The act seems to be Selig’s response to the team borrowing $30 million from Fox in order to cover the team’s payroll.
Frank McCourt has owned the team since 2004, when Rupert Murdoch’s Fox Entertainment Group sold it to him for $430 million dollars. McCourt’s financial troubles may have began there. To purchase the franchise he had to borrow all but $9 million of the total funds.
Over the following years McCourt would continue entrenching himself and the team in astronomical debt totaling $459 million by 2009. Much of the money borrowed on behalf of the team was used by McCourt personally to subsidize his and his estranged wife’s lavish lifestyle.
The financial details of the team have been exposed and exasperated by the divorce proceedings of McCourt and wife Jamie, who contends that half the franchise is entitled to her. She was fired by McCourt from her chief executive position with the team in October 2009, only weeks before she filed for divorce.
In a press release Selig stated concern for the Dodgers and their fans, referring to the team as “one of the most prestigious teams in all of sports.”
The team, though, is far removed from its former glamour, having won its last World Series in 1988.
Selig’s unprecedented move comes on the very heels of the Texas Rangers filing for bankruptcy early in the 2010 season (which trailed the Chicago Cubs filing for bankruptcy the year prior) and calls into question the standards at which the MLB operates. Forbes blogger Monte Burke points out the NFL and NBA’s ability to monitor and redirect teams which fall into trouble. Only last year, the National Basketball Association calmly assumed control of the New Orleans‘ Hornets (a playoff contender) for financial reasons.
Ultimately, Selig’s move is expected to result in the forced sale of the Los Angeles Dodgers, which is currently valued at around $800 million.