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LA Dodgers File For Bankruptcy
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 baseball 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 McCourt's 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 onto the team, and this is likely to meet with the same lack of success all his other moves have had."
For instance, Ganis says the $150 million in financing includes more than ten percent interest. Compare that to last year's Texas Rangers bankruptcy case, with interest in the 3.5-4.5 percent range.
"Obviously the entity that's providing financing feels they're taking quite a bit of risk here," he says.
It's something the bankruptcy judge will take into account when deciding whether or not to approve the financing plan, Ganis says. He expects baseball to contest the bankruptcy filing.