MLB rejects Dodgers’ television deal with Fox
Commissioner Bud Selig on Monday rejected a proposed television rights package that would have given life to Frank McCourt’s ownership of the Los Angeles Dodgers.
After a two-month investigation, Selig concluded that too much of the 17-year, near-$3 billion package with Fox would be funneled away from the Dodgers, who are straining to stay relevant under McCourt’s financial bind.
“Critically, the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt,” Selig said in a statement. “Given the magnitude of the transaction, such a diversion of assets would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans.”
So arrive what could be the final days of McCourt’s ownership of the Dodgers, seven years after he purchased the franchise from Fox.
McCourt, who Friday had reached a divorce settlement with ex-wife and former team president Jamie McCourt, was notified Monday afternoon of Selig’s decision, which effectively nullifies that settlement. A portion of the $385 million advance from Fox was earmarked for Frank McCourt’s personal debt and divorce payoff.
In the notification from Selig, McCourt was told the rejection came not simply due to current circumstances, but from a systematic stripping of Dodgers assets for years. Baseball investigators determined McCourt’s solution – the Fox contract – would invite the same conduct.
McCourt has said he’d require the cash infusion from Fox to keep the Dodgers viable.
With a large payroll outlay due in 10 days, the fight has come again to McCourt, the feisty Bostonian whose choices seem limited: sell or sue.
His attorney, Steve Susman, released a statement that in part read: “Commissioner Selig’s letter of rejection is not only a disappointment, but worse, is potentially destructive to the Los Angeles Dodgers, and Major League Baseball. Accordingly, we plan to explore vigorously our options and remedies with respect to Commissioner Selig’s rejection of the proposed Fox transaction and our commitment to protect the long-term best interests of the Los Angeles Dodgers.”
According to the Major League Baseball constitution, the commissioner has the authority to investigate transactions and occurrences with its teams. Also, upon assuming ownership of the Dodgers, McCourt was required to sign a document in which he agreed not to sue or challenge the authority of the commissioner.
In spite of the findings of the investigation, which McCourt and Selig are due to discuss in person at a later date, McCourt has not yet reached a point where his ownership may be terminated.
However, if McCourt is unable to meet its next payroll, which includes more than $8 million in Manny Ramirez salary deferrals, baseball will cover it for him with the stipulation he put up for sale the team and its holdings. In the event McCourt refuses, the club will be seized and sold, with McCourt receiving the profits.
McCourt’s history suggests he is unlikely to go along. He could attempt to challenge Selig’s authority to block the deal with Fox, a legal battle Selig is believed to be prepared for.
“The decision was reached after a full and careful consideration of the terms of the proposed transaction and the club’s current circumstances,” Selig stated. “It is my conclusion that this proposed transaction with Fox would not be in the best interests of the Los Angeles Dodgers franchise, the game of baseball and the millions of loyal fans of this historic club.
“…We owe it to the legion of loyal Dodger fans to ensure that this club is being operated properly now and will be guided appropriately in the future. This transaction would not accomplish those goals.”
Selig took control of the Dodgers’ finances two months ago, when he announced an investigation into team affairs and appointed a monitor – Tom Schieffer, later accompanied by John Allen – to oversee day-to-day matters. Schieffer and Allen will continue in their roles in the coming days, at least until the investigation is concluded.
Meantime, the Dodgers have struggled at the gate and in the standings. Dodger Stadium has been half-empty many nights: the club is on pace to draw fewer than 3 million fans over a full season for the first time in 19 years. Outspent on players by 11 teams and undone by injuries, the Dodgers are nine games under .500 and two games out of last place in the National League West.
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