allies said News Corp., the parent company of Fox and owner of the Dodgers from 1998 to 2004, was losing money and desperately wanted to sell the team. That part is true. The revisionist history: Frank McCourt was the only one who wanted to buy them.

Malcolm Glazer, the owner of the Tampa Bay Buccaneers and later the Manchester United Football Club, started as the frontrunner before the NFL and MLB rejected his bid. Billionaire real estate developer Alan Casden made an offer. Illegal campaign-money laundering by an executive at his company wrecked his candidacy. The options were limited, and McCourt emerged late in the process despite serious questions about his funding.

[Related: Notable sports bankruptcies]

About two weeks before the sale, Eli Broad, whose reported $3.8 billion net worth was nearly 10 times McCourt's, sent a letter to News Corp. matching McCourt's $430 million bid – and offering nearly all of it in cash. Los Angeles' mayor and locals backed Broad's offer. They feared the carpetbagger whose own hometown paper, the Boston Globe, had this to say about him: "Few in this town have talked the talk more and walked the walk less."

It was too late.

"Bud was consolidating," one high-ranking baseball official said. "He wanted people who wouldn't rock the boat – people who owed him and would serve under his throne."

And he didn't want to cross Rupert Murdoch, the Fox scion who was pushing for McCourt. Ever deferential to TV's whims, Selig supported Murdoch's candidate, rallied support for a unanimous vote of approval on McCourt's ownership and welcomed him to Chavez Ravine.

"Fox, myself and MLB made a horrible mistake in not doing the proper due diligence on Frank McCourt," Bob Daly, the managing partner for the Dodgers under News Corp., told the Los Angeles Times. "I helped get him approved, and for my piece I feel very bad about it. … He has been an embarrassment to this franchise. The sooner he gets the hell out of town, the better off we'll all be as Dodger fans."

McCourt spoke for 30 minutes during his first day in Los Angeles. He talked about bringing "the luster back on the Dodger brand." He promised "performance" and "not platitudes." He also said he put a significant chunk of his own money into the purchase.

Which, of course, was a lie. The only asset McCourt used was a parking lot in Boston as collateral for a loan Fox gave him; when he didn't repay it, Fox seized the property and sold it for around $200 million. MLB looked past its own 60/40 rule – 60 percent of a team's value must be in its asset and only 40 percent in debt – to endorse McCourt.

Commissioner Bud Selig and Dodgers owner Frank McCourt talk before a National League Division Series game at Dodger Stadium in 2006.
(Getty Images)

In the original memo sent to MLB owners, Selig said part of McCourt's ownership was contingent upon his needing to raise an additional $30 million in equity over the next two years through real-estate sales or taken on partners. McCourt did neither, and Selig did nothing.

The lesson: When you make the rules you can ignore them.

After all, McCourt's public image was improving. In his first season, the Dodgers won the NL West. They made the playoffs three more times over the next five years and oversaw a Dodgers renaissance that turned them into a cash cow. Today the Dodgers are worth $800 million, according to Forbes.

More than 50 percent of that is debt, no surprise considering the sport-wide reliance on borrowed cash. Selig's acceptance of leveraged ownership mimicked the country's; money was cheap and easy to get, and baseball's own financial crisis was bubbling under Selig's nose.

The lack of ownership oversight burned him the most. McCourt splintered off the Dodgers into more than a dozen different companies; he spun off two parking lots in 2006, borrowed $60 million against them and kept $48 million for himself, according to court documents. Had his marriage not soured and brought their fleecing of the Dodgers into the divorce proceedings, surely the McCourts would have continued pillaging to this day.

Since Selig took over as commissioner 20 years ago, he has used the sale of teams to shape his ideals. Selig hand-picked owners, delivering John Henry to Boston (good), Jeffrey Loria to Florida (bad) and McCourt to the Dodgers (disastrous). There were more successes (Mark Attanasio and Stuart Sternberg) than failures (Tom Hicks). Well-capitalized owners were offset by those like the Ricketts family, which is still carrying nearly $600 million worth of debt after buying the Cubs in 2009, according to Forbes. The New York Mets, another eminent franchise, needed $200 million from hedge-fund manager David Einhorn to bail out owner Fred Wilpon, whose entanglements with Bernie Madoff threaten his long-term sustainability in baseball.

One MLB source said the league is considering additional oversight of its owners, though such a measure would require the approval of the very owners it looks to keep in check. Selig isn't afraid of invoking his best-interests-of-the-game clause – he did it numerous times in Tuesday's court filing – but to so waylay his constituency would take finesse and consensus-building skills even he might lack.

For now, all Selig can do is fight McCourt. He privately admits remorse, much like he did with steroids, and Selig's tack with MLB's worst owners certainly exceeds that of the NBA, which acts like its beleaguered franchises aren't in trouble.

This isn't about remorse, unfortunately. It's about a problem that keeps cropping up again and again: Selig letting the wrong people into his club.

Perhaps he's just got a soft spot for the underdog. On April 1, 1970, a man walked into bankruptcy court and bought the Seattle Pilots for $10.8 million. He moved them to his hometown of Milwaukee, renamed them the Brewers and reaped the benefit of ownership for the next two decades.

His name: Bud Selig.

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