Dodgers' ownership at stake in McCourt fight

By Bill Shaikin

Oct. 28, 2009 12 AM PT

The battle for Los Angeles’ storied baseball team hit the courts Tuesday when former Dodgers chief executive Jamie McCourt filed a divorce petition laying claim to half of the team and other assets she valued at more than $1 billion.

In the petition, filed in Los Angeles County Superior Court, Jamie McCourt claimed irreconcilable differences and asked for immediate reinstatement to the job from which her husband, Frank, fired her a week ago.

Frank McCourt countered with his own filing, asking the court to declare him the sole owner of the team at once, then handle the larger divorce case later.

The filings publicly revealed a power struggle months in the making and far from over. And it promised to feed gossip sites and Dodgers fans with salacious details of the Los Angeles power elite.

Jamie McCourt portrayed the couple as reveling in an extravagant lifestyle, including $400 dinners and $5,000 hotel rooms. She is asking the court for $487,634 in monthly spousal support if she does not return to her job and $320,967 if she does. That amount, she said, would cover, among other things, unlimited travel expenses, access to private jets, money to cover hair and makeup for Dodgers events and access to postseason games, even if the Dodgers are not playing.

In her filing, Jamie McCourt says that she and her husband typically dined out at expensive restaurants four to five times a week and traveled frequently, “always first class. Many of our travel costs are paid by the Dodger entities.”

She estimated the net worth of the couple at $1.2 billion and the value of the Dodgers, including the stadium and surrounding real estate, at $800 million. If the court rules the team is community property and the parties decided they could no longer work together, the McCourts might have to sell the team if neither one can raise the money to buy out the other.

The fate of the franchise could rest on the validity of a document the McCourts signed five years ago.

On March 31, 2004, two months after the purchase of the Dodgers, the McCourts entered into an agreement that provided Frank with sole ownership of the team and other business interests and provided Jamie with sole ownership of eight residential properties as well as artwork, jewelry, cars and boats, according to the filing.

Frank McCourt alleges that the possibility of significant and ongoing losses compelled Jamie McCourt to ask that the couple’s residential assets be put solely in her name, so that they could be protected from any claims that creditors might place against Frank McCourt or against the Dodgers, according to the filing.

Their assets include two homes in Holmby Hills, two beachfront homes in Malibu and an estate in Cape Cod, a second home in Massachusetts, a condominium in Vail, ranch property in Montana and property in Cabo San Lucas. Jamie McCourt says they paid more than $110 million for the properties.

The Dodgers reported losses of $57 million in 2000, $85 million in 2001, $83 million in 2002 and $78 million in 2003, according to the court papers filed by Frank McCourt. The McCourts themselves have not disclosed how the club has performed financially since assuming control in 2004.

This marital property agreement, Frank McCourt argues, was drafted to supersede California’s community property law, under which assets accumulated during a marriage are split 50-50 in a divorce.

Jamie McCourt contends she never retained an independent lawyer to review that agreement -- although papers filed by Frank McCourt show the lawyer who drafted the agreement recommended each party do so -- and said she signed without being aware that the document would “transfer the bulk of our assets to Frank.”

Bert Fields, an attorney for Jamie McCourt, claimed that Frank McCourt said as recently as 2008 that he did not intend the document to bar his wife from ownership. Fields called the agreement “unconscionable,” and argued she had no reason to distrust her husband by not signing the agreement as presented in 2004.

“It’s not like this is a stranger,” said Fields. “This is a document her husband of 25 years gave her.”

Marshall Grossman, an attorney for Frank McCourt, noted that Jamie McCourt has practiced law, including family law.

“Jamie McCourt saying she didn’t understand what she signed is like John Hancock saying he didn’t understand the Declaration of Independence when he signed it,” Grossman said.

Frank McCourt further argues that Jamie McCourt never was approved by Major League Baseball as an owner and never sought any such approval. On April 13, in her capacity as the Dodgers’ chief executive, she signed and submitted a routine statement of club ownership to MLB, in which she verified that Frank McCourt owned 100% of the team, according to his filing.

The McCourts purchased the club for $431 million in 2004, in a heavily leveraged deal that had fans wondering if the team could afford to pay top dollar for top players.

In her filing, Jamie McCourt alleges Frank McCourt has not provided her with information about what she calls “efforts to obtain new financing for the Dodgers.”

“I am concerned about his financial mismanagement of the Dodgers,” she claims.

She said she had been paid an annual salary of $2 million before her termination. She said she believed Frank McCourt received “in excess of $5 million to $6 million a year.”

Jamie McCourt claims she was actively involved in the ownership and management of the team from day one, detailing her involvement in executive meetings, hiring and planning decisions, and marketing and community relations initiatives.

“I was the face of the Dodgers,” she claims.

As this season proceeded, she alleges that she was “systematically excluded from business or management decisions.”

Jamie McCourt also said in her lawsuit that Frank had stopped paying some of their living expenses as early as July 2008 and that was part of a calculated plan by her husband to “humiliate and ostracize” her.

She further claims that Frank McCourt and Dodgers President Dennis Mannion asked her to move her office out of Dodger Stadium, removed references to her from team publications and news releases and told media relations officials not to work with her or anyone in her office.

On Sept. 18, she said she filed a formal complaint with the Dodgers’ general counsel about what she called “this workplace harassment.”

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Maintaining her style

Jamie McCourt has asked the court to ensure that her share of perks remain in effect. Among those she seeks:

* Travel by private plane via Net Jets

* Five-star hotel accommodations

* Unlimited travel expenses

* Continued payment of private and country club fees

* Continued use of Suburban vehicle or transfer of title to same

* Parking spots immediately adjacent to the office doors at Dodger Stadium

* Security while traveling in dangerous locations