Los Angeles Dodgers vs. Major League Baseball
Dodgers owner Frank McCourt takes a feud with the league to the next level, by putting his struggling team's fate in the hands of a bankruptcy court
One of baseball's most storied teams, the Los Angeles Dodgers, filed for bankruptcy protection in a Delaware court on Monday. Owner Frank McCourt is hoping a federal judge will approve $150 million in financing from a hedge fund, Highbridge Capital, that he needs to keep the franchise running until he can put it on more solid footing. Here, a brief guide to the Dodgers' troubles:
How did the Dodgers get in such a mess?
It took a long time. The Dodgers were a perennial powerhouse, but some sportswriters say the team started going downhill in 1998, when News Corp. bought the Dodgers from the O'Malley family, which had owned the team for decades. News Corp. promptly traded away Mike Piazza, a franchise player still in his prime, without the knowledge of the team's general manager. The Dodgers kept declining in popularity as their local rivals, the Angels, surged to win the World Series in 2002, and the NBA's Los Angeles Lakers won a string of championships. L.A. was no longer "Dodger Town," and as the team lost fans, ticket sales — and thus overall revenue — plummeted. This season, the Dodgers are struggling once again, with 36 wins and 44 losses.
Why file for bankruptcy now?
McCourt blames it on the league. Major League Baseball Commissioner Bud Selig last week rejected a $2.7 billion, 17-year TV deal with Fox Sports that McCourt, a former Boston real-estate developer, had been counting on to replenish his team's empty coffers. Now he's expected to come up short when it's time for the team's nearly 300 full-time employees to get their paychecks on Thursday. The Dodgers already owe millions to former players — slugger Manny Ramirez has yet to collect $21 million out of $45 million he was due for two years in L.A. The Dodgers even owe $150,000 to Hall of Fame announcer Vin Scully, the legendary "voice of the Dodgers."
Is McCourt at fault for the Dodgers' struggles?
The Dodgers' saga certainly got more complicated after he bought the team from News Corp. in 2004, for $430 million. The most noteworthy complication came when McCourt and his wife, Jamie — formerly the team's CEO — headed to divorce court. The former couple fought over the team's ownership, and had just reached a deal under which Frank McCourt would have been declared sole owner, and Jamie McCourt would have received $100 million. But with Selig's rejection of the TV deal, that money disappeared.
What happens next?
The important thing, for McCourt, may be what doesn't happen next. The league took over daily operation of the team in April, and McCourt reportedly was worried that Selig was preparing to seize the Dodgers entirely. Ultimately, he's hoping to force McCourt to sell to an owner with the resources to rebuild the franchise. But now that McCourt has filed for bankruptcy protection, the matter is out of Selig's hands, and it's up to the court to decide the team's fate. The league has contested the filing, arguing that the league should be allowed to take complete control.