Seeking working capital, Frank McCourt negotiated a $200-million loan from Fox Sports, using the Los Angeles Dodgers’ broadcast deal as collateral — a risky deal that was ultimately shot down by Commissioner Bud Selig. More money woes from the MLB world.
The deal was simple: Fox would lend the Dodgers $200 million. If the loan was not repaid, Fox could extend the current Dodgers broadcasting deal for $50 million a year. A bargain, when you consider large-market media deals are usually much more lucrative: in Dallas-Fort Worth, Fox Sports pays $80 million yearly to the Texas Rangers ownership for TV cable rights.
That the Dodgers are in serious debt is not an issue: as of November 2009 that debt was $430 million, and it’s doubtful much headway was made on that figure if McCourt is seeking such an unorthodox source of capital — the traditional lines of credit available to MLB owners much be tapped out. The loan was turned down by Selig several weeks ago, but no one is commenting.
Part of the reason, we’re guessing, is that Selig didn’t want to see a new owner hamstrung by the arrangement: Jamie and Frank McCourt are still settling their assets in divorce, and the Dodgers are one of the biggest assets. Selling the team remains a very strong possibility as a way to satisfy the demands of both, although Frank McCourt continues to insist he’s the sole owner of the team. By borrowing against what is still arguably a marital assets, McCourt would be diminishing the value of that asset.
This sort of loan is still a side issue to the larger question: what becomes of the Dodgers and Dodger Stadium as assets are divided. Jamie McCourt won an early court decision that recognized her as an owner of the Dodgers, but the court fight is far from over.
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