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LA Dodgers: 9 Reasons Why Rejection of FOX TV Deal Affects Current Ownership

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LA Dodgers: 9 Reasons Why Rejection of FOX TV Deal Affects Current Ownership
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After 20 months of wrangling by Los Angeles Dodgers owner Frank McCourt, his estranged wife Jamie and MLB commissioner Bud Selig, the Dodgers are no closer to resolution of their ownership issues after today’s announcement by Selig that MLB will not approve the pending TV rights deal between McCourt and FOX Sports.

In a statement released through MLB.com, Selig said:

"Pursuant to my authority as Commissioner, I have informed Los Angeles Dodgers owner Frank McCourt today in a detailed letter that I cannot approve the club's proposed transaction with FOX. This decision was reached after a full and careful consideration of the terms of the proposed transaction and the club's current circumstances. It is my conclusion that this proposed transaction with FOX would not be in the best interests of the Los Angeles Dodgers franchise, the game of Baseball and the millions of loyal fans of this historic club.

"Mr. McCourt has been provided with an expansive analysis of my reasons for rejecting this proposed transaction. Critically, the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt. Given the magnitude of the transaction, such a diversion of assets would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans.

"As I have said before, we owe it to the legion of loyal Dodger fans to ensure that this club is being operated properly now and will be guided appropriately in the future. This transaction would not accomplish these goals."

While the announcement by Selig does not mean that McCourt is no longer the owner of the Dodgers, there is no question that today’s decision spells the means to the end of the McCourt era in LA.

For weeks, McCourt has said that the financial health of the Dodgers hinges upon approval of the deal worked out between McCourt and FOX Sports, in which FOX would obtain exclusive rights to television broadcasts at a cost of $3 billion over 17 years.

Reportedly $385 million was to be paid upfront by FOX, and recent reports suggest that almost half of the upfront payment would have gone directly to the McCourts, presumably to clear personal debt and to resolve their current divorce settlement.

Just moments ago, Frank McCourt released a statement through the Dodgers' press office:

“We are extremely disappointed with the Commissioner’s rejection of the proposed FOX transaction which would inject $235 million into the Los Angeles Dodgers.  As Commissioner Selig well knows, this transaction would make the Dodgers financially secure for the long term and one of the best capitalized teams in Major League Baseball.

“For  weeks Major League Baseball  has consistently made public pronouncements asserting that Jamie McCourt’s agreement of the Fox transaction also was  needed; that the Court adjudicating the McCourt divorce grant its approval of the transaction; and the Dodger organization provide all data requested by Major League Baseball to satisfy the so-called investigation ordered by  Commissioner Selig last April – the latter also being the excuse he gave at that time  for delaying his approval of the proposed FOX transaction.

“All the requirements for the Commissioner to approve the FOX transaction were put in place by last Friday: Frank and Jamie McCourt entered into an agreement based on the proposed transaction; the Court ordered, among other things, that the FOX transaction is “in the best interest of the Los Angeles Dodgers and should be consummated immediately;” and all information requested by Major League Baseball under its so-called investigation has been provided by the Dodgers. 

“Commissioner Selig’s letter of rejection is not only a disappointment, but worse, is potentially destructive to the Los Angeles Dodgers, and Major League Baseball.  Accordingly, we plan to explore vigorously our options and remedies with respect to Commissioner Selig’s rejection of the proposed FOX transaction and our commitment to protect the long-term best interests of the Los Angeles Dodgers.” 

There are quite a few other ramifications that go along with today’s ruling by Selig and MLB, and Bleacher Report will break down each one of those ramifications.

Doug Mead is a featured columnist with Bleacher Report. His work has been featured on the Seattle Post-Intelligencer, SF Gate, CBS Sports, the Los Angeles Times and the Houston Chronicle. Follow Doug on Twitter, @Sports_A_Holic.

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