What’s the next chapter in the history of the Los Angeles Dodgers? Chapter 11! It’s true. The Dodgers filed for bankruptcy this morning. Owner Frank McCourt blames baseball commissioner Bud Selig and MLB in general. No matter who’s to blame, this is a “major league embarrassment” to one of baseball’s oldest teams!
(Courtesy of CNBC)
The Los Angeles Dodgers have filed for bankruptcy protection in a Delaware court.
Dodgers owner Frank McCourt cited Major League Baseball Commissioner Bud Selig’s interference with club operations and his refusal to approve a Dodgers TV deal with Fox Sports as the cause for Monday’s bankruptcy filing.
In a news release, the team said Chapter 11 bankruptcy protection will provide the Dodgers with a process to address its immediate financing requirements and obtain the capital necessary to ensure the baseball franchise’s long-term financial stability.
McCourt said the Dodgers have tried for almost a year to have Selig approve the Fox transaction, saying it would make the Dodgers one of the strongest capitalized franchises in Major League Baseball.
Monday’s filing marked a dramatic attempt by Dodgers owner Frank McCourt to keep the league from seizing the storied team, which he has owned since 2004. McCourt has been struggling to meet payroll and other financial commitments, having been heavily in debt and locked in a bitter divorce battle with his estranged wife Jamie.
On June 20, the league vetoed a proposed $3 billion, 17-year television contract with News Corp’s Fox Network, saying it would not be in the best interests of the Dodgers, the game and fans. The contract included a $385 million upfront payment that McCourt has said was crucial to the Dodgers’ financial health.
“We brought the commissioner a media rights deal that would have solved the cash flow challenge I presented to him a year ago,” McCourt said in a statement. “Yet he’s turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today.”
Patrick Courtney, a spokesman for Major League Baseball, had no immediate comment.
Baseball took over day-to-day control of the Dodgers in April amid worries about the the team’s finances as well as security concerns after a brutal Opening Day beating of a San Francisco Giants fan in the Dodger Stadium parking lot.
Dodgers Plan to Make Payroll
Monday’s filing punctuated a stunning fall for one of baseball’s marquee teams, whose roots date to 1884 when it played in New York as the Brooklyn Atlantics.
The team’s name became the Dodgers permanently in 1932, and moved to Los Angeles in 1958.
Its Chapter 11 filing in the U.S. bankruptcy court in Delaware shows between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities.
Four other entities also filed for protection from creditors, including one that owns Dodger Stadium.
The team said it had arranged $150 million of financing so that it can operate normally while in bankruptcy, including paying employees and vendors.
According to the filing, the team’s largest unsecured creditors include former Dodger players Manny Ramirez, who is now retired, and Andruw Jones, who now plays for the New York Yankees.
Lawyers for the McCourts on June 17 said the couple had resolved all issues in their divorce, except for ownership of the Dodgers.
Los Angeles Superior Court Judge Scott Gordon scheduled a one-day trial in August to decide whether the Dodgers belong to Frank McCourt or should be divided between him and Jamie McCourt.