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MLB: Frank McCourt is “threatening the immediate demise of one of baseball’s great teams”

Jun 28, 2011, 12:30 PM EDT

Combination of file photos of MLB commissioner Bud Selig and Los Angeles Dodgers owner Frank McCourt

Major League Baseball’s initial filing in the Dodgers’ bankruptcy case is out, and it’s quite clear that they are going to pull absolutely no punches here and, presumably, will pull no punches when the initial hearing in the matter gets underway early this afternoon.

In addition to objecting to everything McCourt wants to do, they lay out what will obviously be the overarching theme of their case. Note that, unlike the Rangers/Tom Hicks situation, MLB is not content to merely wade in in an effort to protect its own administrative interests and powers.  It’s clearly taking aim at McCourt himself. The verbiage comes via Bill Shaikin’s report:

“In pursuing his own financial interests at the expense of the club, over-leveraging it and draining millions of dollars for capital investment and operations, Mr. McCourt has placed the [Dodgers] in their current, incredible position of not being able to make payroll less than halfway through the regular season … Having siphoned off well over $100 million of club revenues and obviously unable to distinguish between his personal interests and those of the club, Frank McCourt has driven the Dodgers into a liquidity crisis so severe that, absent extraordinary measures, the club would be unable to make its payroll. Mr. McCourt attempted to use that looming disaster to leverage [MLB] into approving the sale of the club’s broadcast rights to pay current expenses and to permit millions more to be misappropriated for personal use.”

  1. Kevin S. - Jun 28, 2011 at 12:35 PM

    I’m not gonna lie, Bud is making it easier and easier for me to forget about the fact that the tickets for the first game I was supposed to go to, in August 1994, were never used.

    • Ari Collins - Jun 28, 2011 at 12:46 PM

      It takes an epic villain to make a great villain seem the good guy.

      • Kevin S. - Jun 28, 2011 at 12:50 PM

        Doesn’t it?

      • Kevin S. - Jun 28, 2011 at 12:51 PM

        As somebody said in the past couple days in these comment sections, “the enemy of my enemy is the commissioner of baseball.”

    • Rooster Amaro - Jun 28, 2011 at 1:04 PM

      Agreed. It takes a particularly terrible piece of scum like Mr. McCourt to make Bud Selig look downright heroic. That is one of the more fascinating aspects that’s shown itself as these events have unfolded.

    • paperlions - Jun 28, 2011 at 4:09 PM

      You know that the players went on strike while still under contract, right? And that they were not locked out, nor did Selig have any real power to effect change as it was the owners as a group that were trying to impose a salary cap…right?

      No? Oh, well, you should read up on it so you can be pissed at the correct groups of people…..god, I can’t believe I have to defend Selig so that people only hate him for valid reasons.

      • Kevin S. - Jun 28, 2011 at 4:20 PM

        Selig is very quick to take the credit for the financial boon the sport has seen under his stewardship. Alright, fine, but with that comes taking the blame for a lot of the negative things that have happened, things Selig is very quick to claim aren’t his fault. You don’t get it both ways.

        And just because the players are the ones who chose to strike does not mean the owners are necessarily blameless, just as the owners instituting a lockout does not absolve the players. The game was heading towards a work stoppage anyway.

      • paperlions - Jun 28, 2011 at 4:38 PM

        I agree that the owners are not blameless…but the owners are not Selig, he is their chosen mouth piece. If you want to be pissed at someone, there are plenty of people…no need to focus on the bungling Selig…and Selig taking credit for something that was not his doing is no basis for you blaming him for something that also was not his doing….he had equally small roles in each occurrence.

      • Kevin S. - Jun 28, 2011 at 5:01 PM

        I disagree that you can lump that on the “owners” – Selig had until very recently been one of them, and his agenda was consistent with the ownership bloc he was a part of. Or do you think that pushing for a salary cap, when baseball didn’t and doesn’t need one, had nothing to do with the fact that he had previously owned a franchise that would stand to benefit from one?

      • paperlions - Jun 28, 2011 at 8:22 PM

        Yes, so spread your dislike equally among all the owners….in 1994, Bud wasn’t even the actual commissioner…he was just the interim. In 1994, he had no more power than any other owner…he was just the messenger/figure head.

  2. tuftsb - Jun 28, 2011 at 12:50 PM

    Is McCourt using the “Blazing Saddles” defense? This strategy is similar to Cleavon Little taking himself hostage after arriving in town.

    “Isn’t anyone going to help that poor man”?
    “Hush, Jamie, that’s a sure way to get him killed”.

    • jimbo1949 - Jun 28, 2011 at 1:40 PM

      or killing your parents and pleading for mercy ’cause you’re an orphan?

  3. sdelmonte - Jun 28, 2011 at 12:58 PM

    In case anyone was worried, though, the Dodgers are not likely to go out of business. I found this photo feature listing 10 pro sports teams that went broke. Only one, the unlamented Cleveland Barons NHL team, is no longer with us.

    http://www.vancouversun.com/life/business/5016734/story.html?tab=PHOT

    Ironic that the first baseball team in the modern era to go broke was the Pilots, who a certain Allan Selig was able to buy and move east.

  4. Old Gator - Jun 28, 2011 at 1:09 PM

    Who plays Bud in the ESPN dramatization of the trial? I’ve already got Terence Stamp cast as McCourt; he looks a little like him, is a fine actor and can do any accent or patois, even a Tinseltownified Bahston accent, and, like McCourt, he’s dead.

    • jwbiii - Jun 28, 2011 at 1:59 PM

      I was thinking Christopher Lee, both for his resemblance and his experience playing blood suckers.

  5. royalsfaninfargo - Jun 28, 2011 at 1:23 PM

    Does Frank McCourt know what a bitch slap feels like? Because MLB just gave him one. Hopefully this is a prelude to the unlubed anal cavity exam he will be getting during the litigation of this.

  6. steve keane - Jun 28, 2011 at 2:07 PM

    When Bud Selig becomes the voice of reason around here then by God the terrorists have won

    • kiwicricket - Jun 28, 2011 at 8:56 PM

      +1

  7. deep64blue - Jun 28, 2011 at 2:10 PM

    If I’m MLB I’m asking for a Chapter 11 Trustee to be appointed – and I’m nominating J. Thomas Schieffer for the post ….

  8. Chris Fiorentino - Jun 28, 2011 at 3:02 PM

    I’m still trying to figure out why the f*** McCourt gives a shit what Bud or any other MLB owner thinks about how he ran his business. Sure, he is a scumbag and he basically lined his pockets with money from the team. And the problem legally is…….what? Is there a written rule that an owner of a baseball team must do everything he can to provide the best possible team on the field? Is there a written rule that states that he can not drain every last cent he wants to from the team and line his pockets, then when he can not make payroll, claim bankruptcy as every other business has a legal right to do? Again, maybe I am missing something, but is baseball 30 businesses or is it just 1? I know all about anti-trust and everything, but it seems to me this is going to be a serious battle here if McCourt wants to fight the anti-trust exemptions that baseball gets if it wants to force out a businessman like McCourt.

    Again, I don’t like the guy and think he is a scumbag. But last time I checked, being a scumbag isn’t against any of the laws in this country.

    • Kevin S. - Jun 28, 2011 at 3:07 PM

      Buying a Major League Baseball franchise does not give one carte blanche to run it as one pleases. There are terms and conditions that any prospective owner agrees to before a sale is approved. I don’t know exactly what the TaC are or whether or not McCourt actually did violate them, but “it’s his team, he can do whatever he wants with it” is not accurate.

      • sportsdrenched - Jun 28, 2011 at 3:18 PM

        Exactly. The key term here is “franchise”. I’m sure McDonald’s, Subway, etc have binding rules in their franshise agreements that stipulate the way their business is run.

        If we’re talking about the Pawn Shop down on South Sleazy Road then I would agree with you.

      • Chris Fiorentino - Jun 28, 2011 at 3:19 PM

        I didn’t say he can do whatever he wants. I said what has he done that is against the law. Two totally different things. And if there are terms and conditions, I would love to read THOSE from Bill “Washington Monument Sized hard-on for McCourt” Shaikin instead of the daily assassination of the guy. I’m not saying I am for McCourt. Just looking for a little teensy tiny bit of fair coverage here is all. If McCourt did something against the law, he should be punished. If he did something against the WRITTEN rules of MLB, then he should be punished. If he did something immoral, then, sorry, but legally, too frigging bad. That’s what MLB gets for bringing in the guy. Maybe it will help them with their vetting process.

        I have yet to read one article or comment that says exactly what McCourt did that was a violation of LAW. Even MLB’s statement above doesn’t really say anything that McCourt did violates LAW. He couldn’t make payroll, so he set up a loan. So what? Happens all the time in the business world. Why should MLB be any different? And he had a deal set up with Fox and MLB decided it wasn’t good enough. Again…where does MLB get the balls to do that? If I were McCourt and I felt wronged, this is exactly what I would do too.

        Just playing devil’s advocate here. SOMEBODY has to do it since no one in the media will.

      • Kevin S. - Jun 28, 2011 at 3:29 PM

        Well, it’s looking pretty likely that he and Jamie committed tax fraud, so there’s that for starters.

      • paperlions - Jun 28, 2011 at 4:06 PM

        Chris, no one has to play devil’s advocate (or will) because there is no basis for so doing. All of your questions have been answered multiple times in dozens of articles on the Dodger’s financial situation. McCourt has violated a number of MLB ownership guidelines, and he is trying to mortgage the future of the franchise (17 years worth of TV rights) for pennies on the dollar to temporarily save his own ass. MLB is stepping in to prevent him from devaluing the franchise by 100s of millions of dollars (which is how much less it would be worth if it was locked into a 17 yr TV deal Fox, instead of an owner being free to start up his own RSN), just before he has to sell it. With his current financial model, he’d be bankrupt again in a few years even with his deal…and if the divorce court rules that Jaime owns 1/2 of the dodgers, it will be sold immediately, because he still wouldn’t be able to afford to buy her out.

      • Kevin S. - Jun 28, 2011 at 4:21 PM

        There’s also the argument that the way he has structured and managed the Dodgers has defrauded his creditors, which would also be illegal.

      • Chris Fiorentino - Jun 28, 2011 at 4:46 PM

        paperbag, I have admittedly not read every single article about this…so I ask you…

        “McCourt has violated a number of MLB ownership guidelines, ”

        Name ‘em.

      • Matt - Jun 28, 2011 at 6:54 PM

        The actions of McCourt (for the purposes you are looking at) aren’t necessarily illegal because they do not violate any law as dictated by the government. Instead, his actions more likely violate civil contractual relationships that he (willingly) entered into at the time he bought the team. Without actually having access to the private contracts signed by MLB owners I cannot point to specific provisions that are being violated. However, with the commish having a well-established ability to intervene into situations in the best interests of baseball I presume that within the rules that buying into a baseball team the new owner would allow for this interference. So, with that ability for the commish Bud was able to intervene by placing an individual into the management structure to oversee operations, and to deny McCourt the ability to enter into his contract with Fox because in devaluing the Dodgers organization he is hurting the long term economic interests of all owners, not just his Dodgers because future sales would take into account the Dodgers’ value in an appraisal. Beyond that everything McCourt is doing is based on his own actions. McCourt is the one that over-leveraged his property necessitating that he then bring this mess to Bankruptcy court, potentially placing his ownership rights at stake if the court agrees with the assessment of Craig and the other commenters regarding MLB’s potential loan to cover operational costs.

      • Matt - Jun 28, 2011 at 7:08 PM

        If you want something more concrete…the Fox deal is just like any other transaction that teams make, and therefor requires commish approval. Notice how when a team signs a player the contract is submitted to commish for approval? Or that trades are due to the commish’s office for approval before 4pm on trade deadline day? You heard the same language in reports about the Fox deal, that after being signed would be submitted to the commish for approval. While 99.9% of these transactions are signed off on because to scrutinize every transaction for exact fairness/intelligence would delegitimize the sport in the eyes of many and cause the sport to meet the same fate as the XFL, the commish has the ability to deny any one of the trades or signings (just look at the Ilya Kovalchuk deal with the NJ Devils being denied by Commish Bettman in the NHL) and Selig did that very thing here.

  9. dogsweat1 - Jun 28, 2011 at 5:05 PM

    I can’t wait to see the shrill shock of Los Angeles Fans face, when the Dodgers return to Brooklyn!!!!!!!

    Dead end Los Angeles is about to get what it tdeserves!!!!

    Brooklyn Dodgers 2013!!!

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