More Questions Emerge in McCourts' Tussle Over Dodgers
Over the past 18 months, the Los Angeles Dodgers paid nearly $4 million in "consulting services" to an entity that has done virtually nothing for the club, even as the team has made a concerted effort to raise ticket prices, trim payroll and acquire players on the cheap. Moreover, the club paid two of Frank and Jamie McCourt's adult sons large salaries -- $400,000 and $200,000 per year, respectively -- for services that are undefined and could not be described by either Frank or Jamie McCourt, according to court documents filed in the couple's divorce case.
FanHouse has also learned that the Dodgers' ownership includes two limited partners who provided loans to help the McCourts finalize their purchase of the club in 2004, according to people familiar with the matter. One of the limited partners is Franklin Weigold, a long-time executive with Analog Devices, Inc., a Norwood, Mass.-based maker of electronic equipment. Weigold lives part of the year in Los Angeles and was also part of the McCourts' failed bid to purchase the Boston Red Sox in 2001.
It is not clear who the other limited partner is, but that entity and Weigold both own convertible bonds in the Dodgers that would transfer into "sizable" equity in the team in the event of a default on the loans, according to the source. (The McCourts have not missed any of the payments since they became owners six years ago.)
There has never been any previous mention of the limited partners, their loans or their potential stake in the club by either the McCourts or the Dodgers. Weigold is not listed anywhere in the club's media guide or on its website.
Reached at his home in Beverly Hills, Weigold had no comment and referred all questions to Frank McCourt. The Dodgers did not comment on the consulting payments or loans. "Frank McCourt is the 100 percent owner of the Dodgers, as confirmed by Major League Baseball," a team spokesman said via e-mail during the team's Monday night home game against the Houston Astros.
Beginning in 2008 and continuing through at least the first four months of 2010, the Dodgers paid $300,000 per month to an entity called the John McCourt Company for consulting services related to development of the real estate surrounding Dodger Stadium, according to court documents and statements made in court by both sides in April. Earlier this year, the Dodgers stopped paying the fees, but the payments continued to be paid by Blue Landco LLC, a different McCourt-owned entity.
The switch was significant because under the terms of the McCourts' financing arrangement with lenders, Frank McCourt cannot receive more than $5 million in compensation from the Dodgers -- but there are no such restrictions on payments from Blue Landco LLC. The fees to the John McCourt Company only came to light after a "laborious" discovery process related to the couple's divorce, according to Jamie McCourt's attorneys, one of whom described the John McCourt Company as a "Frank slush fund" after a hearing in April.
The payments to both the John McCourt Company and the couple's sons took on added significance during the couple's recent tussle over temporary spousal support. Jamie's attorneys claimed the fees paid to the John McCourt Company, as well as the large salaries paid to Drew and Travis McCourt, were controlled by Frank, and therefore available to contribute to spousal payments to Jamie while the divorce case is ongoing.
Neither of the McCourts' sons is listed on the team's staff directory, though earlier stories have noted that Drew McCourt, now 28, helps with the club's marketing efforts.
Earlier this month, a Los Angeles County Superior Court judge ordered Frank to pay Jamie $637,159 per month in support, retroactive to December 15 of last year. The bulk of the amount will go toward paying mortgages on the couple's seven residences, which are all listed in Jamie's name, while she will receive $225,000 a month to maintain her lifestyle. She has received his first check, and he must pay her the total from the previous four-and-a-half months – or more than $3 million all told – by September 1.
In deposition testimony and comments from both sides in court, it is not clear what, if anything, the John McCourt Company did to earn its substantial fees. The entity is described on the team's website as the "real estate development and management affiliate of the McCourt Group," which is the holding company that owns the Dodgers. The entity's lone identifiable employee is Geoff Wharton, the Dodgers' chief operating officer, who is listed in his media guide bio as the president of the John McCourt Company. The entity's only apparent assignment was to work on the club's "Next 50" project, a much-ballyhooed -- but never realized -- plan to upgrade Dodger Stadium.
In April 2008, the McCourts announced a $500 million vision to modernize Dodger Stadium and transform the area surrounding the 48-year-old venue into a year-round destination. The plans included a dramatic new entry beyond center field, a "bustling new promenade" of shops and restaurants, as well as a new "Dodger Experience" museum, according to a club's press release. "We're creating a new stadium without tearing down the old," Frank McCourt said in the team's statement at the time. "That may take more effort and more resources, but we're talking about Dodger Stadium. The Dodgers are a world class organization, a world class brand and a franchise with a history of courage and vision."
The plan's financing fizzled, however, after the stock market collapse in the fall of 2008.
Since the McCourts took control of the team six years ago, the Dodgers have made the playoffs four times, and the club advanced to the National League Championship Series in each of the last two seasons. But the couple has also come under harsh criticism among locals for consistently raising ticket prices, hiring and firing numerous executives and displaying an often-tin ear when it comes to public relations.
The divorce case has further sullied their image, particularly after details of their extravagant lifestyle, much of it funded by loans acquired through their ownership of the Dodgers, emerged in court documents. After taking over the Dodgers, the couple purchased several luxurious homes, including two mansions adjacent to the Playboy Mansion, as well as a pair of beach-side estates in Malibu.
At the same time, the Dodgers have increasingly pinched pennies. In 2008 and 2009, the club spent less money signing draft picks than any other team in Major League Baseball. This past offseason, despite the club's shortage of pitching, the Dodgers made no effort to re-sign starters Randy Wolf and Jon Garland. The team has been on the losing end when trying to acquire stars such as Roy Halladay, Cliff Lee and CC Sabathia, and in 2008, the Dodgers added Manny Ramirez and Casey Blake only after both players' former teams agreed to pay most of their salaries.