06.17.11

The McCourt Settlement (And Frank’s Creative Accounting)

Posted in Baseball, The Law, The Marketplace at 9:20 pm by

Frank and Jamie McCourt reached a settlement in their divorce proceedings earlier today, pending Major League Baseball allowing the former to sign a 17 year deal giving Fox broadcasting rights to the Dodgers. Trouble is, when the former parking lot magnate spoke of a sizeable advance payment from Fox that Bud Selig wouldn’t allow him to touch, he claimed at the time said funds would ease the Dodgers’ cash flow concerns.  As the LA Times’ Steve Dilbeck explains, McCourt’s story seems to have changed. Radically.

“The $300 million I made clear to baseball today, that the entirety of the $300 million is going directly into the Dodgers as equity,” McCourt said April 27th. “None of those dollars is being used in any personal way. I would be happy to make that commitment in writing.”

Well, he did make a commitment in writing Friday in his “divorce settlement,” though the money to be loaned by Fox up front had somehow mushroomed to $385 million.

And per the divorce agreement, out of that $385 million: $5 million would go each to Frank and Jamie McCourt to cover attorneys’ fees (hey, they stayed up to 3 a.m. Friday); each would get $5 million to do with as they please (down payment on another villa!); $23.5 million would repay Frank for the personal loan he acquired to make payroll (think that $30 mil Fox already loaned him); $80 million will be used to pay off debt (well, a little of it); and $50 million will be placed into an account subject to the court’s orders (no, not for a left fielder, it’s just-in-case money).

Grand total: $173.5 million.

Otherwise, not a cent of the TV money will be for personal use! Other than that $173.5 million.

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