AUSTIN — LOS ANGELES — The Los Angeles Dodgers filed for bankruptcy protection in a Delaware court Monday, blaming Major League Baseball for refusing to approve a multibillion-dollar TV deal that owner Frank McCourt was counting on to keep the troubled team afloat.
The Chapter 11 financing permits the Dodgers to use $150 million for daily operations and buys time for the team to seek a media deal and ensure the team's long-term financial stability, the Dodgers said in a news release. A judge would need to approve use of the money and a hearing is set for Tuesday.
"There will be no disruption to the Dodgers day-to-day business, the baseball team, or to the Dodger fans," the statement said.
Baseball Commissioner Bud Selig announced last week that he wouldn't approve a Dodgers television deal with Fox Sports that reportedly was worth up to $3 billion. That left McCourt cash-starved and facing the prospect of missing the team payroll this Thursday, leading to an MLB takeover.
McCourt defended his running of the team, saying he had made it profitable and successful. He also said the Dodgers have tried for almost a year to get Selig to approve the Fox transaction.
"He's turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today," McCourt's statement said.
MLB spokesman Pat Courtney did not immediately respond to an email message. McCourt spokesman Steve Sugerman said Frank McCourt would not be available to comment Monday.
Among the 40 largest unsecured claims listed in the bankruptcy filing are former Dodger slugger Manny Ramirez at nearly $21 million; Andruw Jones at $11 million; pitcher Hiroki Kuroda at $4.4 million; and the Chicago White Sox at $3.5 million.
According to the bankruptcy filing, the Dodgers began experiencing "cash flow difficulties" last year due to declining attendance, paying about $22 million in deferred compensation and revenue sharing.
The team's vice chairman, Jeffrey Ingram, said in court documents that the Dodgers are "on the verge of running out of cash, the result of a perfect storm of events."
"He's clearly running very low on options right now," said David Carter, executive director of USC Sports Business Institute. "What seems to be the case is a high-stakes chess game between Frank McCourt and MLB, and he's running out of pieces. This is one of the uglier weeks in Dodger history."
McCourt had hoped Selig would sign off on the transaction that would have provided him with $385 million up front and was vital to a binding settlement reached between him and his ex-wife and former Dodger CEO Jamie McCourt.
An email message left for Jamie McCourt's spokesman, Matthew Hiltzik was not immediately returned.
The McCourts have been embroiled in a contentious divorce where their lavish spending habits were detailed in court documents. The former couple took out more than $100 million in loans from Dodger-related businesses, records show.
In April, MLB 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 Dodgers' filing follows that of the Texas Rangers, who sought Chapter 11 protection in May of last year. The Rangers' filing successfully pushed through Hall of Fame pitcher Nolan Ryan's $590 million bid to buy the team. Creditors had stalled the deal for months, arguing that the team had rejected higher offers.
McCourt has maintained he met the criteria set forth by baseball officials in order for the TV contract to be approved and would amend the conditions if needed. The Dodgers' current TV deal with Fox expires in 2013.
The divorce settlement, now voided because of Selig's decision, 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. Robert Sacks, an attorney retained by Frank McCourt, said the trial may be shelved and Superior Court Judge Scott Gordon could decide how to handle the former couple's assets at a later date.
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.
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Associated Press writer Greg Risling in Los Angeles contributed to this report.
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