Friday, September 23, 2011

MLB asks for sale of the Dodgers in bankruptcy.

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And the rhetoric intensifies. As reported by the Times' Bill Shaikin, Major League Baseball today asked Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware to order the Dodgers sold as part of the club's bankruptcy proceedings. Frank McCourt has asked the court instead to order the team's future television rights sold at auction, and his camp has long acknowledged that disposition of those rights is Frank's path to retaining the Dodgers. Among baseball's boldest language was this gem:
No one will pay the [Dodgers] to broadcast Dodgers games if the club is not part of Major League Baseball [...] Consequently, the [Dodgers'] path in this case is a dead end or worse.
Baseball has pointed out to the court that selling the television rights would have all sorts of nasty consequences, potentially including, but not limited to, the suspension of the franchise from the league. That MLB is willing to threaten such dramatic action speaks to how strongly it desires Frank McCourt out of baseball for good.

So, the question remains the same as it has been all summer: will Frank McCourt survive long enough to sell those television rights so necessary to his eventual plan for bringing the team out of bankruptcy?


We'll take a look at that this weekend.
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61 comments:

  1. The MX Missiles are being loaded with warheads and taken out of their silos. It's war folks! I know whose side I'm on!

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  2. Isn't this a risky move for MLB? Frank has contended that baseball wouldn't approve a deal because Selig wants Frank out of baseball. Baseball, until now, countered that the long term Fox deal was bad because the deal that was negotiated ties up the teams rights for too long at potentially less than market value. But if baseball is declaring it would reject any deal that helps Frank, no matter how favorable the terms are for the Dodgers, how short term the deal is for or how much above market value it is, then they've pretty much torpedo'd their own defense against Frank's claims.

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  3. MLB is walking a fine line here ... it seems risky to give a judge an ultimatum. I can see the judge ruling to allow the video rights sale and enjoining MLB from retaliating.

    I also bet that McCourt is just itching to call Selig's bluff.

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  4. Finally, some movement towards the inevitable. Josh, can you explore the ramifications of what happens if the Dodger franchise rights were to be temporarily suspended or even permanently revoked by MLB? That's major league baseball's trump card. I couldn't care less about what happens to McCourt or the front office in this scenario, but what happens to the players from a contractual standpoint? I would assume they would be dispersed in a special draft. Or would MLB simply put in a replacement team, say temporarily housed in Angel Stadium, with the current roster? I'm sure there is some precedent in major league sports, but I haven't had time to do any research yet.

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  5. THe paty's over!

    MLB's filing is aggressive, but the crux of their argument is that they have the power to disapprove Frank's proposed sale of the tv rights under the terms of the agreement under which Frank own the franchise. If the court agrees with that position, it game, set and match.
    The other aspect of MLB's filing is that if the sale of the Dodger's is conducted by the bankruptcy court, MLB is spared all of Frank's likely claims that MLB has a hidden agenda and has not obtained a fair value for the team.

    One problem with MLB's argument is that under the franchise agreement the sale of the club is subject to the approval of MLB and the highest sale price is not necessarily the deal that MLB would approve. Further the idea that the court can supervise the sale of the team, but not do the same for the sale of tv rights is somewhat inconsistent.

    The primary goal of a bankruptcy court is to maximize value of the assets for the estate (including both the owners of the entity as well as it's creditors). I know nothing about the judge handling the case, but my knee-jerk reaction is that the judge will seize on the noted inconsistency and explore the sale of the tv rights as that ultimately is the approach which would best benefit both Mc court and creditors. Ultimately, the deciding question is if the judge will takevthe position that he has the authority to over-ride the powers granted MLB under the franchise agreement so as to maximize the value of the estate.

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  6. Fox Sports/News Corp can sue the pants off the Dodgers if they violate their existing contract, or sign a contract with Time Warner Cable for example that starts the contract before the 2013 season. They can also contest the Bankruptcy Judge’s ruling if the Judge voids the contract and demands an auction of the broadcasting rights.

    The Dodgers are a franchise of MLB. MLB can stripped McCourt of the Dodgers at its leisure. It really doesn’t want to get in the way of a Bankruptcy Judge before he make his ruling and/or findings.

    What will probably happened is that McCourt and MLB/Selig will make some sort of deal much like how Tom Hicks kept some of the property around the Ranger’s ballpark/Ameriquest Ballpark. The game is coming to an end for Frank McCourt. He is being pushed into a corner, and there is a good chance MLB will stripped him of the club if the Dodgers emerge from Bankruptcy.

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  7. Not just anyone can purchase a MLB franchise, it isn't just about the money and with the recent ruling by the supreme court involving the NFL (the Reebok deal, not the labor deal), I would think the bankruptcy judge would tend to lean towards MLB's position. In the NFL situation the supreme court reinforced the organizational power of the NFL, and in the labor dispute the court seemed to do the same. I would think the McCourt bankruptcy would have to be administered with this higher court position in mind. Also, never understimate the power of "it's peculiar nature".

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  8. Josh

    Please address the "executory contract" rule and how it might effect the existing FOX tv contract. If the BK Judge applies said rule will the contract be void or voidable allowing Frank to negotiate with another provider prior to the 2012 season.

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  9. How can we get a copy of the MLB pleading?

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  10. So today Frank asks for more time because he does not have a clue. We have all known that for years!

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  11. Frank has had too much time. We need a new owner in place to make us major players durring free agency. The last two years have been wasted considering we were just one to two bats away from doing some thing special The payroll is nowhere near what they claim it to be ( paying for players who have not seen a base ball field for years) I believe that after deferred payments we were closer to 80,000,000 which was less then the Twins. Please let their be an end in sight and give all of us Dodger fans hope for the future!!

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  12. BillShaikin Bill Shaikin
    McCourt agrees to sell #Dodgers. Team to be auctioned in bankruptcy court. More soon at latimes.com/sports.

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  19. Hey Frankrupt, not only are you a crook, but you're uglyy as well! Maybe if you do get run over by a bus it might improve your looks. Take your ho wife and your loser kids and leave. I only hope that Brian Stow's family rapes you like you did to the Dodgers.
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  45. I do not follow Dodgers, but still I don't think that it is in such a condition that it is sold in Bankruptcy. MLB should think before putting a request.

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