This is a big day in the history of the L.A. Dodgers. Major League Baseball has asked a bankruptcy judge to order that the team be sold at auction.
This is not a surprise, but it is quite something to see MLB lay out its case in black and white. The motion, posted after the jump, argues that Frank McCourt is using the Dodger bankruptcy “as a device to cure his own personal financial woes.”
“Every dollar taken out of the Dodgers is a dollar that will not be available — now and in the future — to acquire new players, to meet future payroll obligations, to fund the stalled renovations to Dodger Stadium, to improve the Dodgers fan experience and to otherwise uphold the history and tradition of the Los Angeles Dodgers.”
We've heard this all before, but again it's startling to see it stated so plainly in print.
Frank McCourt is asking the bankruptcy judge to void his contract with Fox, so that he can auction off the Dodgers' TV rights. That would give him the up-front cash he needs to keep the team on the field (and to pay off his ex-wife, Jamie McCourt).
But in its motion, MLB argues that McCourt cannot use the bankruptcy process to siphon off Dodger revenue for his personal use.
“A sale of Dodgers Media Rights without Major League Baseball approval would subject the Debtors to potentially severe discipline, including possible termination from the League… No one will pay the Debtors to broadcast Dodgers games if the Club is not part of Major League Baseball.”
So it's come to this: A franchise that dates back to 1883 has been threatened with expulsion from the League. If that happens, maybe Frank can televise a bunch of split-squad games? L.A. fans could thrill to a pennant race between Dodgers A and Dodgers B.
Will the judge agree to force a sale? Well, in his ruling about interim financing, Judge Kevin Gross pointedly noted that McCourt has to cooperate with MLB if he hopes to “successfully operate a team within the framework of baseball.”
MLB is saying that's impossible, and therefore the only remedy is a sale.
McCourt's PR people have issued a statement (next page) saying that MLB's motion is “meritless” and its inaccuracies are “offensive and too numerous to mention.”
First, the MLB motion:
MLB Motion to Terminate
Frank McCourt's full statement:
Major League Baseball's motion is meritless. It is another step in the Commissioner's continuing effort to cause the sale of the Dodgers notwithstanding that the Dodgers can and will be successfully reorganized as outlined in the recently filed media rights marketing motion. In United States bankruptcy reorganization cases, liquidation is the last resort, not the first option.
The debtor's Media Rights Plan, which was filed on September 16th, is designed to maximize the value of the Dodgers so it has the opportunity to emerge successfully from Chapter 11. The alternative offered today by Major League Baseball really amounts to an unnecessary and value destroying distressed sale of the Los Angeles Dodgers.
The inaccuracies in the “facts” recited in the motion and the false characterization of other matters are offensive and too numerous to mention. MLB's motion also ignores the fact that the Commissioner has treated the Dodgers differently from other Major League Baseball Clubs and that the Commissioner's actions starved the Dodgers of cash and caused the bankruptcy filing.
The debtor will file its initial response to MLB's motion with the Court early next week.