Is the Dodgers Era of Unlimited Financial Resources Ending?

[Corbi296]

If you have not been paying attention to the problems that triggered Dodgers controlling owner Mark Walter's surprise sale of the Lakers after only one year of ownership, you should. The problems are serious and involve an FBI investigation into the business dealings of his insurance arm and some very pissed off bankers who are demanding that he raise cash to pay back some of their loans. Bottom line, it looks like Walter was using his insurance arm to support his investments in the sports teams to a much larger degree than was thought without properly disclosing it. All of this is triggering a liquidity crunch and the need to sell the Lakers to raise cash. It's not clear if at some point he'll also have to sell the Dodgers but at a minimum it's clear they will not have the financial resources going forward that they previously had because they won't be able to use Walter's Insurance arm as their liquidity piggy bank. Bad news for the Dodgers but I think good news for the rest of baseball. 

Mark Walter Dangled Guggenheim Stake To Quickly Secure Loans.html

[Corbi296]

Some additional reporting on the matter. This is snowballing quickly and I think it is possible this may ultimately lead to a sale of the Dodgers. Regardless, I do think this signals the end of the Dodgers having what appeared to be unlimited financial resources at their disposal. I'm not saying they will become the Pirates all of a sudden, but I don't think you'll see them hand out exorbitant contracts to the relievers they did a few years back or to guys they don't really need like Kyle Tucker a year ago. I also think they may have to dump some contracts this offseason, which will be interesting to see if they can given the prospects for a lockout. It will be interesting to see how this news impacts the collective bargaining negotiations as I think it can be argued that the Dodgers will no longer behave in the outlier manner that was part of the impetus from the rest of the owners to implement a salary cap.

 

 

[Rex Buckingham]

I will believe that real punishment comes for a super-rich person when I see it.  Don't get me wrong, I hope it does, but the world we live in today is full of super-rich (or super-powerful) people doing whatever they want and getting away with it all the time

[Corbi296]

21 hours ago, Rex Buckingham said:

I will believe that real punishment comes for a super-rich person when I see it.  Don't get me wrong, I hope it does, but the world we live in today is full of super-rich (or super-powerful) people doing whatever they want and getting away with it all the time

With this administration in charge, I agree that his legal issues can probably be fixed with a $25mm contribution to Trump's super PAC. That's not Walter's and the Dodgers main problem right now. His Bankers are super pissed about the deception and are forcing him to unwind all these "loans" that were made by his Insurance companies to "related entities". That's the piggy bank that partially financed the Dodgers spending spree since he purchased them. So not only will those resources not be available going forward, he has to raise cash to unwind those investments. He is desperate for cash right now. That's why he had to sell the Lakers and also why he is now rumored to have put his ownership stake in the Chelsea soccer club on the market. I doubt he will need to sell the Dodgers but they will now have a budget, which was not the case before. My guess is that they won't be able to sign Skubal and will also be looking to dump contracts. Good luck trying to get rid of Tucker's albatross contract.

[ILMindState]