Another payroll, another life raft. But is it the last one?

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For months now, speculation has run wild that embattled Dodgers owner--or co-owner, as Jamie McCourt would like you to know--Frank McCourt has flirted with insolvency. He has seemingly tapped just about every potential source of cash available to him. In the past, he's pledged revenue from future ticket sales to secure massive loans, a significant part of the proceeds of which was lopped off the top and given directly to the McCourts. Later, following last Fall's trial, news broke that Frank had taken advances from Fox, attempted to pledge the club's future television rights as collateral, attempted to outrightly sell those same rights, and (most recently) took advances from corporate sponsors in order to meet payroll.

That last step, which I have been told by several knowledgeable people to have been previously unheard-of in the baseball world, will allow Frank to meet tomorrow's payroll obligation. However, only yesterday, it was reported by two stalwarts of the saga's coverage that the next looming payroll date, June 30, posed even greater problems than such days have in the past. The reason: over $8 million is due former Dodger Manny Ramirez as part of his agreement to defer salary.

If, as Bill Shaikin's sources suggest, the Dodgers truly have "no chance" to meet their June 30 obligations, it would be somewhat fitting that the last straw is the coming-due of a deferred debt; indeed, the McCourt Era in Los Angeles may be best-remembered for an unsustainable pattern of debt-incursion and a cascading series of small crises seeming nearly certain to lead to an imminent failure of the club as a going concern.

Of course, Frank McCourt doesn't believe such doom to be as inevitable as most folks think. Frank is still insistent that, if Major League Baseball would simply approve a massive television deal he has ready to sign with Fox, then both the Dodgers' immediate and long-term liquidity issues would be rendered moot. And, assuming Jamie would approve of such a deal--all indications are she would not--Frank would not be wrong, per se.

But it's widely and reasonably believed that Major League Baseball has determined that McCourt ownership is no longer viable, and it will not hurry its investigation and face the prospect of actually having to rule on Frank's proposed TV deal. For months now, Frank has been playing chicken with MLB; he's doing his best to establish his position in future litigation that Major League Baseball caused the coming failure of the Dodgers, and that its refusal to (a) finish its investigation--which Frank will call a sham--and (b) approve the TV deal should render it liable to Frank.

You didn't think we'd get out of this without more law suits, did you? Still, it seems obvious that, should Frank be unable to make the end-of-the-month payroll, Baseball will immediately seize complete control of the Dodgers and McCourt ownership will be almost certainly at an end. Yes, Frank might extract some blood from Baseball further down the line, but it is nearly impossible to imagine a scenario in which he is restored to the owner's box.

After that, I see two scenarios as more likely than the others. First, Baseball might assume all the club's assets and liabilities, paying the club's marital estate the net worth of the franchise. Then, Baseball would run the club as a ward of the state, taking its time to find an appropriate long-term buyer for the team. Frank--and perhaps Jamie--would litigate every aspect of this: the seizure, the valuation, the amount and manner of compensation, and every other conceivable point.

The second possible scenario is one we've discussed in this space before: bankruptcy. In such a scenario, Baseball might itself or through an ally finance the Dodgers during the pendency of the bankruptcy proceedings; upon a showing that jumping ahead of the majority of the franchise's creditors is the only way the  Dodgers can obtain financing during the bankruptcy, Baseball could assume a super-priority status. In English:  Baseball would get paid back before nearly all of the club's other creditors. The club would eventually be sold at auction, and Frank (and Jamie) wouldn't see a significant dime until and unless all creditors were paid.

Other possibilities include a quick settlement between Frank and Jamie, followed by a quick sale to someone ready to put cash on the table. While the former proposition is possible, we should all know by now that Baseball doesn't move especially quickly. Perhaps if the McCourts were able to produce a buyer, Baseball would finance the club's operations during the league's vetting process, on the condition that it will seize the club if the sale falls through. And, of course, there is still the matter of actually producing a viable owner. Dennis Gilbert seems like a possibility, but these deals don't get put together overnight.

And we can't ignore the possibility that Frank McCourt finds some more change in the couch and makes the June 30 payroll after all. We've been to the brink before, and while this one sure seems like the direst situation Frank's faced yet, he's got a lifetime of unlikely successes under his belt.

After each of these flirtations with complete failure, however, the fan unrest grows louder and louder. If Dodgers diehards wake up the morning of July 1 with the club ten games out of first place and the saga that has chewed up the last two years no closer to resolution, I suspect the already-toxic relationship between the club's owner and its fans to reach new depths. I get the sense that, above all else, fans just want this to be over. Yes, the recovery process is going to be long, painful, and fraught with uncertainty. But the healing can't begin until the bleeding stops.
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