News Corporation has a prominent role in the cases of Major League Baseball v. Frank McCourt, the controversial and financially troubled owner of cornerstone baseball franchise Los Angeles Dodgers. Loans from News Corp. to McCourt are unacceptable financial underpinnings as far as Commissioner Bud Selig is concerned.
According to reports, the Dodgers franchise is heavily in debt, and has had highly questionable finances ever since McCourt bought it back in 2004. The fact that he bought if from News Corp. puts the multimedia giant into the story at the ground floor level.
At this point in the story, McCourt and his wife Jamie are engaged in a messy divorce in which she is seeking joint control of the team. On top of that, McCourt needed a $30M loan from Fox to meet current team expenses, including payroll.
It is also being reported that the Dodgers wish to execute a long-term broadcast rights deal with News Corp. and use it as collateral for a $200M advance loan. That move was nixed by Selig.
Baseball Commissioner Bud Selig has announced his plans to install a trustee to oversee the team’s day-to-day operations. It will also monitor how it spends money and will likely put limits on player signings and contract extensions.
“I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the club, its great fans and all of Major League Baseball,” he said. “My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt’s ownership.”
For his part, McCourt believes he is operating within the financial guidelines expected by the league.
It is believed that the league actions will put the team on the path to resale.