“Baseball Commissioner Bud Selig announced last week that he wouldnâ€™t approve a Dodgers television deal with Fox Sports that reportedly was worth up to $3 billion. That left McCourt cash-starved and facing the prospect of missing the team payroll this Thursday, leading to an MLB takeover.
“McCourt defended his running of the team, saying he had made it profitable and successful. He also said the Dodgers have tried for almost a year to get Selig to approve the Fox transaction.”
Dodgers file for bankruptcy protection, by Rober Jablon, AP, June 27, 2011
If he made it so profitable, why did he have to take out so many loans on so much stuff?
“Among the 40 largest unsecured claims, totalling about $75 million, listed in the bankruptcy filing are former Dodgers slugger Manny Ramirez at nearly $21 million; Andruw Jones at $11 million; pitcher Hiroki Kuroda at $4.4 million; and the Chicago White Sox at $3.5 million. Longtime Dodger announcer Vin Scully is owed more than $150,000 as part of his contract, court documents show.
“According to the bankruptcy filing, the Dodgers began experiencing ‘cash flow difficulties; last year due to declining attendance, paying about $22 million in deferred compensation and revenue sharing.
McCourt has taken out loans to stay afloat but his mounting financial problems were expected to balloon June 30, when he owed roughly $30 million to meet payroll. The bankruptcy filing also showed a $67-million loan taken out against the parking lots at Dodger Stadium was set to mature on Thursday.”
And this might have something to do with their cash flow problems:
“The McCourts have been embroiled in a contentious divorce where their lavish spending habits were detailed in court documents. The former couple took out more than $100 million in loans from Dodger-related businesses, records show.”
And, what a wacky place for David Boies of US vs. Microsoft and the 2000 recount before the SCOTUS fame to pop-up.
“McCourt had hoped Selig would sign off on the transaction that would have provided him with $385 million up front and was vital to a binding settlement reached between him and his ex-wife and former Dodger CEO Jamie McCourt.
“‘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,” David Boies, a lawyer for Jamie McCourt, said.”
Or maybe not; looks like he’s done a certain amount of sport related law in his career.
Y’know, this is why I hate family run businesses. It all usually ends in tears.