Friday, April 22, 2011

Frank McCourt Vs. MLB, Bud Selig, And LA Dodgers' Financial Woes

The issues with Major League Baseball and The Los Angeles Dodgers are heating up and it looks like the only place that the two sides are going to achieve relief is court.

According to TMZ.com, the owner of the Dodgers have said he's ready to go to legal battle against Baseball, who, in the form of MLB Commissioner Bud Selig, has announced that it's set to takeover the Dodgers.

Mccourt and his lawyers will seek a a mandatory injunction against MLB, and from the perspective that the league's actions were "arbitrary and capricious" in working to take over the storied West Coast franchise.

TMZ.com reports the legal action "is not imminent."

Meanwhile, Commissioner Selig is quite clear about his intent, saying that it's his "unwavering commitment" to the maintenance of the game, and because of his "deep concerns" for the state of The Dodgers.

What's The Problem With The Dodgers?

While the franchise has had attendance problems, the real issue is the way Frank McCourt has handled the finances of the team. Frank McCourt has rang up $459 million in debt for the organization.

And from a baseball business perspective, it's going to take a massive cutting of star players and raising of ticket prices, and a winning franchise, to make up for the difference.

The Dodgers problem is further compounded by the fact that to make that happen takes another load of debt to clear that debt, then a pay off of that.

That's the most ideal solution situation.

In 2008, The Dodgers revenue was $241 million, and expenses are reportedly far over that. The first step will be to reduce expenses, perhaps to dramatically low levels, then to produce a totally new team on the field, then either replace the current management or count on the current group to coach the new team to a winning place.

Winning is the only marketing tool the Dodgers have in their favor. Realistically, the organization can't afford to spend a lot of money of marketing, and taking what would have to be a kind of "bootstrap" approach will have to be the strategy for the future.

Stay tuned.

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