Dodgers Owner Files Bankruptcy To Fend Off MLB

Jun 27, 2011
Originally published on June 27, 2011 7:54 pm

The Los Angeles Dodgers have filed for Chapter 11 bankruptcy protection. Major League Baseball recently nixed a TV deal for the Dodgers that team owner Frank McCourt said would provide financial stability for the team. The bankruptcy filing appears to be a last-ditch effort by McCourt to keep the MLB from seizing the Dodgers — one of the most storied teams in sports.

Owner: MLB Forced Us To This Point

The official filing says McCourt has secured a commitment of $150 million in financing that will allow the Dodgers to continue to operate normally — all salaries paid, continued employee benefits and no rise in ticket prices.

A statement released on behalf of McCourt fires his latest salvo at baseball Commissioner Bud Selig, who turned down McCourt's proposed TV deal with Fox because it included $173 million diverted to McCourt, his wife, Jamie, and their attorneys. The McCourts have been involved in a nasty and expensive divorce.

In the statement, McCourt says of Selig, "He's turned his back on the Dodgers, treated us different, and forced us to the point we find ourselves in today."

'Nail In The Coffin'

That point is one of desperation, according to Marc Ganis, a sports business expert who runs SportsCorp Ltd.

"The formal rejection of the Fox Network deal was a nail in the coffin," Ganis says. "And he's trying to do everything he possibly can to hold on to the team; this is likely to meet with the same lack of success all his other moves have had."

Bankruptcy court is a venue where decisions can supersede the baseball commissioner's authority, but Ganis says McCourt's attempt to avoid Selig may not work.

"The bankruptcy court has every ability, by the motions that I expect baseball will file, to remove it out of bankruptcy court and turn it over to Major League Baseball," he says.

A baseball official said Monday, "We'll be in court tomorrow for the initial McCourt hearing." Selig said in a statement, "The action taken by Mr. McCourt does nothing but inflict further harm to this historic franchise."

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MELISSA BLOCK, Host:

The Los Angeles Dodgers have filed for Chapter 11 bankruptcy protection. Major League Baseball recently nixed a TV deal that owner Frank McCourt said would stabilize the team's shaky finances. NPR's Tom Goldman reports that today's filing appears to be a last-ditch effort by McCourt to keep baseball from seizing one of the most storied teams in all of sports.

TOM GOLDMAN: That point is one of desperation, says Marc Ganis. He's a sports business expert who runs SportsCorp Ltd.

MARC GANIS: The formal rejection of the Fox Network deal was a nail in the coffin. And he's trying to do everything he possibly can to hold onto the team. This is likely to meet with the same lack of success all his other moves have had.

GOLDMAN: For example, Ganis says the $150 million in financing includes more than 10-percent interest. Compare that to last year's Texas Rangers bankruptcy case with interest in the three-and-a-half to four-and-a-half percent range.

GANIS: So obviously the entity that's providing financing feels they're taking quite a bit of risk here.

GOLDMAN: It is the latest twist in a saga that's battered the Dodgers' sterling reputation. Under the long-time ownership of the O'Malley family, the franchise was considered a model, with great moments etched in baseball history.

(SOUNDBITE OF BASEBALL GAMES)

BLOCK: Sandy into his windup. Here's the pitch. Swung on and missed. A perfect game.

BLOCK: Unidentified Man #3: Fast ball, hit in the air to right center and deep. Back goes Gwynn on the track at the wall. Gone, home run Ramirez...

GOLDMAN: One-time Dodger Manny Ramirez was the quirky power-hitter who suddenly retired from baseball this year rather than face another drug suspension, and he provides the irony of the day. In the court filing, Ramirez is listed as the team's largest unsecured creditor, owed a reported $21 million, wherever he is.

MELISSA BLOCK, host:

The Los Angeles Dodgers have filed for Chapter 11 bankruptcy protection. Major League Baseball recently nixed a TV deal that owner Frank McCourt said would stabilize the team's shaky finances. NPR's Tom Goldman reports that today's filing appears to be a last-ditch effort by McCourt to keep baseball from seizing one of the most storied teams in all of sports.

TOM GOLDMAN: The bankruptcy court filing says Frank McCourt has secured a commitment of $150 million in financing that will allow the Dodgers to continue to operate in the ordinary course of business: all salaries paid, employee benefits to continue, ticket prices stay the same.

A statement released on behalf of McCourt fires his latest salvo at baseball commissioner Bud Selig, who turned down McCourt's proposed TV deal with Fox because it included $173 million diverted to McCourt, his wife Jamie and their attorneys. The McCourts have been involved in a nasty and expensive divorce.

In the statement, Frank McCourt says of Selig, quote, "he's turned his back on the Dodgers, treated us differently and forced us to the point we find ourselves in today," end quote.

That point is one of desperation, says Marc Ganis. He's a sports business expert who runs SportsCorp Ltd.

Mr. MARC GANIS (SportsCorp Ltd.): The formal rejection of the Fox Network deal was a nail in the coffin. And he's trying to do everything he possibly can to hold onto the team. This is likely to meet with the same lack of success all his other moves have had.

GOLDMAN: Bankruptcy court is a venue where decisions can supersede the baseball commissioner's authority, but Ganis says McCourt's attempt to avoid Bud Selig may not work.

Mr. GANIS: The bankruptcy court has every ability by the motions that I expect baseball will file to remove it out of bankruptcy court and turn it over to Major League Baseball.

GOLDMAN: A baseball official said Monday, we'll be in court tomorrow for the initial McCourt hearing. Selig said in a statement the action taken by Mr. McCourt does nothing but inflict further harm to this historic franchise.

Indeed, it is the latest twist in a saga that's battered the Dodgers' sterling reputation. Under the longtime ownership of the O'Malley family, the franchise was considered a model, with great moments etched in baseball history.

(Soundbite of baseball games)

Unidentified Man #1: Sandy into his windup. Here's the pitch. Swung on and missed. A perfect game.

Unidentified Man #2: I don't believe what I just saw: One of the most remarkable finishes to any World Series game, a one-handed home run by Kirk Gibson and...

Unidentified Man #3: Fast ball, hit in the air to right center and deep. Back goes Gwynn on the track at the wall. Gone, home run Ramirez...

GOLDMAN: One-time Dodger Manny Ramirez was the quirky power-hitter who suddenly retired from baseball this year rather than face another drug suspension, and he provides the irony of the day. In the court filing, Ramirez is listed as the team's largest unsecured creditor, owed a reported $21 million, wherever he is.

Tom Goldman, NPR News. Transcript provided by NPR, Copyright NPR.