Judge sides with MLB, but warns Bud Selig
If Bud Selig wants to strip Frank McCourt of his ownership of the Dodgers for violating baseball rules, the commissioner had better be prepared to prove his case. If he cannot, the business of some other clubs might be aired publicly.
That was the essential fine print in Friday’s ruling by U.S. Bankruptcy Judge Kevin Gross, in which he formally refused the Dodgers permission to obtain documents relating to the other 29 major league teams.
Under the MLB constitution, any owner taking his team into bankruptcy is subject to termination of his franchise, one of several rules the league alleges the Dodgers have violated.
McCourt has argued Selig forced the Dodgers into bankruptcy by rejecting a proposed television contract with Fox Sports, claiming the contract was structured similarly to others approved by the commissioner and that the rejection was but one example of how Selig applied a double standard to McCourt and the Dodgers.
“The Commissioner’s relationship with LAD, including his refusal to approve the media rights sale, is what is at issue,” Gross wrote in his ruling, using “LAD” to refer to the Dodgers, “not what 29 other teams have and/or have not done and why the Commissioner approved or rejected their requests.
“LAD either breached or didn’t breach the Baseball Agreements — the actions of other teams do not bear upon the issue.”
However, Gross left the door ajar for McCourt. In Wednesday’s hearing, MLB attorney Glenn Kurtz said there would be no sense in comparing Selig’s decision on the Dodgers’ television contract with his decisions regarding other clubs and other contracts because he considered every deal on a case-by-case basis.
“Bankrupt guy, liquidity crisis, front-loading [the television money for personal use]?” Kurtz said. “It hasn’t happened once.”
In his ruling Friday, Gross put the burden on Selig to substantiate those claims — to prove why the Dodgers situation is so different that the discussion of other clubs would be irrelevant. That goes to the heart of the case: If McCourt has a financial strategy to pay off the Dodgers’ creditors and get the team out of bankruptcy, why should he not be allowed to pursue it?
“Should the Commissioner falter in proving alleged wrongdoing, the Court may allow LAD to take further, limited discovery,” Gross wrote.
In a statement, the Dodgers suggested Selig would not be able to meet that standard.
“We look forward to the opportunity to demonstrate that Commissioner Selig has not acted in good faith with respect to the Dodgers,” the statement read, “and that the Dodgers have fully complied with the Baseball Agreements and have not engaged in any wrongdoing.”
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