Chad Moriyama Dodgers, Sabermetrics, Scouting
Ramona Shelburne of ESPN Los Angeles and Bill Shaikin of the Los Angeles Times calm the concern of a lot of fans of the Los Angeles Dodgers who were apparently fretting about giving money to Frank McCourt.
The joint venture between the ownership group led by Magic Johnson and soon-to-be former Los Angeles Dodgers owner Frank McCourt for land around Dodger Stadium will not allow McCourt to reap any profits from parking revenue, according to three sources with knowledge of the situation.
Under terms of the deal, no development would take place on the lots unless the Johnson group and McCourt agree. The deal also ensures that McCourt can retain partial ownership of the lots and share in any future development revenue.
The money fans pay to park at Dodgers games goes to the new ownership group.
So go back to the stadium and stop whining.
Thanks.
That was always going to be the case, even if he had full control of the parking lots. Parking revenue goes to the team, who pay a $14,000,000 lease on the lots, regardless of how many cars park, which makes it impossible for the team to turn a profit. I haven’t seen anything that says that lease is no more.
Exactly. It’s so frustrating to read coverage on this stuff sometimes because the people who are supposed to be digging (read: journos) end up being glorified stenographers.
Just look at Shelbourne’s coverage of Macchialo.
The part that bothers me is that it seems so carefully worded: “…will not allow McCourt to reap any profits from parking revenue” and “The money that fans pay to park…”
I’m not sure if they did that to shout to fans who would otherwise boycott the lots, and maybe the games, or because they are still paying the outrageous lease.
But I thought the new ownership group paid $2.15 billion for the whole shebang, with that figure including the $150m for the lots and underlying land. If one entity owned by the Guggenheim group (the Dodgers) is paying the lease to another entity owned by the Guggenheim group (the land on which the parking lots sit on), then what’s the big deal? Isn’t McCourt’s only remaining connection going to be some percentage of the partnership of any hypothetical future development of the real estate that underlies the parking lots?
Exactly, I’m lost here.
Well, it’s not necessarily a big deal but it’s journos not really know what they’re talking about.
Let’s use this hypothetical:
Dodgers LLC pays Landco LLC (refer to my comment below) $14MM/yr. This is a budget line item that Dodgers LLC has to account for. What if the total parking revenue for the year comes out to $10MM. Dodgers have to come up with the additional $4MM somewhere. Maybe money that could have gone towards a contract (or whatever).
Now, I’m not necessarily going as far as Davidpom50 to say that because of this lease the Dodgers won’t be able to turn a profit, but things aren’t as clear cut as they seem at first blush.
I guess what I’m saying is that no matter what they charge for a lease, it’s all their money anyway, so in the end, all that matters is how much they get from the parking.
Yeah, I’m not quite getting it.
Are you saying the team will be paying a lease to a company that’s not affiliated with the owners?
No, it will be a company owned by GBM.
It’s shifting money from one pocket to another.
GBM will own Dodgers, LLC (baseball team) and what used to be Landco LLC (parking lot).
When you roll up to Dodgers stadium and park, you pay your $15 to Dodgers, LLC. However, Dodgers LLC is leasing the parking lot from Landco LLC and will pay Landco LLC $14MM/yr.
Now, you’re right in that it’s just shifting money around different pockets (since GBM is the 100% beneficiary owner of both Landco LLC and Dodgers LLC) but this is the same kind of logic for setting up a RSN to sell the media rights.
Right, right.
I don’t see anything that says McCourt wouldn’t get half of that lease, if it still exists. They’re saying he doesn’t get any parking revenue, they don’t mention the lease at all. Sure, Guggenheim might get to keep $7mil of the $14mil, but that’s still 14 out of the team, and 7 to McCourt. Not gonna stop me from parking, and might even make me more likely to park since the TEAM needs the revenue, but it’s still frustrating that McCourt might be getting anything.
If Frank McCourt getting any money is pissing you off, then he’s already won. Cuz you can be damned sure he’s sleeping well tonight.
I understand your position and it is frustrating to be sure (and certainly for me it is frustrating too) but my larger frustration comes from journos not really doing their job.
That said, the official documents hasn’t been filed with bankruptcy court, when it does, hopefully it will flesh out a bit about the real estate transaction.
I was referring more to him still getting a cut of the Dodger revenue streams going forward. I’m also separately pissed that he could buy the team on credit, default on those loans, shadily circumvent other loan covenants that restricted how much cash he could take from the team, drive the team in the ground financially AND competatively, and walk away with a billion dollars profit.
He’s gonna make even more when they develop the land.
@chad – for a variety of reasons, I don’t think that’s going to happen. The history of Chavez Ravine is riddled with the bodies of political machination. Take a look at these two wiki entries: http://en.wikipedia.org/wiki/Battle_of_Chavez_Ravine && http://en.wikipedia.org/wiki/Chavez_Ravine
It’s a political land mine and I doubt any politician is going to want to get anywhere near it. As it is, Chavez Ravine is currently only zoned for Dodgers Stadium and its parking lots, nothing else. If it were ever to be developed, the land would need to be rezoned and all that bad blood will be dug back up and just imagine how much worse it would be when people find out that Frank McCourt is still involved and will line his pockets even more. I know that Magic Johnson is beloved in the city and there will obviously be a lot of cash involved (and the land will be developed eventually) but I would be surprised if they even start the environmental impact study within the next decade.
There’s enough money to be made there where I don’t see how it CAN’T happen.
Here are some articles from today (from SOSG),
bitterness from chavez ravine families: http://www.latimes.com/news/local/la-me-adv-chavez-ravine-20120405,0,7768951.story
it may not have mattered as much in the 50s/60s when government, especially local government had a much firmer grip on things, but it will all be dragged back up if they really push forward with developing the land.
‘Course, there’s this: http://www.businessweek.com/news/2012-04-04/dodgers-costing-2-dot-15-billion-hinges-on-property-return
Which, if read correctly, hinges more on that $150MM than the $2B as that’s the option that really gave GBM/GP control over the land. Frankly, I still think the economists saying that they vastly overpaid on this deal to be semi-out to lunch but hey, I’m just some dude on the internet, not a tenured professor from ‘SC or UCLA.
I guess it’s just that they had been wanting to do it for like a decade already, so I can’t see how it’s just abandoned.
Do you believe that he does have the lease?
I assume the “he” here is Frank McCourt? GBM essentially paid $150MM for controlling interest of the holding company that owns the parking lot land. And revenues from the holding company won’t flow to Frank McCourt, he will only be a limited partner and participate in the upside should the land be developed.
Asking David, mainly. I know you haven’t said anything about him being paid the lease.
Just bothers me that fans are derping it up in the comment sections, talking about not going unless he’s completely out of the picture.
Grow a pair, fuck.
Yup, but fans are irrational, what are you gonna do?