In what has been a very turbulent year for the Los Angeles Dodgers ownership, a new twist has emerged.
Dodgers' owner Frank McCourt, who is involved in a highly publicized and costly divorce from wife Jamie, has filed for Chapter 11 protection in Delaware in an effort to prevent being taken over by Major League Baseball, as questions swirled that he would not be able to meet the team's June 30 payroll.
In a press release, McCourt made this statement:
The Dodgers have delivered time and again since I became owner, and that's been good for baseball, McCourt said. 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.
Major League Baseball commissioner Bud Selig had previously denied approval for a proposed broadcast deal between the Dodgers and Fox Sports, basically withholding the cash needed for the club to make payroll, because Selig feared the further diversion of Dodgers assets for the personal needs of Mr. McCourt.
Multiple reports have cited that the McCourts used roughly $100 million in salary and loans taken against the club for personal use and real estate investments.
The Fox deal would have given the Dodgers between $1.7 billion and $3 billion over 17 years.
In filing for bankruptcy, the Dodgers can continue to run day-to-day operations, which among other things include paying all employees, ticket prices remaining the same, and Dodger Stadium maintenance.
The Chapter 11 process provides the path on which to position the Los Angeles Dodgers for long-term success, said McCourt. The process will allow us to focus on maximizing value in a manner that is transparent and driven by the best interests of the Los Angeles Dodgers and our fans.