Frank McCourt and MLB Reach Agreement to Sell LA Dodgers
November 2, 2011
Los Angeles Dodgers owner Frank McCourt and Major League Baseball (MLB) reached an agreement late last night (Tuesday) to sell one of the sport’s most storied franchises.
This ended a seven-year run that included four trips to the postseason before recently becoming mired in legal troubles capped by a filing for bankruptcy protection.
A joint statement said there will be a “court-supervised process” to sell the team and its media rights to maximize value for the Dodgers and McCourt. The Blackstone Group LP will manage the sale, which could include Dodger Stadium and the surrounding parking lots.
The announcement came as the Dodgers and MLB were headed toward a showdown in U.S. Bankruptcy Court in Delaware at the end of the month as mediation between both sides was ongoing.
McCourt and baseball Commissioner Bud Selig have traded barbs since MLB took control of day-to-day operation of the team in April over concerns about the team’s finances and the way it was being run. McCourt apparently realized a sale of the team he vowed never to give up was in his best interest and that of the fans.
McCourt filed for bankruptcy protection in June after the league rejected a 17-year TV contract with Fox, reported to be worth up to $3 billion, that he needed to keep the team afloat. Selig noted that almost half of an immediate $385 million payment would have been diverted from the Dodgers to McCourt.
The franchise’s demise grew out of Frank McCourt’s protracted divorce with Jamie McCourt and the couple’s dispute over the ownership of the team. The divorce, which played out in public in court, highlighted decadent spending on mansions and beach homes and using the team as if it were their personal credit card. They took out more than $100 million in loans from Dodgers-related businesses for their own use, according to divorce documents.
Last month, Jamie McCourt cut a deal with her ex-husband to settle their dispute over ownership of the team they bought in 2004 for about $430 million.
The terms of the settlement between the McCourts weren’t disclosed publicly, but a person familiar with it who requested anonymity because it’s not meant to be public told The Associated Press that Jamie McCourt would receive about $130 million. She also would support the media rights deal worth up to $3 billion.
That removed her from the number of opponents Frank McCourt was facing in bankruptcy court because Jamie McCourt had initially lined up behind MLB and Fox in asking the bankruptcy court to reject his bid to auction Dodgers television rights.
A new owner would be the third since Peter O’Malley sold the team to News Corp. in 1998. The Dodgers had remained in the O’Malley family since Walter O’Malley moved the team from Brooklyn to Los Angeles in 1958.