L.A. Dodgers owner, Frank McCourt, has filed for Chapter 11 bankruptcy protection in a Delaware court today. McCourt suggests that a television deal that would had prevented the legal protection he had sought was nixed by Major League Baseball (MLB) Commissioner Bud Selig. The deal would had been signed with Fox and worth a reported $3,000,000,000 USD – Selig suggested it would not be in the best interest of the Dodgers.
McCourt has also managed to secure a loan from a JPMorgan Chase (JPM) sub-unit named Highbridge Principal Strategies, a loan worth $150,000,000 USD to provide operational capacity for the Dodgers’ for the duration of bankruptcy proceedings. The loan is not completely processed, however, and still needs to be approved by a court. McCourt said in a statement, “There will be no disruption to the Dodgers day-to-day business, the baseball team, or to the Dodger fans.”
Bankruptcy protection will provide the Dodgers with free will of entering a television deal with a network without the guidance of Selig that would secure the financial integrity of the team and be able to pay debts – there are players that are currently owed back-pay that the ball club has been unable to pay, as one example. The contract with FOX would have provided an immediate $385,000,000 USD payment which would originally prevented bankruptcy according to McCourt.