LA Dodgers Filing Bankruptcy

Jun 24

LA Dodgers Filing Bankruptcy

The Los Angeles Dodgers are entering Chapter 11 bankruptcy protection today as the team continues to struggle financially in the wake of the divorce case of team owners Frank and Jamie McCourt.

The Dodgers had been hoping to use a massive TV deal with Fox to keep the team afloat. The new deal would provide $385 million upfront, but Major League Baseball refused to approve it.

MLB has been in control of the team since April, which has been in financial hot water since the team’s owners announced they were getting divorced.

Frank and Jamie McCourt owned the Dodgers together, but their divorce case has revealed the couple routinely used team funds to pay for their lavish lifestyle. The Associated Press reports they took out more than $100 million in personal loans from team accounts.

Now, the team is nearly broke and faces the possibility of missing a payroll payment at the end of June. If that happens, MLB may step in and take the team completely out of the hands of the McCourts.

Frank McCourt was the original owner of the team, and Jamie worked as the Dodgers CEO until she was fired by – you guessed it, Frank McCourt. A judge, however, ruled that because of their marriage she could claim half ownership of the team, according to California law.

Since then, the future of the Dodgers of has been up in the air, with the possibility of a sale of the franchise looking likely. Frank McCourt hoped to use funds from the TV agreement to reach a deal that would allow him to keep the team. Without the TV money the McCourts are headed back to court to decide the future of their assets.

The Dodgers are by no means the first professional sports team to file bankruptcy. In the last decade baseball’s Chicago Cubs and Texas Rangers filed for chapter bankruptcy, as did the NHL’s Phoenix Coyotes.

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