Baseball Commissioner Bud Selig has rejected a proposed television deal between the Los Angeles Dodgers and Fox Sports that voids a recent divorce settlement between team owner Frank McCourt and his ex-wife, Jamie McCourt.
Selig said Monday the TV contract would not be in the best interests of baseball and would further divert team assets to McCourt's "personal needs."
"Given the magnitude of the transaction, such a diversion of assets would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans," Selig said in a statement.
Selig's decision fuels more uncertainty about the ownership of one of baseball's most storied franchises. Frank McCourt has struggled to meet team payroll since the start of the season and without money from a TV deal, Selig could seize control of the Dodgers if McCourt doesn't pay his bills.
Up next is a June 30 obligation, where deferred compensation for some former players is due. Among them is Manny Ramirez, who is owed nearly $7 million US as part of a two-year, $45 million contract he signed with the Dodgers.
"I don't think we think about it," Los Angeles first baseman James Loney said. "It's not a part of our daily conversations among each other. I think the distraction is just hearing about something you can't really control and don't have any input in. It's a situation that's happened, and I think for us, we should just go out and play baseball."
Steve Susman, an attorney for Frank McCourt, called Selig's decision "potentially destructive" to baseball and the Dodgers and said he plans to "explore vigorously our options and remedies."
"We are extremely disappointed with the commissioner's rejection of the proposed Fox transaction which would inject $235 million into the Los Angeles Dodgers," Susan said. "As Commissioner Selig well knows, this transaction would make the Dodgers financially secure for the long term and one of the best capitalized teams in Major League Baseball."
Matthew Hiltzik, a spokesman for Jamie McCourt, declined comment.
The McCourts reached an agreement last week that was contingent on Selig's approval of a TV deal with Fox reported to be worth up to $3 billion.
Under the settlement, Frank McCourt would receive $385 million upfront. However, the settlement terms showed about $150 million would be used toward paying attorneys' fees, existing debt and an account that would be monitored by the divorce judge.
The Dodgers' current TV deal with Fox expires in 2013.
Selig said in his statement that he sent a letter to McCourt where "expansive analysis" for his rejection of the TV proposal was explained. Some legal observers have said that Selig's refusal to approve the TV deal would pave the way for a lawsuit by Frank McCourt against MLB.
On Friday, Frank McCourt said he had met criteria set forth by MLB in order for the TV contract to be approved.
The McCourts have been embroiled in a contentious divorce where their lavish spending habits were exposed. Court documents show the former couple took out more than $100 million in loans from Dodger-related businesses.
In April, Major League Baseball took the extraordinary step of assuming control of the troubled franchise. Former Texas Rangers President Tom Schieffer was appointed to monitor the team on behalf of Selig, who said he took the action because he was concerned about the team's finances and how the Dodgers are being run.
The settlement also called for a one-day "characterization" trial Aug. 4 to determine if title to the Dodgers is in Frank McCourt's name or if the team should be considered community property and sold.
Superior Court Judge Scott Gordon ruled in December that a postnuptial marital agreement that gave Frank McCourt sole ownership of the Dodgers was invalid. That cleared the way for Jamie McCourt, who served as the team's CEO and was fired by her ex-husband two years ago, to seek half the team under California's community property law.