Clayton Kershaw Extension Leak Miffs Kid K. What’s Really Going On With Guggenheim?

Okay Dodger fans.  Let’s have some real talk here, because I’ve talked about a couple issues this week.  The Dodgers front office and PR staff, in response to things released in the press, have turned around and tried to spin things positive.  While I have presented to you the loss of nearly a billion dollars off the T.V. deal, soon after that, the Dodgers were spinning to the media (as if the loss of a billion dollars wasn’t a big deal) that there was still “over $6 billion” coming in from the T.V. Deal.

Now, we learn that Clayton Kershaw is “miffed” that the team leaked out details of negotiations that were in place to keep him in Los Angeles because a condition of him continuing negotiations during the season was apparently that the negotiations would not be talked about in the press. And Kershaw is blaming the Dodger organization for this leak.

Clayton Kershaw is in line to get the richest contract signed by a pitcher in Major League History, but calls the leak of contract negotiations with the Los Angeles Dodgers a “distraction.” (Image source: Los Angeles Times at http://www.trbimg.com/img-51be613a/turbine/la-sp-0617-dodgers-notes-20130617-001/600)

The linked L.A. Times article tells the story, but here’s Kershaw’s quote on the situation.

“I think the reason we’ve been able to continue discussions for this long is that it’s not been talked about,” Kershaw said. “And now that I’m having to talk about it, it’s a distraction because people are talking about it. I guess you’ll have to talk to the Dodgers as to why it came out now. I don’t love the fact that I have to talk about it.”  (Source: Los Angeles Times)

Folks, let me remind you of something.  A billion dollars is a billion dollars.  Over 20 years, that’s $50 million a year.  That is not a pittance, and while the T.V. deal remains very rich, there looms the issue of Frank McCourt continuing to sit on land.  Land with high value.  Land which he can effectively hold hostage.  Sure, there is a clause where Frank McCourt can cash in his share of the land for $150 million.  I have to ask you, the fan reading this blog: why would Frank McCourt sell low?  He has already bilked the Guggenheim group out of $2 billion.  He’s used Guggenheim to finance his debt, make him a Billionaire, and if new documents spell everything out accurately, he could make another billion off this purchase.

There is no simpler way to put this folks.  Frank McCourt and the Guggenheim Partners are business partners.  And if you think there’s just one rat involved in business partnership with Guggenheim, consider for a second that this is a company that is currently under SEC investigation (that’s the Securities Exchange Commision, folks, that’s some serious FEDERAL power there) because of dealings with one Michael Milken.

One-time Savings and Loan Scandal figure and Junk Bonds White Collar Crook Michael Milken has been tied to the Guggenheim Group, which is facing investigations from the Securities Exchange Commission. (Image Source: Fortune Magazine at http://fortunewallstreet.files.wordpress.com/2013/02/michael-milken.jpg?w=620&h=348)

Yes.  THAT Michael Milken.  Anyone who lost a lot of money in the Junk Bond and Savings and Loan scandals of the 1980’s should be very familiar with who Michael Milken is. And anyone who was paying attention in 1997, when News Corp. was in negotiations with the O’Malleys to purchase the team, know that this isn’t even the first time that Milken’s name has been associated with the Dodgers.

I have to ask Dodger fans, and fans of the game of baseball in general.  Why is Michael Milken, a convicted securities trade felon, a person who has done a great deal of financial damage and paid nearly a BILLION dollars in fines for his wrongdoings financially in the past, anywhere near the Los Angeles Dodgers?  Why is he around anything having to do with finance, for that matter?

I’d like to briefly recap what we’ve talked about the past week.

First, there were issues with the television deal and, potentially, the team’s equity.  While the team attempted to spin this as a positive through spokespeople at Guggenheim, the reality remains that the amount the franchise will benefit from the deal has reduced. The talk is that there is “more where that came from,” but how long can Guggenheim pull money out of peoples’ insurance and other investments and put them into the Dodgers before the combined black marks on the organization cause people to start pulling their money out of Guggenheim and the companies that do business with it? Having a reputation for doing business with people like Michael Milken and Frank McCourt cannot possible inspire investor confidence. Especially when one considers this quote from the Forbes article: “With about $1.6 billion of debt and insurance company money used to buy the team, and the highest opening day payroll in baseball, getting additional equity may be the best way out for owners Mark Walter, Stan Kasten and Magic Johnson.”

Then, there was the release of the documents that spell out the actual deal between Frank McCourt and Guggenehim. A startling revelation, and considering the cut into the T.V. deal, the fact that it might take even more money to get rid of Frank McCourt has to be concerning to a fan base that already fought hard to get him out of the owner’s box.

Now, as we’ve talked about here, we have discussion of a deal with Clayton Kershaw being leaked in the midst of the off-field chaos which could potentially damage the chances that the team has in retaining the 25 year old phenom who has drawn comparisons to such franchise greats as Sandy Koufax and Orel Hershiser and who, even at this early stage of his career, is frequently talked about as a potential future Hall of Famer.

Los Angeles.  Do I have your attention?  McCourt Must Go.  Milken Must Go.  And if the Guggenheim Partnership cannot divest themselves of these men, then perhaps Mark Walter and Company should consider divesting themselves of the Dodgers.  The fans have responded to the Call To Action once.  If necessary, the fans will respond to the call again.

Jesse Delgado works the bullhorn while fans hold up signs and chant in protest of Frank McCourt at Sunset and Elysian Park in June of 2011. As the stadium sat mostly empty, cameras panned to the protest and the severity of the ownership situation became a national topic on the Fox Game of the Week. The fans have organized before. If Guggenheim Partners continue to insist on lacking transparency, it is possible that the fan movements could rise once again. (Image source: https://lh3.googleusercontent.com/-9b68v8GB3RE/Thk6j5diwxI/AAAAAAAAS8E/qgPzPw9hVR0/boycott_mccourt_sm.jpg)
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