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Bankruptcy Court Orders Dodgers to Take Baseball's Loan
United States bankruptcy judge Kevin Gross earlier on Friday ordered against Dodgers’ owner Frank McCourt and the $150 million loan he obtained from Highbridge Senior Loan Fund, a hedge fund operation. Instead McCourt will be forced to “deal with the devil” and negotiate with Major League Baseball and Commissioner Bud Selig.
In Gross’ ruling, “Debtors [Dodgers] refused to negotiate terms with Baseball to obtain a better and unsecured loan because of Mr. McCourt’s poor relationship with the Commissioner.” Gross went on to detail that McCourt told the court that Selig was trying to usurp the Dodgers. “The Court finds that the Baseball Loan is not a vehicle for Baseball to control Debtors.”
In the end Gross told the Dodgers and MLB to play nice. “It is clear that Baseball needs and wants the Dodgers to succeed and the Debtors are best served by maintaining Baseball’s good will and contributing to the important and profitable franchise group under the Commissioner’s leadership.”
Unfortunately knowing the type of person McCourt is, he will not play nice. Everyone will reconvene in the Wilmington, Del. courthouse on August 16 for a hearing to determine how the Dodgers will sell media rights. The current deal with Prime Ticket, owned by Fox, expires in 2013. McCourt believes in fix the Dodgers’ woes, a new agreement needs to be in place. McCourt and Fox had negotiated a 17-year deal that would have paid McCourt $385 million up front. Selig vetoed the deal on June 20.
“Based on our more realistic estimates, it appears that the Proposed Transaction would be nothing more than a short-term fix to the Club’s precarious cash position,” Selig wrote in a letter to McCourt dated on June 20. Factoring in revenue sharing, tax liabilities, debt reduction and divorce settlements, Selig wrote that “the Club would require additional liquidity as early as 2013.”
Naturally McCourt disagreed with this assessment. As then-Vice Chairman Steve Soboroff told reporters on April 21 on behalf of McCourt, “What teams in America have a $3 billion... $2.5 billion deal ready to go? Where does that put the Dodgers? Oh it’s in jeopardy? Come on! It puts it in the upper echelons in the financial situation of all other teams. Talk to me about something else! Don’t talk to me about his financial situation. Give me a break.”
If the August 16 does not go his way he can litigate everyone into exhaustion to attempt to get his way - that is reportedly how he broke down his ex-wife Jamie McCourt according to the August 2011 Vanity Fair article written by Vanessa Grigoriadis.
It’s clear that sanity and truth are no obstacle for McCourt. McCourt needs to assuage his ego and get his way like a petulant teenager. No matter what the public does to protest his ownership, it will not deter the man from doing what he does best: litigate like hell, consequences be damned. That’s just a long way of saying that things will not get better any time soon.
Trade Rumors. Being a little more than a week away from the non-waiver trade deadline of July 31, the Dodgers have become sellers. Two pieces the Dodgers have interest other teams: infielder Jamey Carroll by the Milwaukee Brewers and starting pitcher Hiroki Kuroda from various teams including the New York Yankees, Detroit Tigers and Cleveland Indians.
For Manager Don Mattingly, he’s just trying to navigate the waters. “I just look at it that it’s not really my decision,” he told reporters.
“This time of the year there gets to be a lot of names started to get thrown around, rumors you don’t know what’s true or what’s not true. Our biggest thing is to keep things simple from the dugout standpoint. Let’s get ready to play. We need to win tonight. And start from there.”
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