The Los Angeles Dodgers have filed for bankruptcy protection in Delaware and is citing Commissioner Bud Selig and Major League Baseball as the reason it's broke. They are claiming empty pockets due to MLB refusing to approve a multibillion-dollar TV deal that owner Frank McCourt was counting on to keep the troubled team afloat.
Commissioner Selig announced last week that he wouldn't approve a Dodgers television deal with Fox Sports that reportedly was worth up to $3 billion and left McCourt in the unenviable position of not being able to meet payroll.
"The Dodgers have delivered time and again since I became owner, and that's been good for baseball," McCourt said in defense of his running of the team. "We turned the team around financially after years of annual losses before I purchased the team. We invested $150 million in the stadium. We've had excellent on-field performance, including playoff appearances four times in seven years.
"And we brought the Commissioner a media rights deal that would have solved the cash flow challenge I presented to him a year ago, when his leadership team called us a 'model franchise.' Yet he's turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today. I simply cannot allow the Commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer. It is my hope that the Chapter 11 process will create a fair and constructive environment to get done what we couldn't achieve with the Commissioner directly."
In filing for Chapter 11 relief, the Dodgers are able to use $150 million dollars for daily operations. More importantly, however, it buys them time to seek a media deal and ensure the team's long-term financial stability.
"He's clearly running very low on options right now," said David Carter, executive director of USC Sports Business Institute, on McCourts filing. "What seems to be the case is a high-stakes chess game between Frank McCourt and MLB, and he's running out of pieces. This is one of the uglier weeks in Dodger history."
With MLB breathing down his neck, McCourt also has to deal with his ex-wife, Jamie McCourt, who was expecting to receive a large check from this TV deal as a vital part of the McCourt's settlement agreement. Jamie McCourt was the Dodgers CEO and owns half the team under California's community property law.
"She is exasperated," the source said. "She has been trying to settle this for two years now, most recently by asking the judge to sell the team. She recognizes that a sale is best for the community but Frank refuses to let this go."
It's one thing to have to deal with an organization but to have an ex on top of it, well, it's not a good time to be Frank McCourt. The Dodgers current tv deal is set to expire in 2013.
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