LA Dodgers file for bankruptcy protection

[News_Editor]

LA Dodgers file for bankruptcy protection

2011-06-28 00:21:47 GMT+7 (ICT)

LOS ANGELES (BNO NEWS) -- The Los Angeles dodgers on Monday announced that the organization filed for bankruptcy protection after owing around $30 million in payroll obligations, Major League Baseball (MLB) reported.

Frank McCourt, Dodgers' owner, sought the intervention of the court after MLB interfered with the organization's operations and Commissioner Bud Selig rejected a $3 billion television deal with Fox Sports. The acclaimed franchise is now likely to be sold in the near future.

Selig claimed that the lucrative deal would not be beneficial for the club on the long term as well as for the best interests of baseball. On the other hand, McCourt said that Selig's actions have been risking the finances of the team.

"It is my hope that the Chapter 11 process will create a fair and constructive environment to get done what we couldn't achieve with the Commissioner directly," said McCourt in a statement.

Reportedly, the 17-year agreement between Los Angeles Dodgers and Fox Sports would have injected $235 million into the organization immediately in order to cover the team's payroll. The current television deal with FOX runs out in 2013.

"This transaction would make the Dodgers financially secure for the long term and one of the best capitalized teams in Major League Baseball," said Steve Susman, senior partner of Susman Godfrey. "Commissioner Selig's letter of rejection is not only a disappointment, but worse, is potentially destructive to the Los Angeles Dodgers, and MLB."

In late April, Selig appointed Thomas Schieffer, former president of the Texas Rangers, to monitor operations of Los Angeles Dodgers franchise after the league took over the organization due to the financial issues of McCourt.

In addition, MLB urged McCourt to settle his divorce dispute with Jamie McCourt, his wife of 29 years who also served as CEO of the club until 2009. Frank and Jamie reportedly reached an agreement but the FOX deal was rejected anyway.

This was the third time in recent MLB history that the Commissioner's office has taken over operations of a club. Last year, the Texas Rangers, the American League champions, were placed under operational control of MLB. The situation was resolved in a bankruptcy court and the team was sold for $550 million.

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