SBJ/November 7-13, 2011/Franchises

Dodgers auction averts ‘heartache’ for MLB

MLB Commissioner Bud Selig for months has avoided saying anything of substance publicly about the fractious bankruptcy battle surrounding the Los Angeles Dodgers. But even as he kept mum, Selig last week gained one of the most important victories of his 19-year tenure running baseball.

Embattled Dodgers owner Frank McCourt at last agreed to a bankruptcy court settlement with MLB in which he consented to a court-supervised sale of the team, Dodger Stadium and related assets. A sale for the Dodgers package, perhaps exceeding $1 billion and setting a new all-time benchmark for the sport, could be done in time for Opening Day 2012.

McCourt’s attorneys had planned to grill MLB Commissioner Bud Selig at a Nov. 29 hearing.
Photo by: GETTY IMAGES
Neither Selig nor McCourt spoke publicly last week on the settlement and impending sale, issuing only a brief statement in the late night hours of Nov. 1. But it’s precisely the outcome Selig has wanted, as McCourt has sunk further into debt, fought through a nasty divorce with estranged wife Jamie, and lost the confidence of much of the Dodgers’ fan base.

But beyond the general victory for MLB, Selig also avoids further unease as the settlement cancels out an important evidentiary hearing in Wilmington, Del., that had been scheduled to begin Nov. 29. During that court session, competing reorganization plans from MLB and the Dodgers were to be argued, and both McCourt and Selig were slated to testify.

Such forums in which he is not in control are not a strong suit for Selig, as witnessed in several difficult congressional hearings in Washington, D.C., over the past decade. And during the bankruptcy court evidentiary hearing, Dodgers attorneys were planning to grill Selig in cross-examination about his approval of McCourt’s 2004 purchase of the Dodgers and subsequent business plans for the club, and public praise he bestowed upon McCourt at several points during his ownership tenure.

Even as bankruptcy court Judge Kevin Gross had strongly signaled that he intended to guide the case strictly along bankruptcy law, and not turn it into a trial on the commissioner’s powers and McCourt’s allegations of bias against him, the sessions were likely to be uncomfortable for Selig.

“This [settlement] avoids so much heartache all around,” said a league source.

Added sports business consultant Marc Ganis of SportsCorp Ltd. in Chicago, “The cross-examination would have been very hard, very tough on Bud. On one level, it certainly had the potential to embarrass him, but the [Dodgers] lawyers would have also been going after leverage to try to help McCourt, perhaps to force a more favorable settlement.”

New ownership for the Dodgers also could be one of the final major pieces of Selig’s legacy as commissioner if he steps down at the end of his current contract in December 2012, as he says he intends to. A new collective-bargaining agreement to extend baseball’s labor peace is expected soon. A realignment of the National and American leagues, and an expansion of the postseason structure are also possible arrivals within the next year. But overseeing the arrival of a new and ideally more well-financed owner for the Dodgers, long a flagship franchise for the league, could be among the final stamps of Selig’s tenure.

Even before a formal procedure for a Dodgers sale has been set up by the court and McCourt’s investment banker, The Blackstone Group, potential bidders are lining up. Among the early interested parties are former Dodgers general manager Fred Claire; Dennis Gilbert, a former agent and special assistant to Chicago White Sox owner Jerry Reinsdorf; Pittsburgh Penguins co-owner and supermarket magnate Ron Burkle; and former Dodgers owner Peter O’Malley, who sold the team to Fox in 1998.

“I’m very pleased the Dodgers now will soon be reconstituted,” said Oakland A’s owner Lew Wolff, who is based in Los Angeles but has long denied any personal interest in acquiring the Dodgers. “It’s good for both [McCourt] and for baseball.”

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