Bud Selig: Lord of the Realm

Baseball has a standard line of credit teams can access to cover short term cash flow issues. But as the article points out, the Mets exhausted the limits of that, and Bud Selig apparently authorized additional funds for them without telling anyone. Does that strike anyone else as really crazy? After we just found out that Selig has basically signed Frank McCourt’s ownership death warrant (rightly, for what that’s worth) we’re also finding out that the commissioner is taking extraordinary steps to preserve his friend’s ownership of one of baseball’s most valuable franchises after they were embroiled in one of the most famous cases of criminal fraud in American history?

I suppose at the end of the day I don’t really care about this. The fortunes and travails of Frank McCourt and Fred Wilpon really aren’t important to me in any meaningful way, except in so much as I watch them as a baseball story and occasionally write about the developments. But really, on a personal level, there’s no real reason for me to care about who owns any team other than the Yankees. But on the other hand, this shows just how much arbitrary and capricious power the commissioner of baseball can exercise from time to time.

Ultimately though, I think the Times probably overestimates the degree to which the other owners will really be outraged by this. For better or worse, in most cases Selig has acted to preserve the interests of incumbent owners, and that obviously endears him to the owners to some degree. The McCourt situation isn’t much more than the exception that proves the rule, as Selig is in many ways protecting the franchise from the desperate gambit of a broke owner. It’s not pretty, but it is what it is, and given how much money has been made by everyone on Selig’s watch, I don’t really expect it to change anytime soon.

For better or worse, in Bud we trust.

6 thoughts on “Bud Selig: Lord of the Realm

  1. LarryAtIIATMS

    Brian, outstanding post!

    I think we SHOULD care about this story. I've been trying to self-inspire a sense of moral outrage about this, but haven't really succeeded yet.

    I'm reminded of the similar loan that Selig's office made last year to the Texas Rangers, which helped them afford their bump in payroll when they acquired Cliff Lee. Now, THAT was a decision that might have affected the Yankees — without that loan, maybe Lee comes to NY last summer, and resigns with NY last winter. Or maybe not. (I ALMOST felt a sense of outrage there.)

    Selig's power to make these loans affects every team's finances. From what I've read, Selig's loans have a super-priority status, meaning that a team is required to repay the Selig loans before they're required to pay other lenders (at some point, I have to figure out what gives Selig the power to transcend the usual rules governing commercial lending). So when Selig makes these loans, it undermines (even in a small way) the ability of other ballclubs to borrow in normal commercial channels. Lenders are understandably wary to lend funds to baseball teams, when Selig has the power to trump their loans with loans of his own.

    Nope. That didn't get me feeling much moral outrage, either.

    I really don't like Bud Selig. I don't like the fact that with only a few exceptions, the owners of MLB teams have ceded Selig something like dictatorial power over the game, in part because Selig hand-picked these owners in order to ensure that his power would not be challenged. But with a lockout impending at the NFL and one looming for the NBA, we can at least be happy that there's labor peace in baseball. If Selig did not possess the power he possesses, might a group of idiot MLB owners risk labor strife like what we're seeing in the NFL? Quite possibly.

    For better or worse, Brien? Have to agree.

    • I have trouble working up too much outrage without knowing the specifics of the deal. On the one hand, it's not in anyone's interest to have a team become insolvent, and on the other hand it's not like $25 million is going to bail out the Wilpon's ownership.

      Beyond that, it's sort of hard to argue too much with the job Selig's done from a business-of-baseball standpoint. Team values are through the roof, revenues are at all time highs, player salaries are up. Everyone's making money and everyone's pretty happy. I think it's hard to argue that any of the other sports' commissioner is obviously better at the job than Bud is.

    • The point about Selig playing games with The Game's money (not his, THE GAME) is potentially altering the landscape of competition… as Larry dutifully noted.

      I'm not exactly thrilled about this.

  2. billybeaneismyhero

    Great post Brien!

  3. Ben

    From a moral perspective, I think you've all been right in stating that it's hard to be outraged about this. It's to the discretion of MLB and Selig how they want to deal with money behind the scenes, whether it's right or not. What does bother me is this just seems to point to another reason why maybe it's time for Selig to go. It's not to say that the next comish won't show favoritism, but at what point do people really get tired of his antics over the years.

    • I think I'd withhold accusations of favoritism here for the time being, mostly because there's a big difference between the two situations. In the grand scheme of baseball money, a $25 million loan isn't necessarily a huge amount of money, and if it kept the Mets solvent in the short term it was probably not a huge deal. If, say, they can't find a minority owner and Selig gives them the equivalent of 25-30% of their franchise value that would be different, but obviously that isn't going to happen.

      McCourt's situation is, or was, much more severe. Basically he was trying to secure a $200 million loan from Fox (on top of the huge pile of debt he's already saddled the Dodgers with) using the Dodgers television rights as collateral. In the not unlikely event things went south and McCourt defaulted, Fox would get the right to broadcast Dodgers games at a bargain basement price, and that would severely impact the franchise's value, and potentially make it difficult to find a new owner in that term. In fact, it's not at all outside the realm of possibility that baseball would have to take the Dodgers over if that happened.

      So, in both the amount of money we're talking about and the nature of the situations at the time the decisions were made, the situations were simply too different to really get outraged about hypocrisy.

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