A mere three days before the payroll comes due ó payroll that Frank McCourt canít meet ó the Dodgers have filed for bankruptcy, reports Richard Sandomir
. With that, the legal game begins.
Obviously the situation is fluid, and more details will stream in as the morning and day progresses, but for the time being, this could buy McCourt some time. Why? because a bankruptcy filing puts a halt on all legal action with respect to the bankruptcy estate (i.e. the Dodgers). McCourt will certainly argue that this will prevent a takeover from Major League Baseball, though the court may decide differently when it gets a chance to weigh in, likely in the next few days.
The problem for McCourt is that the kind of bankruptcy the Dodgers have certainly filed is designed to reorganize the financial house. Frank McCourt, however, does not have a plan available to him to do such a thing or else he would have already done it. The filing isnít yet circulating, but my guess is that heís going to ask the court to order that the Fox TV deal be executed ó assuming Fox wants to still do it, which it has been reported it may not
ó thereby providing funding.
The problem with that
, of course, is that the bankruptcy court wonít approve of anything that is not seen as in the best interests of the Dodgers the Dodgersí creditors,* itís obvious that Major League Baseball and others would come in and make a strong case that the Fox deal is not the best deal they could make.
If McCourt can do no better, the court may very well order a sale of the team. Perhaps auctioning it off, Texas Rangers-style. Which, by the way, would also put Major League Baseball in the same position it was in with respect to the Rangers: less-able to control who owns the team than it would otherwise be. Mark Cuban bid on the Rangers, after all. If his or some other non-chosen personís money looked green to the bankruptcy court in such a scenario, Bud Selig would be hard-pressed to stop them from participating in a team auction.