09/23/11 11:12 PM ET
MLB asks judge to order sale of Dodgers
By Barry M. Bloom and Ken Gurnick / MLB.com
MLB told the court that owner Frank McCourt's plan to auction off television rights were a "dead end." Any sale of television rights must be approved by Commissioner Bud Selig, who earlier this year rejected McCourt's tentative extension of the rights to FOX for what has been reported as a high as 17 years and $3 billion.
"The Bankruptcy Code does not displace Major League Baseball's approval rights and powers under the Baseball Agreements," MLB's bankruptcy attorneys wrote in a 79-page document filed with the court late Friday afternoon. "Moreover, a sale of the Dodgers' media rights without Major League Baseball approval would subject the Debtors to potentially severe discipline, including possible termination from the league.
"Compliance with the Major League Agreements is the price of membership in Major League Baseball."
A hearing on McCourt's motion to auction those rights is scheduled in the court of U.S. Federal Bankruptcy Judge Kevin Gross on Oct. 12.
An official in the Commissioner's office said on Friday evening that there would be no further comment from MLB on the matter aside from what's already in the court papers.
"It's all in the documents," the official said.
The Dodgers said in a statement that they will be filing a response to MLB's motion early next week.
"Major League Baseball's motion is meritless," the statement said in part. "It is another step in the Commissioner's continuing effort to cause the sale of the Dodgers notwithstanding that the Dodgers can and will be successfully reorganized as outlined in the recently filed media rights marketing motion. In United States bankruptcy reorganization cases, liquidation is the last resort, not the first option."
McCourt placed the club in bankruptcy protection shortly after the rejection of the FOX proposal. Under orders from the court, McCourt accepted a $150 million loan from Major League Baseball at terms preferable to those McCourt had arranged from a hedge fund to finance operations of the club into next year.
Selig maintains that MLB's right to approve a media deal supersedes the federal bankruptcy process. MLB also stipulated in the motion that the McCourt bankruptcy filing is illegal and not in the spirit of a Chapter 11 filing.
The document says that McCourt is using 11 Debtors who have filed in the case as a shield to protect his own interest in retaining the club and thus has asked the court to terminate all those cases. MLB asked the court to terminate the exclusivity period the Debtors have to restructure the club's finances.
"The Debtors' admittedly cash-strapped owner -- who has not himself sought bankruptcy relief -- is attempting to use the Chapter 11 process improperly as a device to cure his own personal financial woes" and abrogate his "obligations to Major League Baseball," the document says.
Furthermore, MLB states that the Debtors should be wary because there will be no games to broadcast if the Dodgers are not a part of Major League Baseball.
"Consequently the Debtors' path in this case is a dead end or worse," MLB said. "The only path to emergence is through a sale of the Dodgers and Major League Baseball respectfully asks that the court terminate exclusivity so that such a sale could take place."
Barry M. Bloom is national reporter for MLB.com and writes an MLBlog, Boomskie on Baseball. Follow @boomskie on Twitter. Ken Gurnick is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.