Sunday, October 25, 2009
I like sales of sports teams. It's one of the few times I can read the sports pages and still pretend to be working. That said, the pending divorce of Dodgers owner Frank McCourt from his wife, Jamie, is shaping up to be a drag-out battle over who will own the team. The LA Times is reporting that she is already lining up investors after having been fired from her position as the team's CEO.
The Dodgers Organization is set up as an LLC. Presumably they have some version of an "I cut-you choose" buyout clause in their operating agreement. There's a nice chapter in the Oxford Handbook of Political Economy on fair division, with plenty of cake cutting references. I cut-you choose buyout provisions turn out to be the simplest and fairest way to get parties, even parties who dislike each other to the point of divorce, to reveal their private valuations of hard to value assets like baseball teams. That's probably why they are so prevalent.