Sale of the Dodgers Is Not a Done Deal

The highly leveraged bid by Frank McCourt to buy the Dodgers may still be put to a conference-call vote of major league owners before the Jan. 31 deadline, but approval may not be the done deal industry officials portrayed it to be last week.

As owners began two days of business meetings Wednesday, a high-ranking official said “issues pertaining to baseball’s debt-equity rule” in McCourt’s $430-million proposal to buy the team from News Corp. entirely through loans continue to be a concern. That concern will prompt what could be a critical series of meetings for McCourt and his wife, Jamie, with baseball officials and lawyers in Los Angeles next week.

In addition, the high-ranking official said, there is concern about McCourt’s operating revenue if approved.

“The man has $400 million in net worth,” the official said. “That’s not the issue. The concern is with his liquidity.”

Although the level of the overall concern is still difficult to measure, baseball may force McCourt to take a stronger equity position -- “he may have to put up some of this own money,” the high-ranking official said -- and he may be asked to better document how the loans will be repaid.

Baseball’s ownership committee discussed McCourt’s proposal for several hours Wednesday.

It will present a report on the proposal to the full ownership this morning, but it has still not prepared a voting recommendation, the usual next step.

Bill Bartholomay, the longtime Atlanta Brave executive and committee chairman, said the proposal is still being worked on by baseball lawyers.

“The technical people have it,” he said. “I’d call it a work in progress.”

Would he expect it to be approved eventually?

“I’m an optimist by nature,” Bartholomay said. “That’s all I can say about it.”

A person close to McCourt (who would have attended these meetings only if a vote had been scheduled) expressed surprise about the lingering concern.

He said it was his understanding that the finer points of the proposal had been resolved in Phoenix at a meeting Friday that included McCourt and his wife, two members of the ownership committee (Bartholomay and Chicago White Sox Chairman Jerry Reinsdorf); News Corp. official Gary Ehrlich, and baseball’s executive vice president of finance, Jonathan Mariner. Baseball lawyer Tom Ostertag and Chief Operating Officer Robert DuPuy participated by phone.

In a report that appeared in Saturday’s editions of The Times, DuPuy characterized that meeting as very positive and said he did not foresee any significant obstacles in the path of approval.

The individual close to McCourt referred to those comments on Wednesday and said he was “not aware of anything that has happened that might change the way [DuPuy] characterized it last Friday.”

Maybe not, but DuPuy revealed Wednesday that the same group that met in Phoenix would meet again in Los Angeles next week, a sure indication there are unresolved problems with the proposal.

Ultimately, McCourt needs three-fourths approval of the 30 clubs, and he must complete the transaction by Jan. 31, at which point his exclusivity with News Corp. would end and he would be forced to pay a significant penalty.

No date has been set for a conference call, and Commissioner Bud Selig refused to predict Wednesday whether McCourt would be approved if a vote occurs.

Selig took issue, however, with the perception that he may be forcing owners to accept McCourt simply because of his desire to placate News Corp., which subsidizes baseball through its national and regional TV contracts.

“Rules are rules,” he said, “and there are no exceptions.

“We have very stringent ownership rules that are for everyone’s protection and they will be fastidiously and aggressively applied.

“We need the Dodgers to be the Dodgers; they’re one of our flagship franchises, but we have to be positive they’ll be operated in a manner that their fans deserve.”

One way or the other, some theorists believe, Selig has set the stage, satisfying News Corp. Chairman Peter Chernin.

If McCourt is approved, News Corp. finally gets its wish and is out as owner.

If he isn’t approved, or doesn’t get to a vote, Selig can assure Chernin he did all he could and took it as far as he could.