Major League Baseball Will Run Dodgers

Major League Baseball is taking control of the Los Angeles Dodgers, a once-solid team that is paralyzed by the extremely messy divorce of its owners. As points out, the Dodgers "have been consumed by infighting since Jamie McCourt filed for divorce after 30 years of marriage in October 2009, one week after her husband fired her as the team's chief executive." Husband Frank McCourt accused her of a sexual liaison with her bodyguard-driver, as well as doing a poor job as the team's chief executive. As the divorce proceedings got uglier and uglier, the Dodgers made headlines around the world that they had never made as a team, although it is one of baseball's storied franchises. Fortunately for San Diego, one-time Padres majority owner John Moores's divorce may have been messy, but was kept relatively quiet, and the ownership quasi-transfer (Moores still plays a role in the team) was less disorderly.

Major League Baseball Commissioner Bud Selig told Frank McCourt today (April 20) that he will appoint a trustee to oversee all aspects of the business. Frank McCourt, meanwhile is preparing to sue the league. (That guy must love a court fight, despite his bloody nose, bruises and contusions from his current spousal donnybrook.) According to sources close to the situation, Selig may force a sale of the team. ESPN says that baseball officials can't recall a similar instance. When the owner of the Texas Rangers got into deep financial trouble last year, the commissioner appointed an executive to monitor the team, but left the owner in charge until he sold it. The team went on to win the American League pennant. When George Steinbrenner was suspended from the Yankees in 1990 and Marge Schott was forced to sell her controlling interest in the Cincinnati Reds in 1999, the commissioner's office permitted the owners to choose their successors.


Don, you wrote:

"Fortunately for San Diego, one-time Padres majority owner John Moores's divorce may have been messy, but was kept relatively quiet...."

I don't agree.

San Diego would be far better informed today if we had all been privy to the details of John Moores finances. We would have all seen the proof that his "wealth" was stolen from us.

Unfortunately, it was all kept hush-hush. Everyone got paid off, it seems, except the taxpayers whose representatives John Moores bribed to enrich himself.

Had we seen this information, perhaps the pitchforks and torches would be out now, and everyone in town would be demanding that John Moores be prosecuted criminally, and sued civilly, so we might have a chance of getting that money back.

As it is, the whole mess seems destined to be forgotten, and only the unions (who connived with Moores in the ripoff) will be "punished" for the ballpork district scam. The most culpable, like Jack McGrory and the CCDC crew, have been most rewarded.

So it's sad that San Diego didn't find out what was behind the Moores divorce settlement. We've missed an opportunity to educate the public on how the wealthy and powerful use the props of philanthropy and sports franchises to steal from us all.

You are right, Fred, and I am wrong. Actually, this was a simple mistake. I intended to say Fortunately for San Diego Padres fans... I did not and I take the blame. Yes, Moores's divorce should have been made public and his finances should definitely have been revealed. It has been estimated that he took $800 million to almost $1 billion out of the ballpark district deal by getting land at early 1990s prices and peddling it to condo builders at far higher prices. (He denies he raked in that much.) We know he dumped $487 million of Peregrine stock during the fraud period; he had been chairman of the company. During his entire period with the company, he dumped more than $600 million of stock; he had paid almost nothing for it. In one civil case after another, judges wouldn't let lawyers introduce such facts. Except for paying part of a $55 million settlement, Moores got away with it. San Diego deserves to know more details of the divorce. However, this is San Diego.... Best, Don Bauder

I too question MLB's legal autority to unilaterally take control of a person's business-the Dodgers.

I highly doubt MLB can FORCE a sale of the Dodgers, personal private property of McCourt. Although I have no idea what the ownership agreements are with the teams, I don't think they can force a sale or appoint sa trustee unilaterally-it is a clear violation of due process rights.

It is a franchise, and as such, isn't subject to the same "private ownership" laws as, say, Surfpuppy Hardware, Inc. They can, and previously have forced sales of teams (most recently George Steinbrenner's Yankees and Marge Schott's Reds) for far less shenanigans than the McCourt's have allegedly participated in. And keep in mind that MLB recently threatened to take control of Texas Rangers baseball operations if suitable ownership could not be found.

refriedgringo, MLB actually did have control of the Rangers in a manner of speaking. Selig took the team out of the hands of the owner who had defaulted on bank loans and was out of compliance with baseball’s debt rule. Then mlb lent the team about $40 million and helped broker the deal with Nolan Ryan's group. And don't forget about mlb taking over the ownership the Expos about 10 yrs ago. They even put Frank Robinson in place as the manager.

"Expos Baseball, LP" was the ownership group that bought the Expos from Loria. They were the combination of all of the owners of teams in MLB. So far as the Rangers, I believe Selig was granted that power by vote of the other owners as well. But essentially, yes, you are correct, although unlike with the Expos, MLB didn't replace the Rangers front office and field management. They had to do that with the Expos because Loria took everything and everyone with him after he bought the Marlins.

As mentioned above, the Expos are another case in point. Under MLB rules, the commissioner can step in under certain circumstances. However, Frank McCourt can probably put forward persuasive evidence to make his case. Best, Don Bauder

Another case is the former Montreal Expos, which the league took over and moved to Washington DC -- also wangling a stadium deal that was one of the smelliest of all. Best, Don Bauder

"Another case is the former Montreal Expos"

As I mentioned above. The Montreal case was different than the Dodgers, though and one could say even shadier.In that case, MBL actually bought the team from the previous owner in order to help the owner of a third team. The Expos owner was some guy who was a NYC art dealer who wanted to be a baseball team owner. He bought a % of the Expos and ended up with about 90% interest. When Montreal wouldn't acquiesce to his demand for a new publicly funded stadium, )where have we heard this before),he got pissed. Around the same time, the other owners voted for the contraction of the Expos and Twins, but Jesse Ventura managed to get the courts to issue an injuction against it. Long story short, MLB formed a partnership between the 29 other teams, bought the Expos, the Expos owner used that money to buy the Florida Marlins from their owner, who used that money, along with a $40 million "loan" to buy the Red Sox. The Expos ended up as the Nationals, and when MLB finally sold the team, it was for about $350 million more than they paid for it. It's nice to be in the game when you're the one makeing all the rules.

same "private ownership" laws as, say, Surfpuppy Hardware, Inc.

Yeah, I have no idea how the ownership structure is set up. I did not know it was set as similar to a franchise system, since these pro sports teams, most of them anyway, go back close to a century- or more in some cases.

I also did not know Steinbrenner, or his heirs, were forced to sell the Yankess. I just don't follow this stuff. I find it odd that Steinbrenner could own the Yankees at all under what looks to be very stringent MLB ownership rules given his felony conviction/s.

refriedgringo, Selig did use his "power" to force Marge Schott, but he wasn't able/didn't try to make her sell the team outright. She retained about a minority ownership of the team, about 1/13, I believe. I'm not familiar with the forced sale of Yankess to which you refer. Technically, Steinbrenner hasn't"owned" the yankess for over 10 yrs or so. They are "owned" by Yankee Global Enterprises LLC, which of course has always been controlled by the Steinbrenners. I believe that Steinbrenner named his sons as co-chairmen of the company a couple of years prior to his death. Steinbrenner was banned from baseball for 2 yrs by Bouie Kuhn after he pled guilty to making illegal contributions to Nixon's re-election campaign, and to a felony charge of obstruction of justice. And Faye Vincent banned him permanently, then reinstated him a couple of years later, from day-to-day management, but not ownership, over the Dave Winfield affair. But as far as I can recall, Steinbrenner owned the the team from the time he and his original partners first bought it until he gave control of Yankee Global to his sons. If I am missing something, please elaborate.

surfpuppy619, It falls under the “best interest of baseball” clause from the league constitution, under Article II, Section 3 of the commissioner's powers: In the case of conduct by Major League Clubs, owners, officers, employees or players that is deemed by the Commissioner not to be in the best interests of Baseball, punitive action by the Commissioner for each offense may include any one or more of the following: (a) a reprimand; (b) deprivation of a Major League Club of representation in Major League Meetings; (c) suspension or removal of any owner, officer or employee of a Major League Club; (d) temporary or permanent ineligibility of a player; (e) a fine, not to exceed $2,000,000 in the case of a Major League Club, not to exceed $500,000 in the case of an owner, officer or employee, and in an amount consistent with the then-current Basic Agreement with the Major League Baseball Players Association, in the case of a player; (f) loss of the benefit of any or all of the Major League Rules, including but not limited to the denial or transfer of player selection rights provided by Major League Rules 4 and 5; and (g) such other actions as the Commissioner may deem appropriate. Selig has tremendous latitude under the best interest" clause. McCourt is saying he is going to file a lawsuit challenging baseball's decision to take control of the Dodgers, but he doesn't have a prayer of winning.

The question isn't whether he has a prayer of winning the suit. The question is whether he can afford to take on another suit. Best, Don Bauder

In the case of conduct by Major League Clubs, owners, officers, employees or players that is deemed by the Commissioner not to be in the best interests of Baseball, punitive action by the Commissioner for each offense may include any one or more of the following:

The problem with this clause is it may not be valid. The term "deemed by the Commissioner not to be in the best interests of Baseball" could be open to being struck down as unconstitutionally vague, ambiguous and overly broad-IMO.

I read the statement McCourt put out yesterday-and it essentially said the Dodgers were taken over by the Commissioner because of financial violations. Debt problems. McCourt disagrees. Now that is easy to determine because I am sure there is some sort of debt/coverage ratio that is black and white. McCourt says he meets the ratio-whatever it is. If that is true then the question becomes one of whether the above "best interests" clause is constitutional.

Selig has tremendous latitude under the best interest" clause.

Has it ever been tested in court???? If I was an owner and I met the debt rules, and I wanted to keep the team I would test it.

As I stated above, that clause and the "tremendous latitute" of it may render it uncosntitutional.

Don is correct though, McCourt would get taken to the wood shed if he hired a blue chip law firm to argue the point. The issue is very simple, yet the very business model today of blue chip law firms is their hourly billing and to extract the highest amount of money possible, not to bill on the complexity of the issue.

After losing to Major League Baseball in court, he could sue his law firm. Maybe that's why his name is McCourt. Best, Don Bauder

I think he actually did sue his divorce lawyer.

How does he keep getting lawyers to represent him? Best, Don Bauder

surfpuppy619, I'm not a lawyer, but I'll offer a couple of thoughts. It is a franchise system, that's why they call them franchises. The details would take up many pages because of all the different league variations, but basically the NL formed in the late 1870's and the AL in 1901. Each league had it's charter francises that all paid a fee to join; I read somewhere one that for the NL it was $10 which would be around a couple hundred bucks today, inflation adjusted. As teams have been added, new owners have paid a "franchise" fee. Remember, as franchises they are engaging in local commerce, not interstate commerce, hence the exemption from antitrust laws. As for the commish, well he is the CEO of MLB He and the Executive Council work together on changes/additions to the rules, regs, contitution etc. When they have their minimum of 4 annual meetings they vote on changes. To change the constitution requirea a simple majority vote and the constitution has to be renewed on a periodic basis. the current one was approved in 2005 and runs thru the 2012 season. Basically, the owners voted Selig in and they can get rid of him if they want to. The owners voted on the commisioners powers and could change them if a simple majority wanted to. Any owner who comes in the league knows what the rules are and it could be said that by knowing the rules and owning a team, they agree to play by the rules.If they don't like them, they are free to try and get a majority to agree to change, or they can sell their tean and get out. They are there by choice. The only challange I have ever heard was by the former partners of the Montreal owner and it went nowhere. As I said, I'm not a lawyer, but I doubt any court would every deem the commisioners clause unconstitutional. It was put in place by the owners, for the owners the owners can change it and anyone coming into ownership knows it's there. Put simply, them's the rules, if ya don't like 'em don't join.

The only challange I have ever heard was by the former partners of the Montreal owner and it went nowhere. As I said, I'm not a lawyer, but I doubt any court would every deem the commisioners clause unconstitutional. It was put in place by the owners, for the owners the owners can change it and anyone coming into ownership knows it's there. ====================== Pete Rozelle said the same thing to Al Davis when he wanted to ,ove the Raiders to LA, the NFL teams needed either a 2/3's or 3/4's majority vote to move-don't recall what the % was. Davis said he didn't. Rozelle said those are the rules. Davis sued. Davis won.

Howard Coselle, who was a lawyer, said the clause would have stuck if they just used a SIMPLE MAJORITY, instead of an arbitrary amount like 2/3 or 3/4 and that a simple majority been held up in prior cases, but the NFL thought they could call al the shots.

As for the Dodgers, the financial portion is an easy call because the rules are laid out in black and white. That is not a hard to issue to settle.

A clause that can take away ownership of a team for virtually ANYTHING the Commissioner says is in the "best interest" of MLB (and that could be abything, liek you are the wrong race/sex/relegion/comb your hair), that is going to be a hard sell depending on what the Comissioner is claiming is undermining MLB.

Well, I happen to disagree. Perhaps since as a lawyer you have access to resources I don't, you would care to point out some other cases where owners have even tried to take on the commissioners clause. As to the financial portion, perhaps you can tell us what the Debt Sevrice Rule, that black and white rule, is. It can be summed up in one pretty concise sentence, and from what I've been reading during this whole McCourt divorce mess, I doubt he has a clue to what the figure actually is. I know how to arrive at the figure, but obviously don't have access to the info. But I'm sure Selig does.

I said the clause may be upheld, but it would depend on the issue and how much support the Commissioner has to prove up his decision, and I think I am right based on the LA Times article just posted this story on the issue;

"One option for McCourt and his attorneys would be to seek an injunction to stop the takeover, arguing that Selig's move was arbitrary and capricious." .,0,5177313.story .

yeah, I read the same article early today. It also says "If [Selig] has evidence that the owners are acting for their own personal welfare and are not dedicated to the team and MLB ... the commissioner has an obligation to step in and correct that situation." "Under the agreement McCourt signed with Major League Baseball when he bought the team, it is unclear whether McCourt can sue the league to challenge the commissioner's powers, Griffith said.. "McCourt has signed contracts admitting him to Major League Baseball, whereby he agrees to comply with those powers," Griffith said." And, "the court ruled that the commissioner does not have to establish a violation of the Major League Rules or moral turpitude to act as he sees fit. The "commissioner has the authority to determine whether any act, transaction or practice is 'not in the best interests of baseball,' and upon such determination, to take whatever preventive or remedial action he deems appropriate," the judges wrote in the 1978 decision" ( From Charlie Finley's lawsuit againstBowie Kuhn)

I know of few legal disputes, civil or criminal, in which each side does not have persuasive precedents to cite. Best, Don Bauder

Yeah, but baseball very seldom loses, and I can't recall the last time it lost a "big" case.

Damn. I had forgotten about Charlie Finley. Best, Don Bauder

Don't get me wrong, I don't like Bud Selig. As that article said, some of his decisions and actions have been arbitrary and capricious, if not downright self serving. But I'm a Dodger fan. I grew up in a family of Dodger fans. My brother, my parents and my grand parents were Dodger fans. Hell, even my inlaws, who moved to the Sates from Europe in the late 40's were Dodger fans, first in Brooklyn and later when, thank god for me, the relovated to the west coast. But I can't stand the McCourts. Most of us hoped that when he bought the Dodgers from Rupert Murdoch, we would get a real owner, someone who actually liked baseball. But what we got instead was a poser who thought he could play with the big boys and wanted to have a baseball team as a trophy. He's done nothing but spend boatloads of money on himself and done nothing to help the organization. I would like nothing more than to see him OUT on his ass with that shrew of an ex-wife. BTW, in case you haven't found it, theDebt Sevrice Rule, that black and white magic number, it's pretty simple. MLB has a rule that prohibits teams from operating at debt levels greater than ten times operating income (Ebitda). My guess is that Selig has not only the numbers, but at the very least tacit approval from a majority of owners for what he is doing, even though he doesn't need their approval.

"Arbitrary" and "capricious" are subjective, up to the judge's whims. Best, Don Bauder

You have a leg up on me. I read one or two McCourt stories and became nauseous. Couldn't read any more stories. Best, Don Bauder

You have a leg up on me. I read one or two McCourt stories and became nauseous.

If it is true that the McCourt's diverted a whopping $105 million of Dodger revenue to fund their lifestyle, then I think both have to go ASAP.That may not be true or accurate though.

Another item the LAT touched on, from 73-86 the Dodgers lead the league in ATTENDANCE except for one year. I was surprised to hear that-especially when they are only averaging 17K per game this season, down from 27K 4 years ago.

"I was surprised to hear that-especially when they are only averaging 17K per game this season, down from 27K 4 years ago"

Whaaat? Sorry surfpuppy619, but you need to pay a little more attention to what you read. The Dodgers have broken 3 million in attendance for 14 out of the last 15 yrs, including the last 10 in a row. They have averaged more than 40k for the last 7 and thru the first 12 home games this year, have average 37,686. Even your vaunted Padres are averaging more than 28k thru their first 9 or 10 home games.

The figure you read is season ticket sales, which indeed are down almost 40% since 2007 McCourt had no business being approve as an owner in the first place. He had to leverage real estate just to come up with the money. I don't have an issue when the fact came out during their divorce that they took $100 million in revenue; it's their team. What I have an issue with is that in the 4 years they were doing that, the Dodgers organization took on almost $500 million in long term debt and with the exception of getting Joe Torre and Manny Ramirez for a short time, have done nothing to make the team better. The McCourts, both of them need to go. Selig needs to bring in an established baseball person to run the team until new owners are found. Someone like Kim Ng. And then find an owner who can actually afford to own a team and wants to own a team.

The figure you read is season ticket sales, which indeed are down almost 40% since 2007

Oppsss...SEASON tickets!

"Meanwhile, season-ticket sales have fallen from 27,000 in 2007 to about 17,000 this season, according to court documents and baseball sources."

Ah, pro sports. All the teams should be based in Vegas, so the owners can mix with their confreres. Best, Don Bauder

Selig was voted commissioner because as owner of the Milwaukee Brewers he promised to build a new stadium with his own funds if only a highway would be moved by government. But in the end, governments paid for the entire stadium. The other owners were in awe of such a feat and voted him commissioner. That's my opinion, anyway. Best, Don Bauder

I don't know about that.My reccolection of what I read is that when the bill went to the state senate it already had a sales tax in it to provide most of the funds for the stadium and that it ended up the Brewers never had the money to contribute their share and could only throw in what they got from the naming rights from Miller Brewing Co. The main thing I remember is that originally, the deal was voted down by one vote. But one of the state senators who had voted no because he did not believe his county should be taxed for the stadium changed his vote. And a short time after that he was booted out of office in a recall vote. (Don't see that happening much in Ca. do we) Don't forget, after Faye Vincent resigned after a majority of owners gave him a no confidence vote, Selig was only acting as the "interim commissioner" for 6 years. He wasn't appointed commissioner until 1998, after construction started but before it was finished. And it wasn't until he was officially appointed commissioner that his daughter was named acting president of the Brewers and his interest in the team was placed in a trust. Imo, Selig nearly destroyed baseball with the 94/94 seasons debacle and had it not been for Cal Ripken's chase of Lou Gehrig's record in 95 and the Mark McGuire/Sammy Sosa home run derby in 98, baseball may have died a slow and painful death, And don't even get me started on the steroid issue. In the early 90's, everybody new about them. (I'm sure everyone in SD remembers Cami's great seasons in 95/96/97). As commissioner, Selig could have,should have, and, according to some, did know about their use. But hey, home runs sell tickets.

Also let me add this exerpt from the MAJOR LEAGUE CONSTITUTION MLC Art. VI, Sec. 2: Sec. 2. The Major League Clubs recognize that it is in the best interests of Baseball that all actions taken by the Commissioner under the authority of this Constitution, including, without limitation, Article II and this Article VI, be accepted and complied with by the Clubs, and that the Clubs not otherwise engage in any form of litigation between or among themselves or with any Major League Baseball entity, but resolve their differences pursuant to the provisions of this Constitution. In furtherance thereof, the Clubs (on their own behalf and including, without limitation, on behalf of their owners, officers, directors and employees) severally agree to be finally and unappealably bound by actions of the Commissioner and all other actions, decisions or interpretations taken or reached pursuant to the provisions of this Constitution and severally waive such right of recourse to the courts as would otherwise have existed in their favor.

McCourt has already indicted he may go to court and he has certainly read the purchase agreement and rules.

Also, once again, this clause above may not be valid or enforcable. Just because lawyers put something in, like tons of clauses and fine print, that does not mean it is a done deal. The fact is many contracts have tons of legally invalid, unenforcable portions, yet they still put the junk in, it is the nature of the contract.

The LA Times article said the "best interests" clause is found no where else in business, and it can have a wide application in MLB (why?? who knows), but there are indeed limits to its application-which is basically what I have said.

The question is have the limits been pushed too far in this case?

But yet while there have been a few cases challenging various actions the commissioners office has taken, I have never heard or read of a case where an owner or anyone else in baseball has challanged the the legality, or enforcability, or constitutionality of the MLB constitution, Article II, Section 3.. At the very least if someone has, they were not successful as it still stands. Since your a lawyer, what standing do you think such a case would have since all owners sign documensts atesting to their acknowledgment of the fact that they are obligated to adhere to the commissioners decisions, can be disciplined with varying severity, up to removal, if they don't, and that they waive such right of recourse to the courts. Since no one held a gun to their head, it seems they would have a hard time fighting it.

It appears from what I have been reading is that the clause is valid (or at least was in the past), but there are limtis to it.

The limitations are what a court would rule on- did the Commissioner go too far in any of his "best interest" actions.

At some point, Frank McCourt should realize it is not in his own best interest to keep suing. Best, Don Bauder

What would be in the best interest of baseball would be to speed up the game. But then, when would the commercials run? Best, Don Bauder

Maybe Frank McCourt will hire you to be his attorney when he sued Major League Baseball. Best, Don Bauder

Hilarious. On the other hand, Selig could be no worse than Davis and Schwarzenegger. Best, Don Bauder

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