I may dabble, but Josh Fisher is the go-to source for all of your McCourtly goodness. Today, Josh talks about just how much of a clusterf*ck the Dodgers’ sale was, and why it will make the McCourt divorce an even bigger hassle than most of us currently realize:
So, if you’re counting at home, the above adds up to $421 million in financing…for a $371 million purchase. That, friends, is a little scary. And there’s more. In May 2005, McCourt announced a new, $250 million 25-year note which took out B of A and what remained of the debt to Fox (after the foreclosure on the Boston property). This increased the debt load to $521 million on a $371 million purchase. This financing, known as a private placement, was provided by an unidentified group of institutional investors, such as pension funds and insurance companies. The terms of the loan–5.66% fixed for 25 years–are relatively favorable to McCourt. The collateral for this new loan was reportedly the 300 acres of real estate surrounding Dodger Stadium–not the club itself. Importantly, one of the provisions of the private placement was that control of the Dodgers would not change hands.
In April 2009, Forbes estimated the value of the franchise (including surrounding land) as $722 million with a debt total a little shy of $420 million. Where does that $420 million come from? We don’t know the status of the $75 million debt to major league baseball. My guess is that the McCourts further leveraged the land around Dodger Stadium, bringing the private placement debt to at least $345 million.
That is just a snippet of an insanely fascinating (at least to people like Josh and me) post about Dodgers, Inc. The upshot of which is that the McCourts don’t have nearly as much money as Jamie McCourt’s filings would have you believe, and that unwinding all of this is going to be a monster headache. So much so that if I were one of the McCourts, I’d consider some kind fo truce as soon as possible that would keep joint ownership to some degree rather than risk all of the creditors calling in the notes.