Crisis surrounding the Los Angeles Dodgers finally came to an expected climax Monday, as the team has filed for bankruptcy protection in a Delaware court blaming the refusal of Major League Baseball to approve a multibillion-dollar TV deal.
The franchise has been unsteady through an ugly 2-year divorce between owner Frank McCourt and his wife Jamie, the team's former CEO. Now that the TV deal which would have provided $385 million up front has fallen apart, Mr. McCourt faces the potential of missing June 30 team payroll. Mr. McCourt claims the Dodgers lobbied MLB Commissioner Bud Selig for almost a year to approve the transaction. Selig's decision has now also voided the McCourts' divorce settlement.
The Chapter 11 financing permits the Dodgers to use $150 million for daily operations and buys time for the team to seek a media deal and ensure the team's long-term financial stability, the Dodgers said in a news release. A judge would need to approve use of the money and a hearing is set for Tuesday.
Baseball Commissioner Bud Selig announced last week that he wouldn't approve a Dodgers television deal with Fox Sports. 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 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.
In April, MLB took the extraordinary step of assuming control of the troubled franchise. Former Texas Rangers President Tom Schieffer was appointed to monitor the team on behalf of Selig, who said he took the action because he was concerned about the team's finances and how the Dodgers are being run.
The Dodgers' season began with a group of LA fans brutally beating Bryan Stow, a fan of the visiting rival San Francisco Giants, in the stadium parking lot after the game to the point where his eyes have just been able to open this week. The team is currently 9 games under .500.
The Associated Press contributed to this report