Dodgers' Bankruptcy is Frank McCourt's Last Stand as Owner
Dodgers' owner for the moment, Frank McCourt, doesn't have many good options right now. After the MLB refused to go long with his TV deal with Fox to raise money, McCourt was almost out of operating cash. So now, he has been forced go to his court of last resort - bankruptcy.
McCourt must convince a bankruptcy judge that he possesses the best plan to keep the Dodgers' viable and to reorganize and pay the team's debts. To do this, McCourt may have acquired some short term financing from a hedge fund. But to ultimately survive, McCourt needs the TV deal to obtain operating funds.
The problem for McCourt is that many observers believe the Fox TV deal undervalues the worth of the teams broadcast rights. In a bankruptcy proceeding , the court must seek to maximize the team's assets to ensure its financial obligations will be met. In sum, the court doesn't have to sign on to any bad deals. If the court was presented with another option, such as, a new owner with fresh cash and no need to make a bad TV deal,then McCourt's days as team owner may be numbered.
My name is Christopher Fusco. I am the managing partner of Callahan & Fusco, LLC with offices in New York, New Jersey, and Pennsylvania.