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What the near future may hold in store for Frank McCourt

Another payroll deadline looms for the Dodgers owner, and Major League Baseball officials don't expect him to meet it. He's a look at the possible complications.

June 23, 2011|By Bill Shaikin
  • Dodgers owner Frank McCourt at the ballpark in Chavez Ravine.
Dodgers owner Frank McCourt at the ballpark in Chavez Ravine. (Luis Sinco / Los Angeles…)

Frank and Jamie McCourt filed for divorce 581 days ago, and the Dodgers' ownership situation has been clouded ever since. The week ahead could be the biggest one yet toward clearing up that picture. Times staff writer Bill Shaikin contemplates the remaining questions and provides some answers:

If we were waiting all these weeks for Commissioner Bud Selig to make a decision about the Dodgers' proposed television contract with Fox, why has nothing happened since Selig turned down the deal on Monday?

Selig expects Frank McCourt to sue, and McCourt's attorney has threatened to do so, but legal positions could be strengthened if McCourt were to fail to meet the Dodgers' payroll and Selig were to respond by seizing the team. Selig could say he had to act because the Dodgers' owner could not pay his employees, and McCourt could say the commissioner harmed him by taking over his team.

When might McCourt fail to meet the Dodgers' payroll?

The next payroll is due Thursday. Major League Baseball officials don't expect him to meet it.

Would Selig kick out McCourt on Thursday?

Probably not long after that. McCourt would likely receive a formal notice of default, demanding he pay up at once. If he does not, Selig would pay the Dodgers' salaries and ask McCourt to sell the team.

If McCourt refuses, Selig could strip the team from him and put it up for sale, although McCourt would have the right to a hearing and the commissioner would need the approval of three-fourths of the owners.

Could McCourt take the Dodgers into bankruptcy court?

He would be hard-pressed to show a bankruptcy court why he should remain in charge without financing in place. He could ask the bankruptcy court to auction the Dodgers' television rights, but he could be challenged by Selig, and perhaps by his ex-wife, Jamie.

How could McCourt stop Selig from selling the team?

First, since the essence of McCourt's lawsuit would be a challenge to Selig's authority, McCourt could say the Dodgers belong to him and not to MLB, in an effort to force the commissioner to get court authorization for a sale.

Second, McCourt could seek an injunction, preventing the Dodgers from being sold until the lawsuit is decided. McCourt would need to persuade the judge he could be irreparably harmed — in this case, the sale of the team now could prevent McCourt from getting the team back if he wins the suit later.

McCourt also would need to persuade the judge that he had a good chance of winning the suit. That hurdle would be the more difficult one, since every incoming owner signs a document granting broad powers to the commissioner and agreeing not to sue him.

Could McCourt seek the injunction before he would miss payroll, so that he could prevent Selig from taking over the team?

Yes, but the hurdles would be the same. McCourt would have to show a good chance of winning at trial and irreparable harm if Selig took over the Dodgers and sold them in the meantime.

If McCourt fails to get the injunction, could the Dodgers get a new owner quickly enough to enter the Albert Pujols sweepstakes this winter?

Probably not. McCourt could appeal the injunction ruling, and in any case his attorney has threatened a separate court fight over whether Dodger Stadium, the surrounding land and all of the team's ticket revenue would be included in a sale.

That issue still might be contested even if Selig can quickly get the primary suit thrown out — on the grounds McCourt waived his right to sue the commissioner.

Who would run the Dodgers in the meantime?

Tom Schieffer, the trustee appointed by Selig, would probably become the Dodgers' chief executive. McCourt and his closest lieutenants might be out, but most club employees would be given the chance to stay. The Dodgers probably would work with a budget comparable to what they had in recent years, meaning the team would neither be signing Pujols nor conducting a fire sale.

What about getting a new owner in time for the Jered Weaver sweepstakes after the 2012 season?

That would be a better bet. If McCourt cannot stop Selig from selling the team, and if Selig cannot stop McCourt from proceeding with the lawsuit, then a new owner probably would take over well before the end of what could be years of legal proceedings.

And then what?

If McCourt wins, Selig and the other owners would be liable for substantial payments in damages, but it is virtually inconceivable that a judge would return the Dodgers to McCourt after a third party had bought the team.

If Selig wins, he would reimburse the owners for the cost of running the Dodgers out of the sale proceeds, meaning McCourt could end up with almost nothing to show for his investment in the Dodgers once debt and taxes are subtracted.

What would Jamie McCourt get?

Half of almost nothing, if the Dodgers are determined to be community property. She had asked a divorce judge to order the immediate sale of the team and could revive that motion, although the judge probably would first need to decide whether the team is community property.

Is Frank McCourt just bluffing, perhaps to get a more favorable settlement with MLB?

We'll see, but his track record suggests he would litigate to the end. If McCourt's objective were to extract the best possible financial settlement from MLB, Selig would listen. If McCourt were to insist that he retain ownership of the Dodgers as part of any settlement, Selig — and baseball's owners —would just say no.

bill.shaikin@latimes.com

twitter.com/BillShaikin

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