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McCourt faces long odds in regaining control of Dodgers

The courts historically have upheld the baseball commissioner's extraordinary powers to act in the 'best interest of baseball,' legal experts say.

April 22, 2011|By Victoria Kim, Christopher Goffard and Dan Weikel, Los Angeles Times
  • The Dodgers played the Atlanta Braves on Thursday.
The Dodgers played the Atlanta Braves on Thursday. (Kirby Lee / US Presswire )

In Major League Baseball, the commissioner swings the big bat.

The courts have historically upheld the commissioner's extraordinary powers to act in the "best interest of baseball." Because of that, legal experts say Dodgers owner Frank McCourt will face long odds if he challenges the league's move to seize control of the troubled club — a fight McCourt has already indicated that he may wage.

Dodgers Vice Chairman Steve Soboroff gave a spirited defense of McCourt's stewardship of the team Thursday and declared the owner "financially fine," despite what Commissioner Bud Selig called his "deep concerns" about the team's finances and operations.

Soboroff said Selig's decision to take over the team seemed designed to push McCourt out. "There's a predetermined campaign to blow him out of town," he said.

"I think it's irresponsible and it's hurting the city," he said.

One option for McCourt and his attorneys would be to seek an injunction to stop the takeover, arguing that Selig's move was arbitrary and capricious.

McCourt required a $30-million loan from Fox to meet the team's first payroll this season, and on opening day — at a time when the Dodgers had been without a security chief for months — a San Francisco Giants fan was severely beaten.

Financial details that emerged during McCourt's messy divorce from Jamie McCourt, who claims a 50% ownership, would probably serve as ready evidence the owners had other priorities than the team's best interests, experts said. Among the revelations: The McCourts directed more than $100 million from team revenues toward a lavish personal lifestyle.

Fay Vincent, who was baseball commissioner from 1989 to 1992, said Thursday that the courts would probably back Selig's takeover of the Dodgers if there is a lawsuit, but that the courts would be looking over the commissioner's shoulder.

"If you take over a team, you are operating property owned by someone else," Vincent said. "It's like taking over someone's house and making sure the roof doesn't leak. You need to make sure the value doesn't decline."

Powerful as the commissioner's job is, it requires careful political calibrations, Vincent said.

"In effect you are running a business with a board of directors, who are the team owners," he said. "They are the people you might have to discipline and control. Bud in effect works for McCourt. If he intervenes and there is no support from the owners, it could cause political trouble. CEOs of private companies don't discipline their board members."

In building an argument against Selig's takeover, the Dodgers may cite the financially strapped New York Mets and ask why the league has given that team a loan to cover its bills but has not sought control of operations. In public remarks, Selig has insisted that the two cases are different but has not elaborated.

"Anything that Selig does with the Dodgers must be consistent with other, similar situations," Vincent said. "There is a more complicated chess game here than just the Dodgers."

Though the New York Mets, like the Dodgers, face financial turmoil, the league may have more confidence that the Mets owners have the team's best interests in mind, said Clark C. Griffith, a Minnesota-based sports law attorney and son of Calvin Griffith, the former Twins' owner.

Last November, the league loaned the team $25 million to pay mounting bills. The New York franchise is about $450 million in debt, and in 2010 had an operating loss of about $6.2 million before interest, taxes, depreciation and amortization.

"To compare it to the Mets, there's never been a question in Bud Selig's mind that [Mets principal owner] Fred Wilpon is doing everything he possibly can to improve the Mets," Griffith said. "If [Selig] has evidence that the owners are acting for their own personal welfare and are not dedicated to the team and MLB ... the commissioner has an obligation to step in and correct that situation."

Under the agreement McCourt signed with Major League Baseball when he bought the team, it is unclear whether McCourt can sue the league to challenge the commissioner's powers, Griffith said..

"McCourt has signed contracts admitting him to Major League Baseball, whereby he agrees to comply with those powers," Griffith said.

An oft-cited case illustrating a commissioner's powers involved Oakland Athletics owner Charles Finley's lawsuit against Commissioner Bowie Kuhn in the late 1970s. Finley challenged Kuhn's authority to stop his sale of three highly paid players. The U.S. 7th Circuit Court of Appeals ruled for the commissioner on the grounds that he had exercised legitimate "best interests" powers.

The baseball commissioner's authority was "an exception, anomaly and aberration," the judges wrote. "In no other sport or business is there quite the same system."

In the Finley case, the court ruled that the commissioner does not have to establish a violation of the Major League Rules or moral turpitude to act as he sees fit.

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