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Blog Entry

Why Tuesday was better for MLB than McCourt

Posted on: June 28, 2011 8:42 pm
Edited on: June 29, 2011 2:56 pm
 

The takeaway from baseball's date with the Dodgers in bankruptcy court Tuesday?

Major League Baseball is very happy with the way the day went, according to sources, for at least two very specific reasons:

-- Lawyers agreed to "delete" language ordering the auctioning of "media rights" (television contract) by a specific date that Frank McCourt is attempting to wangle as part of his financing agreement. In layman's terms, this for now prevents the bankruptcy judge from auctioning off a Dodgers television deal, which essentially would have allowed McCourt to go back door around Major League Baseball.

For now, the Commissioner's Office retains power to accept or to deny whatever media deals McCourt strikes. That is hugely important to MLB because it fears two things:

One, that McCourt is so desperate that he will wind up striking a television deal for below market value (the Dodgers' current television deal still has two more years remaining, that's how far out in front he's negotiating).

And two, that he will use the money from a new television deal to pay off some of his enormous debt (including ex-wife Jamie in their divorce), thus crippling the Dodgers further (and possibly an incoming new owner) because money that should be used for the team won't be there.

-- The deal struck Tuesday allows the Dodgers to draw an initial $60 million of a $150 million agreement with Highbridge Capital to maintain operations essentially for another month, until a July 20 hearing. This allows McCourt to meet this Thursday's payroll, among other things -- and, for baseball, means the other 29 owners will not have to pony up millions of dollars to cover the Dodgers' payroll for at least another month.

Without question, Tuesday's court proceedings were just one more round in what's become a blood bath between McCourt and MLB. Many rounds are left, and what nobody knows is how many more moves McCourt has left before he runs out of money and is squeezed out of the game.

To hear him tell it in meetings at Dodger Stadium, according to sources, he continues to think that he will find a way to retain the team.

Upon filing for bankruptcy early Monday morning in Delaware, one of McCourt's next moves was to bar MLB appointed "monitors" Tom Schieffer and John Allen from their Dodger Stadium offices.

Next? MLB is expected to take steps toward seizing the Dodgers, a right available to baseball as part of the game's constitution. According to the constitution, the commissioner can take the liberty of seizing any club that enters Chapter 11 bankruptcy protection.

Procedurally, MLB must first file a motion seeking termination of the franchise, which a source told the Associated Press is "probably going to happen."

Exactly when is not yet clear.

What is clear is, Tuesday's day in bankruptcy court extended, however briefly, the financially suffocating McCourt's grip on the franchise. But his status as an owner remains on life support.

Comments

Since: Dec 2, 2011
Posted on: December 5, 2011 11:50 am
 

Why Tuesday was better for MLB than McCourt

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Since: Aug 18, 2009
Posted on: June 29, 2011 12:46 pm
 

Why Tuesday was better for MLB than McCourt

Scott,  What would you think of someone who writes for a living and doesn't know how to spell Delaware, or how to use spell check?



Since: Jul 9, 2009
Posted on: June 29, 2011 11:38 am
 

Why Tuesday was better for MLB than McCourt

Maybe, Koufax32, but you'll still have to get past my Phillies!  But in the meantime, do us all a favor and knock out the Midgets, will you?  That would give me great pleasure.  Thanks!



Since: Feb 18, 2008
Posted on: June 29, 2011 11:35 am
 

Why Tuesday was better for MLB than McCourt

This from a Reds fan:  There is little reason why the Dodgers should not be close to or even equal to the level of the Red Sox & Yankees ... annually.  They have the tradition, large market, attractive location for free agents, and SHOULD have the money to spend to have top-tier facilities and player pay packages.  However, mostly due to their ... uh ... "management," they struggle to make the playoffs, and haven't done much when they have in the last 20+ years (6 appearances - 2 series wins, with 6 losses).

I used to be of the mindset that the Yankees' and Red Sox's ways of spending was bad for the game.  However, I have changed my mind:  The game doesn't need fewer "Yankees" and "Red Sox," it needs more franchises like them that settle for nothing but the best that they can possibly be ... using ALL available resources ... even thinking outside the box as necessary.  Much like Tiger Woods elevated the entire game of golf, so would a much better run Dodgers organization elevate all of MLB.

All that to say this:  Not just the Dodgers, but all of MLB would be better off with the Dodgers in the hands of someone more financially and organizationally (oh, and legally) competent that Frank McCourt.




Since: Sep 16, 2009
Posted on: June 29, 2011 9:28 am
 

Why Tuesday was better for MLB than McCourt

Just think that with all the money that McCourt has been taking instead of putting back into the team the Dodgers will still a series win away from the World Series twice just a couple years ago. If the Dodgers had been owned by anyone willing to spend on the team we could have been on the World Series doorstep for years to come. Now it seems like a very distant memory.



Since: Jul 9, 2009
Posted on: June 29, 2011 1:32 am
 

Why Tuesday was better for MLB than McCourt

Zooey--It probably means, in effect, terminating McCourt's right to ownership of the club, or at least the right to exercise any ownership of it.  Of course one of the usual rights of ownership is the right to sell it--and apparently MLB (if allowed to do so by the bankruptcy court) would exercise the right to sell McCourt's shares on his behalf.  That is, they would find a buyer at an appropriate price, turn the shares over to that person, and turn the proceeds of the sale over to McCourt--or to whomever the divorce court deems to be entitled to the proceeds (i.e., McCourt or his ex-wife, or some combination thereof).  Maybe MLB could deduct some money from the proceeds for certain expenses, I don't know.



Since: Apr 16, 2009
Posted on: June 29, 2011 12:17 am
 

Why Tuesday was better for MLB than McCourt

MLB is expected to take steps toward seizing the Dodgers, a right available to baseball as part of the game's constitution. According to the constitution, the commissioner can take the liberty of seizing any club that enters Chapter 11 bankruptcy protection.

Procedurally, MLB must first file a motion seeking termination of the franchise, which a source told the Associated Press is "probably going to happen."

I've read this in a few sources, and I'd like to know what "terminating the franchise" means, exactly.



Since: Jul 9, 2009
Posted on: June 28, 2011 11:38 pm
 

Why Tuesday was better for MLB than McCourt

Several observations:

1. All along, McCourt's been saying that the only way the club could continue in operation was for the new Fox TV deal to be approved--as if he couldn't get any money elsewhere.  Well, now it turns out that that wasn't true.  He has now gotten money elsewhere.

2.  Is the money they're getting from the hedge fund going to be used strictly for the Dodgers, or is some of it going to go to McCourt and his own associates, attorneys, etc.?  If just to the Dodgers, that's pretty much what MLB had been asking all along, wasn't it?

3. Seems to me that if McCourt is blocking Schieffer et al. from their Dodger Stadium offices as the article says, MLB may have to quickly request an injunction or something to bar McCourt from continuing to do that.  At least if they're serious about wanting to maintain that degree of control over the team. 

4. MLB may have the right to "seize" the team under the MLB constitution, but of course bankruptcy court has the last word on that.  Still, it's the Dodgers who are in bankruptcy court as the debtor, not McCourt, so it's possible the court won't be inclined to void any contract to the extent it's between MLB and McCourt--as opposed to between MLB and the Dodgers.




Since: Feb 28, 2011
Posted on: June 28, 2011 10:54 pm
 

Why Tuesday was better for MLB than McCourt

Please, someone - a judge, a lawyer, Bud Selig - I don't care who, get rid of McCourt. He is a leach on the proud Dodger's organization. I have been a fan since I was a little kid in the early 1970's. I have seen some very proud moments and some not so good, but this is beyond embarassing. I want to see my Dodger's compete again and be relevant. I want to see players proud to be a Dodger. McCourt has degraded the entire organization and the blood sucker keeps dragging it out. Just get rid of him as soon as possible, so that we Dodger fans can finally have something to look forward to in the future.


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