April 30 (Bloomberg) -- The Los Angeles Dodgers, winners of the past two National League West titles, are in last place with their smallest payroll in five years, a manager in the final year of his contract and the future of the team potentially in the hands of a divorce-court judge.
The franchise is valued as the fourth highest in baseball at $727 million, according to Forbes magazine, yet failed to add a major free agent during the offseason. The team’s payroll is down for the third straight year.
The pending divorce of team owner Frank McCourt from his wife, Jamie -- in which she is seeking $988,845 a month in temporary spousal support as they await an August trial -- has some analysts questioning if the team is getting as much attention from the front office as it has since the couple bought the team in 2004. The Dodgers ended a seven-year playoff drought that season.
“The divorce can’t help but have a significant impact on the team and its operations,” said Marc Ganis, president of Sportscorp Ltd., a Chicago-based sports business consulting firm. “It will distract management talent from working on the team. In the worst possible situation, it inhibits the ability to make decisions and spend money.”
Frank McCourt, 56, a Boston real-estate developer, bought the Dodgers from Rupert Murdoch’s News Corp. for $430 million in 2004. Jamie McCourt, 56, an attorney who was educated at Georgetown University, Sorbonne University in Paris and Massachusetts Institute of Technology’s Sloan School of Management, was chief executive officer until her husband fired her in October. Jamie McCourt then filed for divorce. They have been married 30 years.
The club has thrived on the field since 2004, making the postseason four of seven years, and set a team attendance record of 3.8 million in 2006. This season, though, the Dodgers are 8-14, tied with the Atlanta Braves for the worst record in the National League.
The Major League Baseball team’s player salaries have dropped 20 percent in two years, to 11th highest from seventh among the 30 clubs. Manager Joe Torre, brought in for the 2008 season after winning four World Series in 12 years managing the New York Yankees, will be without a contract after the season unless the team re-signs him.
This week, Frank McCourt said the breakup of his marriage isn’t affecting the management of the team.
“The divorce case is separate and apart from the business activities of the team,” his holding company, the McCourt Group, said in a statement April 28 in response to a request for comment from him. “The Dodgers’ goal is a world championship, and that is the focus. The divorce has not and will not distract the entire Dodgers organization from the pursuit of that goal.”
Jamie McCourt, who didn’t respond to a request for an interview through her attorney, claims in court papers that she is entitled to 50 percent of the team and has said she will buy out her husband if a judge rules in her favor and splits ownership of the club.
A Los Angeles County Superior Court judge is considering Jamie McCourt’s claim for $988,845 a month in temporary support from Frank McCourt, who has offered his estranged wife $150,000 a month. The trial is scheduled to begin Aug. 30 and run through at least the end of September -- the heart of the pennant race.
Torre, 69, halted discussions on a contract extension saying he didn’t want a distraction during the season. He also is trying to keep the McCourts’ divorce case from affecting the team.
“Our job is separate from that, we’re here to win ballgames, not concern ourselves with something we really don’t control,” Torre said when the team was in New York to play the Mets this week. The manager is familiar with shielding his players from management: He worked 12 years for New York Yankees owner George Steinbrenner.
The Dodgers didn’t offer arbitration in the offseason to pitcher Randy Wolf, who led the team in starts (34) and innings pitched (214) last season, and stayed away from bidding for free-agent pitchers such as John Lackey, who went to the Boston Red Sox from the Los Angeles Angels for $82.5 million over five years.
The Dodgers’ payroll dropped by more than $18 million in 2009 and another $5 million this year. This year’s payroll is the lowest since $83 million in 2005, according to USA Today’s figures. Of the 2010 total, 36 percent is consumed by two players -- outfielder Manny Ramirez, who has a base salary of $18.7 million on a contract that expires after this season, and pitcher Hiroki Kuroda, who is getting paid $15.4 million. Ramirez has been on the disabled list since April 23 with a strained calf muscle.
Not the Divorce
The McCourt Group’s statement said the payroll drop was “not at all” connected to the divorce case and said the marriage breakup will not affect the team’s financial decisions.
Ganis said the real test of the divorce’s effect will come when players such as 25-year-old outfielder Matt Kemp, a Gold Glove winner who hit 26 home runs last year, and 22-year-old starting pitcher Clayton Kershaw, who had a 2.79 earned run average last year, seek long-term contracts. Kemp is signed through next season and Kershaw has a one-year deal.
“The time will come very soon when some of their star players will be eligible for free agency, and then we’ll see what effect the divorce is having,” Ganis said in a telephone interview from his office.
Other divorces of sports franchise owners had direct effects on the clubs.
Jack Kent Cooke sold the Los Angeles Lakers of the National Basketball Association and the Los Angeles Kings of the National Hockey League in 1979 and used some of the proceeds to pay a $42 million divorce settlement to the first of his four wives.
San Diego Sale
In 2009, John Moores slashed the payroll of the San Diego Padres and eventually sold the baseball team after his wife of 44 years filed for divorce.
Frank McCourt has rejected comparisons to Moores, and has said in public statements and in documents filed in the divorce case that he hopes his four sons eventually will control the team.
“The Dodgers are not for sale,” he said March 23 in a speech to the Valley Industry and Commerce Association, located in the San Fernando Valley northwest of Los Angeles.
One of Jamie McCourt’s attorneys, Bertram Fields, said in a phone interview that his client is ready to take control of the team if the judge rules in her favor.
“She doesn’t want to sell,” Fields said. “Since she was 8 years old, her ambition in life was to own a baseball team. She is arranging to raise money to buy Frank out.”
To contact the reporter on this story: Rob Gloster in San Francisco at firstname.lastname@example.org.
To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.