The Los Angeles Dodgers’ Troubles Extend to their Foundation

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April 21, 2011; Source: The Biz of Baseball | The very messy divorce of Frank and Jamie McCourt is revealing details about the finances of the Los Angeles Dodgers, owned by the McCourts, that has nearly all observers aghast – and has prompted Major League Baseball to take over the management of the team. Among the details are hundreds of millions of dollars of debt, indications that the McCourts (both of them) took nine figures worth of Dodgers funding for themselves, hired McCourt family members for well-paid, no-show jobs, and much more. The IRS is as interested in the serial financial revelations as are the pair’s undoubtedly salivating divorce lawyers.

Is there a nonprofit or foundation aspect of the story? You betcha!

The California Attorney General is looking at the Dream Foundation of the Dodgers to see how Howard Sunkin, vice president for public affairs of the team, was also paid $400,000 to run the Dream Foundation. Both positions were indicated as full-time. Last week, the vice chair of the Dodgers, Steve Soboroff, revealed that the team quietly repaid Sunkin’s $400,000 salary back to the Foundation, though that hasn’t deterred the AG from taking a look-see.

Taken on its own, Sunkin’s $400,000 was one-fourth of the foundation’s entire $1.6 million budget in 2007. Reimbursing the foundation might have been Soboroff’s first big action as vice chairman, assuming that the MLB takeover doesn’t force him and his colleagues out, since one of Soboroff’s charges is "strengthening ties to the region’s community and philanthropic organizations." This is something he ought to have been well suited for as a former aide to former Los Angeles mayor and philanthropist Richard Riordan and current board chairman of the Weingart Foundation

Soboroff was quoted as saying, "Philanthropically, the Dodgers can leverage this incredible brand to help people all over Los Angeles. They’ve been doing a good job. Now they’ve had a hiccup, and now we’re going to look forward and just start and not have any more hiccups."

It is unclear how a baseball team in huge turmoil and massive debt can leverage an incredible brand or that a foundation that pays its exec one-fourth of its expenditures can be seen as doing a good job minus a hiccup. Will the Dodgers’ indebtedness, rumored to be around $400 million, or the possibility that the McCourts might have to repay the team what they may have inappropriately taken for themselves – over $100 million – take a toll on the team’s “philanthropic brand?”—Rick Cohen