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SBD/September 26, 2011/FranchisesPrint All
MLB late Friday made its boldest statement yet in the ongoing Dodgers bankruptcy case, petitioning the court to have the team sold and asserting it would approve no TV deal that involved Owner Frank McCourt keeping the team. The filing arrived in response to a move earlier this month by the Dodgers to establish a quick, two-stage process to sell the cable TV rights. MLB argues that proposal at once violates league bylaws, tramples upon current rights held by FSN, and does not address the larger issues surrounding McCourt, such as his ongoing divorce and mounting Dodgers fan apathy. The Dodgers' proposed path from bankruptcy "is a dead end or worse," the 98-page filing with the U.S. Bankruptcy Court for the District of Delaware reads in part. "The only path to emergence is through a sale of the Dodgers, and Major League Baseball respectfully requests that this Court terminate exclusivity so that such a sale can take place. Mr. McCourt simply refuses to pursue a reorganization strategy that can produce a confirmable plan. ... [He] is attempting to use these Chapter 11 cases improperly as a device to cure his own personal financial woes." MLB, which has already rejected three proposed TV extensions between the Dodgers and FSN, added that any further proposed rights deal involving McCourt is "dead on arrival." A hearing on the matter is scheduled for Oct. 12, the same day Judge Kevin Gross is slated to hear arguments on the club's proposed TV rights sale. The MLB-McCourt dispute threatens to place the authority of the court up against that of MLB Commissioner Bud Selig. But MLB in its filing asserts that its league constitution remains intact. "The bankruptcy code does not displace Major League Baseball's approval rights and power under the Baseball Agreements," the filing reads. "Moreover, a sale of the Dodgers' media rights without Major League Baseball approval would subject [the Dodgers] to potentially severe discipline, including possible termination from the league. Compliance with the Baseball Agreement is the price of membership in Major League Baseball."
THE DODGERS' TAKE: The Dodgers, not surprisingly, took strong issue with MLB's move, and branded it "meritless." "The inaccuracies in the 'facts' recited in the motion and the false characterization of other matters are offensive and too numerous to mention," the club said in a statement. "MLB's motion also ignores the fact that the Commissioner has treated the Dodgers differently from other Major League Baseball Clubs and that the Commissioner's actions starved the Dodgers of cash and caused the bankruptcy filing." The Dodgers, expected to file a response to MLB's motion this week, added, "in U.S. bankruptcy reorganization cases, liquidation is the last resort, not the first option. ... The alternative offered today by Major League Baseball really amounts to an unnecessary and value destroying distressed sale." MLB's filing also yielded several other items related to the Dodgers' financial state. The league said the club's total debt is now approximately $500 million, and a planned $360 million renovation of Dodger Stadium is now on "indefinite hold." The league in a separate filing late Friday also petitioned the court to have the two lead firms representing the club in the bankruptcy case -- Dewey & LeBoeuf LLC and Young Conaway Stargatt & Taylor LLC -- disqualified. MLB asserts they are serving the aims of McCourt personally, and not those of the team or rest of MLB, presenting a conflict of interest (Eric Fisher, SportsBusiness Journal).
LEGALLY SPEAKING: Thomas Salerno, chief counsel for the Coyotes during the team's bankruptcy proceedings, called the MLB filing "gutsy." But he added that MLB "would not necessarily succeed." Salerno said that in the Dodgers' case, "by announcing its rejection of any television deal before an auction could take place, and by signaling its veto of a plan that McCourt could use to pay all the Dodgers creditors in full," the league could be seen as "not acting in good faith." Salerno: "I think MLB runs a risk that the judge says that's not reasonable. ... This case is clearly going to make law. The league is going all in" (L.A. TIMES, 9/24). In L.A., Steve Dilbeck reported MLB "cited fan sentiment on Friday in its request that Gross order the sale of the Dodgers" (LATIMES.com, 9/23).
THE GLOVES ARE OFF: ESPN L.A.'s Ramona Shelburne wrote a "very important thing happened Friday." Shelburne: "Baseball said it still cared. Enough to fight this all the way to the end, no matter how bitter or ugly things may get" (ESPNLA.com, 9/24). YAHOO SPORTS' Tim Brown wrote under the header, "McCourt-Selig Battle Is Getting Personal." Brown: "McCourt views Selig as the worst kind of bully: a megalomaniac with a grudge, a geek with a badge and sidearm. Selig has McCourt typecast as well, as a gluttonous, litigious and desperate squatter who'd sell Tommy Lasorda if it meant a new paint job for the pool" (SPORTS.YAHOO.com, 9/24). The L.A. TIMES' Dilbeck wrote MLB Friday "did away with the feints and jabs and the fancy footwork and just delivered a blow from the ankles." Dilbeck: "Pretense is no longer invited" (LATIMES.com, 9/23).
Devils co-Owner Ray Chambers is "seeking to relinquish his stake in the NHL team as part of an exit strategy aimed to help the financially struggling franchise refinance its debt," according to sources cited by Considine & Horowitz of the Newark STAR-LEDGER. A source said that holding company Brick City LLC, operated by Chambers' son-in-law and Devils co-Owner Michael Gilfillan, has "agreed to pay off a $23 million loan to a lender as part of an arrangement that would allow Chambers, a billionaire philanthropist, to give up his 47 percent share in the team." The source also said that the Devils' other main co-Owner, Jeffrey Vanderbeek, "still owes $23 million from the joint loan that paid for team operations." If approved by the NHL BOG, the deal "would give Vanderbeek a 94 percent controlling interest in the Devils at what may be perceived as a low price." Minority Owner Peter Simon "would continue to own the remaining 6 percent of the team." The deal will also allow Vanderbeek "to pursue financing without Chambers." Sources said that it is "possible a deal with lenders could be in place in one month, with Chambers' departure from the organization" (Newark STAR-LEDGER, 9/26). In N.Y., Josh Kosman noted the deal as structured indicates Chambers, who has been "looking to exit the mostly money-losing franchise for about a year, appears to feel the equity in the NHL team is worthless." The sale of Chambers' stake in Devils Arena Entertainment "also includes his piece of the company that operates the Prudential Center." DAE has "debt of roughly $180 million," and Kosman noted, "Presumably, Chambers' view is the team and arena operations are worth less than that amount." Sources indicated that the co-Owners "need approval from the Devils lending group, and the NHL, to close the deal, which is no sure thing" (N.Y. POST, 9/24).
The NHL "has lent $51.7 million" to the Stars since '09 "to keep the troubled franchise afloat," according to court documents and financial sources cited by Daniel Kaplan of SPORTSBUSINESS JOURNAL. The "figure is disclosed in the bankruptcy filing the Stars submitted earlier this month." The document "shows an entity called CFV I LLC as the Stars’ runaway top creditor, owed $51,691,783." The mailing address for CFV is "care of NHL Enterprises and William Daly," and the sources said that the hockey league "owns CFV." Daly, the NHL's Deputy Commissioner, "declined to comment" (SPORTSBUSINESS JOURNAL, 9/26 issue).
STAR WATCH: In Vancouver, Ed Willes notes Tom Gaglardi's bid to buy the Stars "raises all manner of fascinating issues for the NHL." Among those are Gaglardi's "feud with Canucks owner Francesco Aquilini, Gaglardi's childhood friend, who he sued in a bitter, five year court battle over the Canucks." Willes writes, "Suffice to say that relationship is more toxic than the Exxon oil spill." But Willes notes the potential sale to Gaglardi "is crucial to the long-term stability" of the franchise. Willes writes there "was a time when $265 million would have been laughably low for this franchise and its building," but "it says so much about the state of hockey in Big D that the only bid for the Stars is coming from Vancouver and it's a bargain-basement bid at that." Willes: "Dallas might be saved and it remains an important market for the NHL. Unfortunately, there are too many others in a similar predicament and, at some point, the process of natural selection will determine who survives and who doesn't (Vancouver PROVINCE, 9/26). Meanwhile, in Dallas, Tim Cowlishaw asked, "How do the Stars and the NHL take advantage of an NBA lockout? Or is that even possible?" Cowlishaw: "People tell me it's two different fan bases, and I don't really argue with that statement other than to say there's certainly an overlap. Some fans like a little of everything. And some people in Dallas just want to be out and about, so the absence of Mavericks games creates opportunity for the Stars on that front" (DALLAS MORNING NEWS, 9/23).
The Maple Leafs Friday unveiled their third jersey for the ’11-12 season. The blue sweater, similar to the ones worn from '67-70, will be worn 14 times during the regular season (Maple Leafs). The CP's Gregory Strong noted the jersey “has a white 11-point, wool-felt Maple Leaf crest on the front with white and blue stripes at the elbows and waist.” There is a “touch of white around the collar, vintage six-eyelet laces by the neck and no shoulder pads.” Hockey HOFer Darryl Sittler said, “I think that the message here to the current players is you’re linking the present to the past.” Images of the sweater “first surfaced on the Internet earlier this month." The Maple Leafs said that they "were disappointed the jersey was ‘unexpectedly revealed’” (CP, 9/24). The GLOBE & MAIL's James Mirtle wrote the uniform “was right up there with where the 2012 Winter Classic and entry draft are going to be held as the worst kept secrets in hockey.” Mirtle sarcastically wrote, “The good news is that the Leafs are likely set to make a bundle on these things, and what NHL team needs money more than Toronto?” (GLOBE & MAIL, 9/24).
The Hurricanes played at Time Warner Cable Arena in Charlotte for the first time yesterday and it "could not have worked out any better" for the team or its AHL affiliate, the Charlotte Checkers, according to Chip Alexander of the Raleigh NEWS & OBSERVER. The crowd was "large and loud, with a turnout of 10,433" for the Hurricanes' 4-0 win over the Jets (Raleigh NEWS & OBSERVER, 9/26). Hurricanes C Eric Staal before the game said, "We want to put on a show for the fans we have there. Charlotte is a great city and it's not that far from Raleigh. It will be good to be able to play in that building and enjoy that atmosphere and hopefully get the win. And hopefully build some interest and get some fans to come (to Raleigh) and see some games through the course of the year." Staal and teammates G Cam Ward and C Jeff Skinner "were in Charlotte Saturday for an afternoon appearance" at a fan fest (Raleigh NEWS & OBSERVER, 9/25).
In Dallas, Jeff Mosier reports the Rangers yesterday drew a crowd of 43,508 to their game against the Mariners, bringing attendance “to 2,946,949 for the year, just past the old annual attendance mark of 2,945,244” set in ’97. Team President & CEO Nolan Ryan said that “in just three years, annual attendance at Rangers Ballpark in Arlington has increased by 1 million fans.” Ryan: “It’s pretty amazing when you consider the record heat that we had here.” Mosier notes the “increase of 441,778 over the 2010 total was the biggest single-season jump at the ballpark” (DALLAS MORNING NEWS, 9/26). The team “endured a record 27 games when the temperature at first pitch was at 100 degrees or more” (ESPN.com, 9/25).
KEY PLAYER: In Chicago, Ed Sherman notes White Sox CMO & Senior VP/Sales & Marketing Brooks Boyer “will be a key player in determining the team's direction for 2012.” Boyer is “the point man in formulating budget proposals to hand to Sox Chairman Jerry Reinsdorf.” Boyer said, "Our attendance isn't what we anticipated when we budgeted for this year.” He admitted that the team “will be in the red this year, although he wouldn't get into exact figures.” Sherman writes his “best guess is the Sox will plan for a payroll at” $105-110M. Boyer said fans likely will "see more dynamic ticket pricing from us." Boyer: "It'll be like how the airlines price their tickets. The earlier you buy, the better deal you get” (CHICAGOBUSINESS.com, 9/26).
ON HOLD: In S.F., Susan Slusser noted A’s GM Billy Beane reportedly told LF Josh Willingham’s agent Matt Sosnick that “spending decisions are on hold until a decision comes down about the A’s stadium situation.” Sosnick: “We gave the A's an idea of where we were, and we were told they have interest in bringing Josh back, but before they did anything, they want to see what happens with the stadium. Josh and I both made it clear he'd like to stay, but at this point, I'm pretty sure he'll test the free-agent market.” The A's “have been waiting for a stadium decision more than 2 1/2 years, and this is the first time that club officials have expressed a belief that the process will be resolved shortly” (S.F. CHRONICLE, 9/25).
RED SOX TO GO INT'L? Red Sox President & CEO Larry Lucchino recently said the organization would “love to see” the team play an exhibition game in England or EPL club Liverpool play a game at Fenway Park. Lucchino added, “Preliminary discussions are going on. I’d love to see it sooner than later.” When asked if the Red Sox will “admit when” their sellout streak of 700 games ends, Lucchino said, “You bet. We’ve been threatened a couple of times this year. But for the most part, the sellout streak has been self-perpetuating and requires little focus on our part.” As to whether he would consider succeeding Bud Selig as the next MLB Commissioner, Lucchino said, “I have no illusions about that. I don’t know what the future holds. I’m loving Boston, Fenway, New England, the Red Sox” (BOSTON GLOBE, 9/25).
NINTH TIME A CHARM: ESPN L.A.’s Mark Saxon reported the Angels have drawn more than 3 million fans “for the ninth straight season.” This is the “first year the Angels have outdrawn” the Dodgers, who completed their home schedule Thursday night “with a total of 2,935,139” (ESPNLA.com, 9/25).
In S.F., Matier & Ross reported Franklin Resources Chair & co-Founder Charles Johnson has “quietly become” the Giants “largest stakeholder.” He recently “purchased a portion of the shares held by Trina Dean and Tori Humphrey, daughters of the late financier Harmon ‘Buzz’ Burns.” Johnson was one of the owners “particularly unhappy” with outgoing Managing General Partner & CEO Bill Neukom’s “demand for millions in compensation.” With what is believed “to be more than a quarter of the team’s shares, Johnson will be de facto chairman of the board.” Matier & Ross: “But don’t look for the low-key boss to play a role in day-to-day decision making or even show up at baseball's owners meetings” (S.F. CHRONICLE, 9/25).
STAFF APPRECIATION: In Milwaukee, Don Walker wrote after the Brewers won the NL Central division title, “employees in the organization were invited to go to a stadium club to continue the celebration.” Brewers Owner Mark Attanasio “told the staff the beverages were on him," and he then "addressed the staff." He said that “while the fans and media correctly focused on the players and their performance on the field, he wanted the rest of the staff to know that he considered their work as integral to the success of the team as the players.” A team official said, “It was a great speech. It was a heartfelt thank you.” This is the “second time the Brewers have made the playoffs in the Attanasio era” (JSONLINE.com, 9/25).
DROP AT THE PARK: In St. Louis, Derrick Goold wrote the Cardinals “surpassed 3 million in total attendance” at Friday’s game against the Cubs. It is the “eighth consecutive year the Cardinals have sold more than 3 million, and that includes all six seasons at Busch Stadium III.” But the Cardinals averaged “around 38,000 a game this season, a 6.6 percent drop from 2010 and the steepest decline since Busch III opened.” It is the first time the team has “not had an average of more than 40,000 at the new ballpark” (ST. LOUIS POST-DISPATCH, 9/24).
NOTES: In San Diego, Bill Center wrote Padres Vice Chair & CEO Jeff Moorad said that the team has “already reached a 50 percent renewal rate for season tickets for 2012” (SAN DIEGO UNION-TRIBUNE, 9/24)....In Miami, Juan Rodriguez noted there is a new photo of a hat with the alleged new Marlins logo on it making the rounds on the Internet. Rodriguez: "Bad news for all those Marlins fans who hate the new logo" (SUN-SENTINEL.com, 9/24).