Frank and Jamie McCourt have reached a divorce settlement in a costly and nasty feud over control of the Los Angeles Dodgers, paving the way for a showdown in bankruptcy court between the embattled team owner and Major League Baseball.
The agreement sees Jamie McCourt withdrawing her opposition to the proposed sale of the Dodgers’ media rights, a move her ex-husband says would alleviate his financial woes. Instead, she will file a motion supporting the process, according to the statement. She is reported to get $130 million from the settlement.
A source close to the proceedings told ESPN the Magazine’s Molly Knight that under terms of the settlement agreement, Frank McCourt must pay the entire $130 million by a set date in 2012.
Victoria Cook, one of Frank McCourt’s attorneys, said: “We’re looking forward to having her support of the Dodgers plan as the bankruptcy case goes forward.”
A Los Angeles judge still has to sign off on the agreement, but once he does the settlement effectively ends the divorce saga that began two years ago after Frank McCourt fired Jamie McCourt as the Dodgers’ CEO.
In a separate statement, a spokesman for Jamie McCourt said she was willing to accept a settlement, even if it meant giving up her interest in the Dodgers, “if a fair resolution were possible.”
“That has now been achieved through the cooperation of everyone involved and Jamie looks forward to moving on and focusing on new opportunities,” the statement said.
The divorce case has been placed on hold until a bankruptcy court in Delaware determines the fate of the team. A hearing is scheduled for Wednesday and a judge will consider dueling motions over four days starting Oct. 31.
The agreement removes Jamie McCourt, who had asked the divorce court to order the Dodgers sold, as an obstacle in Frank McCourt’s bid to keep ownership by selling team television rights.
The settlement now allows Frank McCourt to focus on his battle with MLB, which is seeking permission from a bankruptcy judge to file a reorganization plan that calls for McCourt to sell the Dodgers.
Attorneys for Frank McCourt have argued a media rights sale is the best path out of bankruptcy for one of baseball’s most storied franchises.
But baseball commissioner Bud Selig rejected the 17-year TV contract with Fox, reported to be worth up to $3 billion, noting in part that almost half of an immediate $385 million payment would have been diverted from the Dodgers.
On June 27, Frank McCourt took the Dodgers into bankruptcy. Jamie McCourt subsequently lined up behind Major League Baseball and Fox in asking the bankruptcy court to reject Frank McCourt’s bid to auction Dodgers television rights.
If Frank McCourt were to prevail in bankruptcy court, it’s unclear whether the judge would allow him to tap into the TV money to pay the settlement. It’s also unknown whether the proceeds from the sale of the team would even exceed $130 million.
MLB had assumed control of the club’s day-to-day operations in mid-April before the team filed for bankruptcy. Former Texas Rangers president Tom Schieffer was appointed to monitor the team on behalf of Selig, who said he took the action because he was concerned about the team’s finances and how the Dodgers are being run.
A group backed by Chinese government-owned investment banks had made a $1.2 billion offer to buy the Dodgers, but Frank McCourt has repeatedly said he’s not interested in selling the team.
