The Los Angeles Dodgers and their owner, Frank McCourt, filed for protection under Chapter 11 of the U.S Bankruptcy Code in a Delaware court on Monday.
The decision was made following the Major League Baseball commissioner Bud Selig’s refusal to sign off on a 17-year television contract McCourt had agreed upon with Fox Sports. The multi-billion dollar deal would have provided the team with $390 million in upfront cash for the team to pay its creditors, who include Manny Ramirez, owed almost $21 million; Andruw Jones, owed $11 million, and Hall of Fame Broadcaster Vin Scully, owed $152,773.
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According to a Dodgers’ press release, the team has received $150 million in Debtor in Possession financing that will allow the team to meet its current obligations as they struggle with their financial situation.
McCourt said in a statement that he blames the necessity to file for bankruptcy on Selig’s decision to refuse the deal he had set up with Fox.
“[Selig has] turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today,” McCourt said. “I simply cannot allow the Commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer. It is my hope that the Chapter 11 process will create a fair and constructive environment to get done what we couldn’t achieve with the Commissioner directly.”
In a statement from the Dodgers, the team claims “there will be no disruption to the Dodgers day-to-day business, the baseball team, or to the Dodger fans.”
McCourt said in the same statement that the team will continue to operate amidst these tough times and that the bankruptcy proceedings will be for the benefit of the Dodgers.
“The Chapter 11 process provides the path on which to position the Los Angeles Dodgers for long-term success,” McCourt said. “The process will allow us to focus on maximizing value in a manner that is transparent and driven by the best interests of the Los Angeles Dodgers and our fans.”
The payroll for the Los Angeles Dodgers is due this Thursday and the team plans on meeting its obligations despite the recent bankruptcy filing.