Dodgers' Financial Woes Lead to Bankruptcy Filing - NBC 7 San Diego

Dodgers' Financial Woes Lead to Bankruptcy Filing

Owner Frank McCourt blames the MLB's refusal to approve a proposed TV deal



    Dodgers' Financial Woes Lead to Bankruptcy Filing
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    The LA Dodgers have filed for bankruptcy protection, according to a spokesman for the team.

    The LA Dodgers filed for bankruptcy protection Monday -- a step that might buy owner Frank McCourt some time as he attempts to keep one of baseball's most storied franchises afloat.

    Bankruptcy Protection Filing: Dodgers (PDF)

    The move comes after a flurry of activity in an ownership saga that has led to the team's stunning fall. Last week, Major League Baseball rejected the team's proposed TV deal with Fox, and McCourt blamed MLB commissioner Bud Selig's refusal to approve the deal as the cause for Monday's bankruptcy filing.

    In a statement released Monday, the team said Chapter 11 bankruptcy protection will provide the organization with a process to address its immediate financing requirements. The filing allows the team to use $150 million for daily operations.

    "There will be no disruption to the Dodgers day-to-day business, the baseball team, or to the Dodger fans,'' the statement said.

    The filing comes three days before the team must meet its June 30 payroll.

    McCourt said the Dodgers have tried for almost a year to have Selig approve the Fox transaction. McCourt said it would make the Dodgers one of the strongest capitalized franchises in Major League Baseball.

    "I simply cannot allow the Commissioner to knowingly and intentionally  be in a position to expose the Dodgers to financial risk any longer,'' McCourt said n his statement Monday. "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.''

    The proposed TV deal was rejected June 20. That was just a few days after Frank and Jamie McCourt reached a divorce settlement agreement, which was contingent on approval of the deal.

    In his statement last week, Selig said the transaction would further divert Dodger assets to McCourt's "personal needs.'' Under the settlement, almost half of a $385 million up-front payment would go to the McCourts.

    In April, MLB appointed a monitor to oversee the team's financial operations.

    NcCourt has repeatedly claimed he has made the team a success on the field, but detractors said the McCourts' messy divorce has created a financial mess. The filing states the team's cash-flow struggles began last year because of declining attendance.

    "He's clearly running very low on options right now,'' David Carter, executive director of USC Sports Business Institute, told the Associated Press. "What seems to be the case is a high-stakes chess game Frank McCourt and MLB, and he's running out of pieces. This is one of the uglier weeks in Dodger history.''

    Jamie McCourt's attorney, David Boies, called the bankruptcy filing  "disappointing and disturbing.''

    "During the years Jamie McCourt was CEO of the Dodgers, the team's  financials, although heavily leveraged, were stable and improving,'' he said.  "In the almost two years since Mr. McCourt fired her and took over management  of the Dodgers, Mrs. McCourt has made repeated proposals to resolve her right  to 50 percent of the team in a way that would preserve the value and integrity  of the Dodgers for Dodger fans, for Los Angeles and for her family.

    "She has continued to do so despite the many personal attacks against  her by Mr. McCourt and his representatives. The rule or ruin philosophy that  appears to have motivated today's filing is bad for everyone who cares about or  has an interest in the Dodgers."

    The team is in Minneapolis for a three-game series that starts Monday.

    The "Top 40 List"

    The bankruptcy filing includes a "Top 40 List" -- a list of the 40 largest unsecured claims involving the Dodgers. Topping the list: Manny Ramirez. He is owed more than $20 million, according to the filing.

    Andruw Jones, who is owed $11.075 million, is second on the list. He played for the Dodgers in  2008, hit a career-low .158 in 75 games and was released before the start of  the 2009 season.

    Pitcher Hiroki Kuroda is third, owed $4,483,516.

    Most of the list of creditors are players or former players, but it also includes long-time Dodgers broadcaster Vin Scully. He is No. 32 on the list at $150,000.