Bud Selig’s Double Standard
What is Bud Selig’s definition of “the best interest of baseball” ?
We know the clause is subjective and can be loosely interpreted depending on the commissioner’s end goal (be it Bud Selig, Bowie Kuhn, Ford Frick, or any other MLB commissioner.). So if we had to guess, what does the term mean today, in Bud Selig’s mind?
I ask because there appears to be some inconsistency with the way Selig is handling the situation in Los Angeles compared to how he is handling a similar case in Flushing. In fact, there seems always to be inconsistency, if you look at what happened in the past in Montreal, Texas, Miami, and Washington DC; there have been books written about that, so I won’t reinvent the wheel here — see the one to the left or anything written by Andrew Zimbalist.
The Dodgers are in a financial mess, as are the Mets. Why is it in baseball’s “best interests” to take over the Dodgers but not the Mets?
But before we get to the actual takeover, let’s look at something specifically: the fact that Selig didn’t mind giving Fred Wilpon $25M from MLB’s charity coffers, but did have a problem with Frank McCourt obtaining a loan from FOX.
From the March 5, 2011 edition of The Los Angeles Times:
Selig would like Wilpon to stay and the McCourts to go. He has not put it quite so bluntly, of course, but he said last week that he has “great affection and great respect” for Wilpon.
So we asked him whether he could say something similar about the Dodgers’ ownership.
“I’m not going to discuss the L.A. situation,” Selig said. “Thank you for asking.”
His actions speak for him. Wilpon asked Selig to loan him $25 million from the commissioner’s discretionary fund, and Selig said yes. Frank McCourt asked Selig to approve a loan of about $200 million from Fox — with not a penny from the commissioner’s fund — and Selig said no.
Selig bristled when asked how he would justify approving a loan to one financially strapped owner but not to another.
“No. 1, I don’t have to,” he said. “Every situation is radically different from the other. To compare one situation and say, ‘Well, you did this but you didn’t do that,’ if all the facts are similar, that’s a different story. But they’re not similar.”
Why? He wouldn’t say, but it is no secret in the baseball world that Selig believes Wilpon has been a good owner and McCourt has not.
To that, the fans of Los Angeles have a common rejoinder: Hey, Bud, why did you let this undercapitalized guy buy the Dodgers in the first place? After all, on opening day of the McCourt divorce trial, Frank’s attorney said his client had put “not a penny of cash” into his purchase of the team.
Selig won’t answer in public, but this is what he has told baseball officials: If the McCourts had not spent all that money on themselves, the Dodgers would have been just fine.
The conspiracy theory that Selig installed the McCourts at Dodger Stadium to help keep salaries down among major market teams assumes bidders were lining up to buy the Dodgers.
They weren’t. Fox had the team on the market for years, but annual losses of about $50 million scared off most potential buyers. The McCourts presented Selig with a business plan to turn the franchise around, and they executed brilliantly, virtually doubling the Dodgers’ revenues within five years and turning tens of millions in annual profits.
As court records revealed, the McCourts siphoned those profits for their lavish lifestyle, and for loan upon loan, with payment inevitably coming due. Baseball executives who have spoken with Selig say he is angered and embarrassed by the revelations from the divorce trial and unlikely to extend any financial hand to either of the McCourts.
Frank McCourt asks that fans judge him by the Dodgers’ record, and by that standard he has been a better owner than Wilpon. In the seven years since McCourt bought the Dodgers, his team has had more winning seasons, more division championships and more appearances in the National League Championship Series.
In the 24 seasons that Wilpon has owned at least half of the Mets — with all the wealth of baseball’s largest market — they have posted a winning record 13 times, a losing record 11 times.
He apparently has not embarrassed his fellow owners — or Selig, whose financial blessing he will need to keep control of the Mets. The Wall Street Journal reported last week that Wilpon and his partners hope to sell a minority share of the Mets to cover club operations and debt payments, then try to find other ways to settle the liability associated with the Madoff scandal.
So, it’s OK to blindly and stupidly sink all of your funds in a pyramid scheme, but not OK to stupidly siphon all of your profits into a lavish lifestyle. Apparently there are degrees of stupidity that are judged differently. Stupid is as stupid does.
This pretty much falls in line with the principles of the Bud Selig Era — specifically, that successful organizations are penalized, while failure is rewarded. Makes sense, right? That sounds apt for the term “best interest of baseball”.
What’s more fun about this situation is that it was Bud Selig himself who created it by installing the McCourts as owners of the Dodgers — despite the fact that the Boston developers had little of their own money to put into the club. From The Boston Globe, January 2004:
The South Boston parking lot king’s new new thing is to buy the Los Angeles Dodgers, a storied baseball franchise. McCourt has offered $430 million for the team. The problem: It is not at all clear he has the dough.
The L.A. papers have started deriding McCourt as “the Boston parking lot attendant.” We in the Boston press get a bum rap about being too nasty. Here’s a sample of the beating McCourt is already taking, and they don’t even know the guy yet. “I called the Boston office of Frank McCourt, you know, the poor guy who is trying to buy the Dodgers, and his secretary said he’d call me back,” wrote T.J. Simers of the Los Angeles Times. “He never did, and it’s my fault — knowing he doesn’t have money to buy the Dodgers, I should have told his secretary to have him call me collect.”
And later in the same article:
Despite his questionable finances, the Dodger deal is going to get done because baseball commissioner Bud Selig wants it done. Just as Selig wired the Red Sox sale for John Henry & Co., he is wiring this deal not for McCourt but for Rupert Murdoch. Murdoch wants out of the money-losing Dodgers in the worst way, and Selig wants to accommodate him. Baseball’s television contract comes up for renewal in a year, and with the major networks mostly out of baseball, Selig wants Murdoch’s Fox Network in the game.
In the end, Selig will wink and find a way to count enough of that McCourt debt as equity.
A-ha! So the “best interest of baseball” is to make sure there is a multi-billion-dollar TV contract in place. That’s fair, I suppose; without all those billions, MLB wouldn’t be able to pay ballplayers 7- and 8-figure annual contracts. And what kind of sport would we have if that wasn’t possible?
Fast-forward to today and the MLB takeover, which has a small problem: it’s not in line with the “debit limit rule” that Selig has presided over — and has been in existence since 1975 — which states that a team must operate with a 60:40 ratio of assets to liabilities. The Dodgers are within those guidelines. The Mets are not. The Rangers were not, either, from 2008 up until Nolan Ryan and co. bought the club. In fact, Selig had absolutely no problem with Ryan’s group accepting a huge advance from FOX to outbid Mark Cuban — who had the financial wherewithal to buy the Rangers outright (and probably the Mets and the Dodgers as well).
Why was it OK for Ryan to get funding from FOX to buy the Rangers, but not OK for McCourt to take money from the TV giant? What’s wrong with Mark Cuban owning a team? Does he have too much money? And again, why is it OK for the Mets to take $25M from MLB to pay the bills, but not OK for the Dodgers to obtain private funding?
Let’s get something straight: I don’t necessarily see anything wrong with MLB taking over the Dodgers right now. Of course, it would have been nice if they installed more qualified ownership in the first place.
What I do wonder, though, is why there hasn’t been a takeover of the Mets, who have been in the red for just as long, if not longer than, the Dodgers? What’s so special about the Wilpons that MLB is bending over backward to help them keep ownership of the team? Like the McCourts, the Wilpons never had enough of their own cash to buy nor operate a Major League franchise — the only reason they were able to go as long as they did was because of the “funny money” Bernie Madoff was printing. I’m not sure how it is in “the best interests of baseball” to allow a New York team hemorrhage cash, set up for a fire sale, and be the focus of the most damaging pyramid scheme in US history.
But maybe you can explain in the comments.
In either case, MLB secures the lionshare of viewership-driven revenue. The wave of the future.
Now, this may go a step into dissecting Bud’s “best for baseball” reasoning…hear me out…if Bud can block a long-term contract between a team and a broadcaster like Fox, he gains more time to install a more advantageous MLB-centric broadcast arrangement. It is, truly, better for baseball if the Dodgers had their own network, their own broadcasters covering it, and all rebroadcasts handled via a cheap and tidy inter-company agreement with MLB.tv. Fox might cough up $3 billion for 20 years but MLB can have that and much more if they invest in / create a network that is part of the Dodgers’ ownership group – which would be in turn, of course, a feeder-fund to the MLB cabal.
Morality has nothing to do with Selig’s definition of “good for baseball”, unfortunately for the baseball fan. The Wilpon/Madoff connection is inconsequential to Bud’s work; SNY is a lynchpin of a refreshed MLB revenue model and as Wilpon toes Bud’s line with a new stadium to boot, Freddie’s inherently “good for baseball.”
MLB is fast becoming a pyramid scheme.
Craig Calcaterra (NBC Sports Hardball Talk) points out that Bud is likely violating anti-trust exemption. This may be inconsequential as well; Bud succeeds by pushing McCourt into a defacto forced sale by settling such an antitrust suit with MLB. He installs a puppet until the further branches of his plan bear fruit.
perhaps he sees the Mets as victims and McCourt as careless/reckless. All of the above makes sense to me as you have laid it out, but everything I hear is that the Mets are innocent of fraud and are victims. And if so Selig would want to help them out, whereas McCourty has acted not in the best interest of baseball and the Dodgers.
In any case, why does it matter, even if the Wilpons were victims? They are clearly in over their head, always were, and have no possibility of keeping the franchise, regardless of what happens with the Madoff case. So they should be allowed to keep running the team into the ground because Bud feels sorry for them? Is Fred Wilpon the real-life George Bailey?