Things just continue to go from bad to worse for the Dodgers in their current financial predicament.
Delaware Judge Kevin Gross rejected the Los Angeles Dodgers’ proposed $150 million bankruptcy financial plan on Friday, a ruling that clearly favors Major League Baseball. The judge said that the team failed to show that the terms of its secured financing with JP Morgan’s Highbridge were fair, and directed the team to negotiate a loan deal with MLB, whose terms of an unsecured loan offer are much more favorable.
It is important to keep in mind that the Dodgers previously rejected MLB’s offer. This latest ruling should only increase tension in the feud between Bud Selig and Dodgers’ owner Frank McCourt. The Dodgers have refused to negotiate with Major League Baseball over the last several weeks, and they fear that baseball’s commissioner is trying to take control of the team to force a sale.
Selig has denied the Dodgers’ attempts to sign media rights deals with FOX on three occasions this year, and since it is highly unlikely that a TV rights deal will be completed at this point, a loan with MLB may be the only option.
"We are pleased that the court has agreed with our position with respect to providing the DIP financing and shares our long-standing view that the proposal put forth by Major League Baseball is the best option for the Los Angeles Dodgers franchise. Major League Baseball remains committed to serving the best long-term interests of the Dodgers and their fans.~Statement made by MLB Executive VP Rob Manfred"
The judge made his decision based solely on debtor-in-possession (DIP) financing, and any and all arguments as far as the team’s management will be addressed at a later time. Unless Frank McCourt is willing to give in and make a sacrifice, there may be no end in sight for the Los Angeles Dodgers franchise.
For more on the Dodgers, be sure to check out Lasorda’s Lair.