Dodgers File For Chapter 11, Future Still Looks Bleak
June 27, 2011 in Uncategorized
The Dodgers have filed for bankruptcy after Major League Baseball refused to allow the new TV deal, that would have given the team the cash to make their June 30th payroll. I realize some Dodger fans, and baseball fans are upset with Selig for not allowing that deal to occur, but I think he made the right move.
Frank McCourt's TV rights deal was a bad deal for both the Dodgers and baseball and only was made to benefit Frank McCourt and ensure he could maintain possession of the team. His deal sacrificed the Dodgers TV rights at a below market value for a longtime, and would have been a bad deal for a low market team like the Royals much less an iconic team in the 2nd largest TV market like the Dodgers.
While some people have some sympathy for McCourt's situation, I believe he is the problem for this team and don't think that the Dodgers should have to pay for their mistakes. McCourt's bad financial decisions on and off the field have led the Dodgers to the point where they need to be monitored by Selig. He has approved bad contract after bad contract, that has led to a ton of 'dead money' over the last few years. From 2009-2014 the Dodgers will have spent over $60 million in players for not to being on their roster. That is just unsustainable to sign all of their actual players, while paying for players they don't want. In addition if the reports are true the McCourts have borrowed at least $100 million against the Dodgers, but not to pay for team operations. That is completely irresponsible and one of the biggest reasons for why L.A. is in the hole that they are in.
Now I don't like the idea that the team will need to make bad baseball decisions simply because the ownership can't afford to pay his bills, but let's be honest they were making bad baseball decisions long before this occurred. And while it is a bit unfair, it wouldn't be fair for the Dodgers 5 years from now to have a lower payroll than they should because they gave up their TV rights at a well-below market rate. Hopefully for the team's sake McCourt will look to sell a majority stake of the team, but giving his impending divorce proceedings it will be harder to find a buyer. If the Dodgers do have to start selling players, the good news is that they have some players with value (Matt Kemp, Andre Ethier, Jonathan Broxton etc.) that should allow them to both save money and acquire some quality prospects. It could make the next year or two rough in Dodger Town, but it is the best for the team as long as McCourt is at the helm.