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05/26/11 5:27 PM ET
McCourt to MLB: Dodgers will make payroll
By Barry M. Bloom / MLB.com
Dodgers owner Frank McCourt has informed Major League Baseball that he's going to make payroll at the end of the month, an MLB source told MLB.com on Thursday. McCourt needs about $9.8 million to meet the club's May 31 payroll, the Los Angeles Times reported in its Thursday editions, citing a person familiar with the situation who spoke on condition of anonymity. McCourt has procured the funds by accelerating payments due to the club later in the season, the newspaper said. If McCourt does make payroll, it will take the immediate pressure off the Dodgers, who are under the control of MLB as the Commissioner's Office is investigating the club's finances. Commissioner Bud Selig directed MLB to oversee operations of the club on April 20. Since then, Selig has appointed former Rangers executive Tom Schieffer to monitor the Dodgers and approve all financial transactions larger than $5,000. He also has enlisted the international law firm of Proskauer Rose LLP to investigate how McCourt has handled the club's finances. Schieffer has also appointed former Reds executive John Allen as his deputy monitor. The issue of McCourt making payroll came to light last month when reportedly he had to personally borrow $30 million from News Corp.'s Fox Entertainment, which is his regional television partner, to make the payroll on April 15 and April 30. McCourt is awaiting Selig's approval of a new $3 billion TV rights extension deal with FOX so he can resolve his short-term financial problems. The Dodgers have three years remaining on their current regional television contract. Selig said last month at the Owners Meetings in New York that he won't approve the deal or make any other decisions regarding the Dodgers until he reads the report on the club's finances. There's no timetable for him receiving that report. Under MLB's debt service rule, Selig can order the Dodgers to significantly diminish expenses while selling up to 49 percent of the club's equity. Recent financial dilemmas faced by the Padres and Mets have been or are being solved by owners who followed that rule. The Mets, in fact, announced on Thursday that they have opened an exclusive negotiating period with David Einhorn, president of Greenlight Capital Inc., to sell a $200 million non-controlling interest in the club. In the case of the Padres, as majority owner John Moores and his wife, Becky, divorced, Moores significantly diminished player payroll while selling 49 percent of the club to a group headed by Jeff Moorad, who has four more years to buy the team in its entirety. The sale of the Dodgers could come to a head anyway on June 22 in Los Angeles District Court. Jamie McCourt, Frank McCourt's ex-wife and former Dodgers chief executive, has asked the court to force the sale of the team before MLB acts. Jamie McCourt cited her ex-husband's mismanagement as the reason for seeking the ruling. In turn, Frank McCourt has asked the court to determine whether Jamie McCourt must approve the Dodgers signing the extended television contract. L.A. District Court Judge Scott Gordon, who is overseeing the McCourt's divorce, has yet to determine whether the Dodgers are a joint partnership of the McCourts and thus must be split 50-50 under California's community property laws as a result of their divorce.
Barry M. Bloom is national reporter for MLB.com and writes an MLBlog, Boomskie on Baseball. Follow @boomskie on Twitter. This story was not subject to the approval of Major League Baseball or its clubs.