Embattled Los Angeles Dodgers owner Frank McCourt today gave his strongest indication yet that he will sue Major League Baseball for standing in the way of his attempt to extend the Dodgers’ cable TV deal with Fox.
McCourt spoke to reporters in New York City shortly after saying he got word in a meeting with MLB executives that commissioner Bud Selig had vetoed the deal, which McCourt said would extend Fox’s cable coverage of the Dodgers through 2027 and also provide an equity stake in Fox’s Prime Ticket. The Dodgers’ current deal with Fox runs through 2013.
“I’m very committed to my position,” McCourt said. “We have not decided exactly what we’re going to do. We’ll keep you posted, but as I said, I’m not going anywhere. This is a team that I love, a community that I love. … I’m going to protect my rights.”
However, MLB later issued a statement saying that it had not vetoed the Fox deal, but was waiting to rule on it pending its investigation into McCourt’s and the Dodgers’ finances.
“It is unfortunate that Mr. McCourt felt it necessary to publicize the content of a private meeting,” said MLB exec veep of labor relations Rob Manfred. “It is even more unfortunate that Mr. McCourt’s public recitation was not accurate. Most fundamental, Commissioner Selig did not ‘veto’ a proposed transaction. Rather, Mr. McCourt was clearly told that the Commissioner would make no decision on any transaction until after his investigation into the Club and its finances is complete so that he can properly evaluate all of the facts and circumstances.”
McCourt suggested, however, that that investigation had a “pre-determined” outcome.
Media reports have pegged the value of the proposed Fox-Dodger deal as high as $3 billion, a figure McCourt did not dissuade reporters from using, though Joe Flint of the Los Angeles Times has questioned that, reporting Tuesday that the revenue from the extension would only be $1.3 billion. In any case, questions have been raised whether McCourt’s well-chronicled financial issues, which date back to his highly leveraged purchase of the franchise in 2004, have forced him into negotiating a less-than-favorable deal for the Dodgers.
Selig, who approved the McCourt purchase seven years ago, initiated a takeover by MLB of the Dodgers’ day-to-day operations last week out of concerns that McCourt’s ownership practices were against the best interests of the franchise and the sport. By blocking the Fox-Dodger deal and preventing the cash infusion that would come with it, Selig jeopardizes McCourt’s ability to maintain ownership of the team while in a tumultuous divorce with Jamie McCourt.
Earlier this month, Fox — eager to keep the deal alive as it frets over the possibility of the Dodgers following the Lakers to Time Warner Cable — reportedly made a $30 million personal loan to McCourt just to help him make payroll.
In a nod to the concerns over how much Dodger revenue he and his now-estranged wife had allocated for personal spending, McCourt said today that the proposed Fox deal would include an immediate payment of $300 million going directly into the Dodgers.
“None of those dollars (would be) used in any personal way,” McCourt said.
“I think I made some mistakes. I’m sorry about that, and I’m definitely commited to doing things differently moving forward. … I think everyone deserves a second chance.”
While apologetic with regard to some of his conduct, McCourt remained aghast that the TV deal was being held up.
“I think it is fundamentally wrong for any person to stand in the way of a transaction which is a sound business transaction, which I and my organization have every right to enter into,” he said. “It is a transaction that is complete consistent with transactions that other clubs have entered into.”
MLB has a longstanding antitrust exemption that allows it to have widespread powers over its owners. That being said, Selig wouldn’t be able to make this stand against McCourt unless he had the support of the sport’s other owners.
McCourt entered into an agreement not to sue MLB when he bought the Dodgers, but he might challenge that provision on the premise that Selig’s actions have been malevolent and unfair — as well as the premise that MLB might settle rather than endure a trial. Few observers of the sport believe McCourt could win his case outright.