McCourt Divorce Trial, Day Three: Screwing The Fans
How's this for karma? At the same moment that Roy Oswalt was mowing down Dodger hitters this afternoon, David Boies was grilling Frank McCourt about his plan to turn the Dodgers around by cutting player payroll.
You might ask how that's relevant to the divorce trial, and Judge Scott Gordon seemed to have the same question. Mostly, it looked like Boies was having fun and couldn't help himself.
At the end of the day, I asked Boies how Frank compares to Bill Gates as a witness.
Boies famously dismembered the Gates in a federal anti-trust case in the late 1990s, drawing him into making blanket denials that were easy to refute.
|David Boies takes questions|
This is the third day in a row that Boies has worn the same red tie. Some sort of good luck charm, apparently.
The payroll issue came up because Frank says that Jamie thought the Dodgers purchase was too risky, and she signed away her right to the team because she didn't want to share in that risk.
Jamie's lawyers are trying to show that the purchase was in fact a sure thing. As evidence, they point to the Dodgers' Summary Business Plan from Oct. 23, 2003. In short, the plan was to screw the fans.
There was actually a two-pronged strategy: raise ticket prices and cut expenses, primarily payroll. Frank says he never saw the plan, which raises all sorts of other questions, but let's try to stay focused.
Boies: First, did you believe and did the acquisitions team believe it was practical to reduce the operating expenses of the Dodgers?
Ted Soqui Frank McCourt leaves the courthouse
McCourt: Yes, sir.
Boies: What were some of the ways to reduce operating expenses?
McCourt: The most significant expense was player compensation. That would be by far and away the biggest line item.
The plan was to cut payroll incrementally to $85 million by 2006, and Frank -- ever the over-achiever -- actually beat that goal by a year, cutting payroll from $105 million in 2003 to $83 million in 2005.
Payroll was supposed to rise only 4% per year after that, and there he was not so successful. Player salaries rose to $118 million in 2008 -- at the height of the credit bubble -- before crashing back down to $95 million now.
The plan also projected a deep cut in "baseball operations" -- things like scouting, farm teams, the Dominican academy, and so on -- of 11% in 2005 and 21% in 2006. And now they wonder why they don't have any prospects.
The other part of the plan was to raise ticket prices. From the plan, it sounds like they think Dodger fans are a bunch of suckers.
"Dodger fans continue to buy tickets and pass through the turnstiles of Dodger Stadium in remarkable numbers despite the team's lack of success on the field... However, Dodger tickets currently are priced, on average, well below those of other large-market (and many mid-market) teams."
And, of course, they raised average prices about 70% from 2004 to 2009. Though from the looks of the crowds lately, it seems like fans have less tolerance for failure than they used to.
Also worth noting: Not only did the McCourts buy the Dodgers entirely with loans, but they also took $2.5 million in cash out of the team immediately upon the purchase. If this were a home mortgage, they'd call that "cash back at closing," which is considered a form of loan fraud. Nobody's alleging that here, but it's yet more evidence -- if more were needed -- that Fox was a highly motivated seller and that the McCourts got one hell of a deal.
So what does this have to do with who owns the team? Not much, and Gordon seemed impatient to move along.
One of the highlights of the day was the trash talk at the postgame press conference.
|David Boies meets the press|
When it was Boies' turn in front of the cameras, he also challenged Susman to ask a question: "I don't think he can dare have his client get on the stand and testify in response to this question," Boies said.
Asked what he thought Frank would do on Thursday, Boies said: "Maybe he'll just run for cover."
So, at least they're having fun.
Updated at 10:42 p.m.
Full McCourt coverage:
Week 1 Wrap-Up:
The Screaming Meanie
Even more McCourt:
L.A. Weekly cover story, Dodger Dog, from August