McCourt and His Millions
McCourt wealth has complex roots
Published: Friday, September 20, 2013
Updated: Friday, September 20, 2013 13:09
Many at Georgetown were introduced to Frank McCourt Jr. (CAS ’75) through his record donation to the university this week, yet this staggering generosity also prompts curiosity about the man and his money.
McCourt, who majored in economics at Georgetown — where he met his ex-wife Jamie McCourt (CAS ’75) — founded the McCourt Company in 1977, which specialized in real estate and construction, particularly with parking lots.
McCourt’s grandfather was a part-owner of the then-Boston Braves (now the Atlanta Braves baseball franchise), and Frank McCourt continued that tradition. He unsuccessfully attempted to buy the Boston Red Sox, the former Anaheim Angels and the Tampa Bay Buccaneers football team before acquiring the Los Angeles Dodgers for $430 million in 2004. McCourt took out a $205 million loan to buy the team and used his own South Boston property as collateral to finance the acquisition.
In order to balance the debt and increase the team’s viability, McCourt increased ticket and concession prices each year. By 2009, Forbes reported that the team’s assets had increased in value to $722 million, thanks to McCourt’s heavy investment in improvement, but the team had also become mired in $600 million of debt.
McCourt separated from his wife in 2009 and fired her as CEO of the Dodgers. Jamie McCourt, who had been the first female CEO of a Major League Baseball team, filed for divorce soon thereafter, leading to an expensive proceeding with the Dodgers in the middle.
McCourt accused his wife of having an affair with her driver and subsequently attempted to take sole ownership of the Dodgers by pointing to the couple’s post-nuptial marital property agreement. In 2010, however, a judge invalidated the agreement based on inconsistencies between various versions of the document.
McCourt then attempted to use other legal avenues to establish sole ownership, while Jamie McCourt continued to say that the team was community property. After two years of extensive and heavily publicized legal maneuvering, the McCourts reached a divorce settlement in 2011 in which Jamie McCourt received $131 million but relinquished her claim to the Dodgers in what The Los Angeles Times reported was the most costly divorce in California history.
This divorce, however, was not the end of McCourt’s legal and financial troubles.
In 2010, then-California Attorney General Jerry Brown investigated the Dodgers’ Dream Foundation, the team’s second-largest charity, for improper expenditures totaling $361,432 in 2007 and 2008. Based on tax returns, Brown found that the funds had been used primarily for the benefit of Jamie McCourt, as well as a bonus payment of approximately $240,000 to Dodgers executive Howard Sunkin.
According to Georgetown’s press release announcing the McCourt School for Public Policy, McCourt is still involved with ThinkCure!, the Dodgers’ largest charity, which raises money for cancer research.
Following reports in 2011 that McCourt had needed to obtain a personal loan in order to cover the team’s payroll for two months, MLB Commissioner Bud Selig appointed a representative to oversee Dodgers operations out of concern for the team’s finances. The Washington Post reported that league officials were also critical of McCourt’s ownership, and despite McCourt’s protests, pushed him to sell the team. The Dodgers officially filed for bankruptcy in June 2011 and were subsequently placed on the market.
The team was eventually sold for $2 billion in 2012 to a group consisting of former Los Angeles Laker Magic Johnson, former baseball executive Stan Kasten and financial services firm Guggenheim Partners — more than double what any MLB franchise had ever sold for. The land around the team’s stadium was also sold for $150 million to the same group, which inherits the team’s massive debt.
According to The Los Angeles Times, McCourt profited more than $1.2 billion from the sale, and Guggenheim Partners agreed to invest as much as $650 million in his investment fund.
McCourt still receives $7 million a year from Dodger Stadium parking lots.