Los Angeles Dodgers File for Bankruptcy
The Los Angeles Dodgers filed for bankruptcy court protection early this morning, less than a week after Bud Selig and Major League Baseball blocked the team from signing a new television deal to provide it with the cash it needed to meet the team’s payroll.
Well…now it look like Frank McCourt will need to prove that he has money to pay his current bills in order to retain control of the Los Angeles Dodgers.
Hard to believe that a storied franchise like the Dodgers is in so much financial trouble!
From the Los Angeles Times:
In his bankruptcy filing, McCourt showed he had a $150-million loan for interim financing. In order to obtain the loan, McCourt agreed to pay at least 10% interest and a $4.5-million fee.
In Tuesday’s hearing, Major League Baseball is expected to offer alternative financing, on better terms. Those terms were not certain on Monday, but MLB previously had said it would not provide financing to McCourt unless he agreed to sell the Dodgers.
If the bankruptcy judge grants McCourt interim financing, the focus could turn to McCourt’s long-term solution — an auction of the Dodgers’ cable television rights. The league claims it has approval rights for all television contracts, but McCourt is asking the bankruptcy judge to override MLB rules in the interest of fully repaying creditors. In response, the league is expected to say the value of the Dodgers’ television rights is not in doubt and the creditors have no need to worry about not getting paid.