Sports Law Blog
All things legal relating
to the sports world...
Thursday, November 03, 2011
 
New Column: Why Dodgers Deal is a Victory for Bud Selig

Here's an excerpt of my new column for SI on Frank McCourt agreeing to the sale of team:

* * *

The ability of Selig to take over the Dodgers and effectively kick out its owner will not go unnoticed by the 29 other ownerships groups. The message to them is clear: They better run their businesses profitably or the commissioner can, at his discretion, intervene.

The Dodgers, moreover, are far from the only franchise that has experienced financial difficulties in recent months. New York Mets' owners Fred Wilpon and Saul Katz, defending against a massive lawsuit brought by victims of Bernie Madoff, are likewise having problems. Almost one-third of the league, in fact, exhibits some level of difficultly in maintaining financial soundness: In June, the Los Angeles Times reported that nine franchises -- the Dodgers, Mets, Baltimore Orioles, Chicago Cubs, Detroit Tigers, Florida Marlins, Philadelphia Phillies, Texas Rangers and Washington Nationals -- were in violation of the league's debt services rules. While it can be misleading to take a snapshot of teams' financial situation at any one time, and grouping nine teams together doesn't indicate that some are much worse off than others, a number of ownership groups do not appear to be keeping pace with league requirements. Given Selig's success in taking over the Dodgers, perhaps he will now feel emboldened to threaten other teams that they better get their acts together or they, too, risk league intervention.

MLB players are another interested party in the interplay between team finances and enforcement of league financial rules. Should teams become more fearful of league intervention, it is very plausible that some of those teams will spend less on player salaries and be less active in the free-agent market. More cautious spending by teams could have the effect of curbing salaries; if teams agree with one another to spend less, they open themselves up to charges of collusion. With MLB's collective bargaining agreement set to expire in a little over five weeks (Dec. 11), expect the topic of team finances and their relationship to player payroll to emerge as a key issue in CBA discussions.

* * *
To read the rest of the column, click here.





2 Comments:

Interesting article. The pending Astros sale, if approved, will be in massive violation of MLB's debt rules. Selig might have won, but it seems like McCourt had a point about special treatment and selective enforcement of rules.

Anonymous Anonymous -- 11/03/2011 3:51 AM  


Interesting Article!

Anonymous Stanley Rao -- 11/04/2011 6:00 AM  


Post a Comment