Report: Dodgers to face insolvency
The Los Angeles Dodgers may not have enough cash to cover their expenses at the end of this month when a round of paychecks to players are due and will certainly face insolvency by July, The Wall Street Journal reported Tuesday citing sources.
As a result of the cash crunch, Dodgers owner Frank McCourt has offered full cooperation with monitor Tom Schieffer, the former ambassador appointed last month by Major League Baseball commissioner Bud Selig to oversee the franchise.
A lawyer for McCourt earlier this week sent a letter to Bradley Ruskin of Proskauer Rose, which is representing the league in the matter, to make it clear that Schieffer would have immediate access to all the financial material he needs for the ongoing investigation of the franchise’s viability.
In the letter, McCourt attorney Robert Sacks pledges to make all financial documents available and to set up a password-protected computerized database for Schieffer and representatives of the league to review.
For McCourt, the speed of the investigation is crucial because Selig has said he will not approve a new broadcast rights deal McCourt reached with News Corp.’s Fox unit until the financial investigation is complete. The 17-year, $3 billion deal includes a $285 million upfront payment that McCourt needs to cover the team’s cash needs. News Corp. also owns The Wall Street Journal and NewsCore.
In an interview Tuesday, Schieffer said that despite McCourt’s cooperation, it was not clear yet how long the investigation will take.
"It’s a complicated web of companies, and we have to follow one dollar in the door and out the door," he said. "We have to figure out what’s going on the best we can and get to facts everybody agrees on. Then the options will define themselves."
It is unclear just what will happen if the end of the month arrives, Schieffer’s investigation is ongoing, and the team does not have enough money to meet its expenses.