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Tag:Tom Schieffer
Posted on: June 28, 2011 8:42 pm
Edited on: June 29, 2011 2:56 pm
 

Why Tuesday was better for MLB than McCourt

The takeaway from baseball's date with the Dodgers in bankruptcy court Tuesday?

Major League Baseball is very happy with the way the day went, according to sources, for at least two very specific reasons:

-- Lawyers agreed to "delete" language ordering the auctioning of "media rights" (television contract) by a specific date that Frank McCourt is attempting to wangle as part of his financing agreement. In layman's terms, this for now prevents the bankruptcy judge from auctioning off a Dodgers television deal, which essentially would have allowed McCourt to go back door around Major League Baseball.

For now, the Commissioner's Office retains power to accept or to deny whatever media deals McCourt strikes. That is hugely important to MLB because it fears two things:

One, that McCourt is so desperate that he will wind up striking a television deal for below market value (the Dodgers' current television deal still has two more years remaining, that's how far out in front he's negotiating).

And two, that he will use the money from a new television deal to pay off some of his enormous debt (including ex-wife Jamie in their divorce), thus crippling the Dodgers further (and possibly an incoming new owner) because money that should be used for the team won't be there.

-- The deal struck Tuesday allows the Dodgers to draw an initial $60 million of a $150 million agreement with Highbridge Capital to maintain operations essentially for another month, until a July 20 hearing. This allows McCourt to meet this Thursday's payroll, among other things -- and, for baseball, means the other 29 owners will not have to pony up millions of dollars to cover the Dodgers' payroll for at least another month.

Without question, Tuesday's court proceedings were just one more round in what's become a blood bath between McCourt and MLB. Many rounds are left, and what nobody knows is how many more moves McCourt has left before he runs out of money and is squeezed out of the game.

To hear him tell it in meetings at Dodger Stadium, according to sources, he continues to think that he will find a way to retain the team.

Upon filing for bankruptcy early Monday morning in Delaware, one of McCourt's next moves was to bar MLB appointed "monitors" Tom Schieffer and John Allen from their Dodger Stadium offices.

Next? MLB is expected to take steps toward seizing the Dodgers, a right available to baseball as part of the game's constitution. According to the constitution, the commissioner can take the liberty of seizing any club that enters Chapter 11 bankruptcy protection.

Procedurally, MLB must first file a motion seeking termination of the franchise, which a source told the Associated Press is "probably going to happen."

Exactly when is not yet clear.

What is clear is, Tuesday's day in bankruptcy court extended, however briefly, the financially suffocating McCourt's grip on the franchise. But his status as an owner remains on life support.

 
 
 
 
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