Did Secret Deal Between McCourt and MLB Fuel Spending Spree by New Dodgers Owners?

Bloomberg Businessweek is reporting that former Dodgers owner Frank McCourt entered into a secret agreement with Major League Baseball which reportedly may limit the revenue the team is obliged to share with less prosperous clubs.

According to a Bloomberg News article released earlier today, the settlement that ended McCourt’s 2011 battle in U.S. Bankruptcy Court gives new Dodgers owners a chance to cap income subject to revenue-sharing from a proposed regional sports network at about $84 million a year, this according to several people familiar with the confidential “special terms” of the McCourt-MLB agreement in bankruptcy court. With experts estimating that the team could get as much as $225 million a year from network’s rights fees, the Dodgers may enjoy an annual unshared windfall of as much as $141 million.

Will Dodger fans ever be completely rid of Frank McCourt?
(Photo credit – Stephen Dunn)

Although details are still coming in on the secret deal, you can bet that it will be the hot topic at the Baseball Winter Meetings in Nashville on December 3-6, 2012.

Stay tuned…


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2 Responses to “Did Secret Deal Between McCourt and MLB Fuel Spending Spree by New Dodgers Owners?”

  1. lindav says:

    Maybe I’m dense but I really don’t understand this????

    • Ron Cervenka says:

      Did you read the Bloomberg article Linda? It pretty much lays the whole thing out.

      In a nutshell, the bankruptcy judge ruled in favor of the Dodgers (McCourt) over the MLB regarding future TV rights and essentially made the Dodgers exempt from the TV rights requirements that the other 29 teams in the MLB are governed by.

      It’s definitely a sweet deal for the Dodgers and their new owners, but it’s going to create a lot of friction with the other 29 owners, that’s for sure.

      If the bankruptcy court ruling remains as is for the next 20 years (which I seriously doubt it will), the annual $84M TV rights obligation that the Dodgers must pay to MLB will be a drop in the bucket compared to the (estimated) annual $141M profit that they will make from it, as indicated in the Bloomberg article.

      There is no way that the MLB can (or should) allow this gross disparity (and impropriety) to stand unchallenged and will have no choice but to fight the bankruptcy agreement in court.

      I hope my layperson explanation helps.

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