MLB Attempting to Force Sale of Dodgers
Written by playerpress.com, Wednesday September 28 2011
The battle between Major League Baseball (MLB) and Los Angeles Dodgers owner Frank McCourt rages on, with the stakes now getting higher. In June, McCourt filed for Chapter 11 protection because the league wouldn’t allow him to sign a $3 billion television broadcasting deal with Fox TV. He said that has led to the club’s financial woes and was the reason he filed for bankruptcy.
However, MLB said it didn’t want McCourt to sign a deal with Fox because some of the money was going to be used by him personally instead of being earmarked for the team. On Sept. 23 the league asked a bankruptcy court to force McCourt to sell the storied franchise and several other assets that are associated with it, such as Dodger Stadium and some surrounding land.
MLB wants the court to approve a quick sale of the team instead of letting McCourt try to work out some type of financial deal with somebody that would enable him to keep control of it. McCourt was granted a certain amount of time by the court earlier in the summer to try and reorganize his finances, but the league wants the court to terminate that agreement.
If McCourt had been allowed to sign the extension deal with Fox it’s likely that everything would have worked out fine a few months ago. That contract would have given McCourt a total amount of $385 million upfront, which could have been used to pay off debts and cover the club’s payroll. But MLB found out that $173.5 million was supposed to go to McCourt so he could take care of his sky-high legal fees which were the result of a divorce from his former wife.
Currently, Fox has an exclusive deal with the Dodgers to broadcast their games and it doesn’t expire until 2013. Negotiations with the Dodgers to extend that contract aren’t supposed to take place until Nov. 30, 2012. Of course, Fox doesn’t want to see the team’s media rights auctioned off and has said they’ll sue if they have to as a way to make sure they keep the rights to Dodgers games.
In the motion that was filed by MLB on Sept. 23, the league said they don’t have any intention of approving a sale of the Dodgers media rights. It even went as far to say that the franchise could possibly be expelled from the league if any sale is attempted without its approval.
The Dodgers responded to the league’s action of Sept. 23 by calling it meritless and plan on filing a response to it in court shortly. The club added that the league’s actions are unnecessary will destroy the value of the club if it forces it to be sold.
It’ll be interesting to see how all of this pans out and to see how much power sports leagues have over the individual franchises that belong to them. MLB has basically said they won’t approve any type of media deal involving the Dodgers. This will make it almost impossible for McCourt to pull the team out of bankruptcy.
The courts may take a harsh view of MLB’s action since it appears they want to call all of the shots instead of letting the bankruptcy courts do their job. We’ll find out more on Oct. 12 when the next hearing is scheduled to take place.
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