Bloomberg News

LA Dodgers Should Be Sold for Sake of All MLB Teams, Selig Says

September 24, 2011

Sept. 24 (Bloomberg) -- Major League Baseball Commissioner Bud Selig’s lawyers told a bankruptcy judge that Los Angeles Dodgers owner Frank McCourt should be forced to sell the club because his actions threaten all the league’s teams.

The league opposes McCourt’s plan to keep the team and raise enough money to get out of bankruptcy by auctioning cable- television rights to Dodgers’ games, attorneys for Selig said in court papers filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

McCourt “is attempting to use these Chapter 11 cases improperly as a device to cure his own personal financial woes,” MLB said in the filings.

Selig asked U.S. Bankruptcy Judge Kevin Gross to strip McCourt of exclusive control of the bankruptcy case. He accused McCourt of putting his interest ahead of the club’s and of violating MLB rules designed to benefit all teams. The league asked Gross to hold a hearing on its motion on Oct. 12, the same day the Dodgers want their auction proposal considered.

The Dodgers said in a statement that the MLB request was meritless.

The plan to sell television rights “is designed to maximize the value of the Dodgers so it has the opportunity to emerge successfully from Chapter 11,” the team said in the statement yesterday. “The alternative offered today by Major League Baseball really amounts to an unnecessary and value destroying distressed sale of the Los Angeles Dodgers.”

The Dodgers filed for bankruptcy in June after Selig rejected McCourt’s first attempt to sell the television rights. That deal would have extended the right of News Corp.’s Fox Sports to televise the games.

McCourt’s Lawyers

Selig also asked Gross to remove McCourt’s two bankruptcy law firms, Dewey & LeBoeuf LLP and Young Conaway Stargatt & Taylor LLP. The league said the firms were representing McCourt’s interests and not those of the Dodgers.

Fox has argued in court papers that trying to sell the television rights may violate the company’s current contract, which runs through the 2013 baseball season. Fox holds an exclusive right to negotiate for a contract extension until 2012.

Should McCourt sell the television rights without Selig’s approval, the Dodgers could be kicked out of Major League Baseball, the league said.

Loan Restrictions

After the Dodgers filed bankruptcy, McCourt fought MLB in court over who would loan the team enough money to keep operating while it reorganized. The league won the right to loan the team $150 million, although Gross removed some restrictions that the Dodgers claim would have given Selig too much control over the club.

During the loan fight, MLB raised many of the same complaints about McCourt’s handling of the Dodgers that it made in yesterday’s filing.

McCourt has accused Selig of treating him differently than other owners in the league.

The case is In re Los Angeles Dodgers LLC, 11-12010, U.S. Bankruptcy Court, District of Delaware (Wilmington).

-- Editors: Michael Hytha, Peter Blumberg

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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