We are still talking about the most recent hearing in the Frank and Jamie McCourt divorce. The couple made headlines for months in 2010 — and 2011, 2012 and now 2013 — as they argued over the ownership of the Dodgers baseball team. At the heart of the dispute was a drafting error: The couple signed different versions of the post-nuptial agreement when Frank purchased the team. It was up to the court to determine whether either version was valid.
In the end, Jamie McCourt agreed to take $131 million in exchange for any claims to the team, and the property division was complete. For a while.
By law, a spouse who deliberately hides assets in a divorce or intentionally fails to disclose any financial information during a divorce is committing fraud. Jamie accused Frank of withholding information about the Dodgers at the time they settled, but it was not so much solid information as it was an idea. And ideas are a little harder to quantify.
The Dodgers were in bankrtupcy when the McCourts signed the settlement agreement. According to Jamie, though, Frank was thinking about the team’s regional sports network, or RSN.
While we will not be getting into a long explanation of sports marketing, we do want to offer a little bit of background. RSNs are cable stations that televise local professional and collegiate sports. Back in the day, a local channel would carry all the home team’s games. When cable came in, large networks, like Fox Sports, would buy up the broadcast rights.
Over time, though, local sports franchises started to team up with local cable stations, granting them the exclusive rights to broadcast every game. According to an article in the New York Times, RSNs have become “money printing operations.” In 2010, the paper says, the average RSN raked in $137.8 million a year.
As the McCourts battled over the rights to the Dodgers, Frank’s personal finances became entangled with the team’s and with Major League Baseball’s. The Dodgers had an RSN already, but the team was troubled — but the RSN contract was up in 2013. Again according to the Times, Frank asked himself what would happen down the road when that contract was up. Maybe, just maybe, there would be a way to sign an even more profitable deal with a new RSN.
To be continued ….
Sources:
Los Angeles Times, “Frank McCourt attorney: Judge should have no patience with Jamie,” Bill Shaikin, April 24, 2013
The New York Times, “Regional Sports Networks Show the Money,” Richard Sandomir, August 19, 2011
