All parties in the Dodgers dispute tearfully accuse the others of not putting the "best interests" of the "storied" franchise and baseball first. Sob. But it would take a long-lasting showdown before it could be blamed for the team's performance. History shows that baseball teams need not be happy or have bright owners to perform well over the length of a season or so. The Texas Rangers fought their way to the World Series last year while in bankruptcy.
That said, Dodgers "owner" Frank McCourt, by inviting the intervention of the courts through a bankruptcy filing, has thrown a beanball not just at the head of Commissioner Bud Selig, but at the private legal empire known as Major League Baseball's rulebook.
"I simply cannot allow the Commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer," Mr. McCourt said in the filing for Chapter 11. Guffaw. By some vast, incalculable margin, Mr. McCourt's personal welfare is his most urgent priority. That's his natural right. More interestingly, he seeks to put the team beyond the reach of the baseball laws, which Mr. McCourt volunteered to live under—laws that let the commissioner basically strip an owner of many of the privileges of ownership without much recourse.
As the Los Angeles Times put it: "Even in a city known for conspicuous consumption, the McCourts stood out for their ostentation—much of it on the team's tab."
As David Boies, celebrity divorce lawyer for soon-to-be ex-wife Jamie McCourt, put it: "The rule-or-ruin philosophy that appears to have motivated today's [bankruptcy] filing is bad for everyone who cares about, or has an interest in, the Dodgers."
Nobody seems to like Frank. Yet under any other circumstance, they might be rushing to his defense in the name of the "rule of law." Friends of leviathan, of which there are many, usually don't like it when any area of life escapes the rule-making of public officials, judges and politicians. As one lawyer put it: "Why should Major League Baseball be able to just walk into the corporate offices and take over?"
Those who won't stick up for the unloved Mr. McCourt are usually the first to grumble about baseball's antitrust exemption. The obvious rejoinder might be: Why does baseball even need an antitrust exemption, in a free country, to do what it does? Likewise, an answer to Mr. McCourt's defenders, if he had any, might be: He agreed to be bound by baseball's rules, so what role does the court have except to make sure those rules are administered properly?
Mr. McCourt's whole ballgame is to claim in court that baseball has no right to enforce the rules he agreed to. He piled on more debt than the league allowed. He wants to bail himself out with a TV deal the league's rules allow the league to veto—which it did. He put the team into Chapter 11—which league rules forbid without baseball's OK.
Civil society, which is lauded in the abstract but then attacked whenever somebody doesn't like how civil groups use their freedom, gave rise to baseball's peculiar organization in the first place. Baseball is big business now, but that shouldn't matter—except, in political reality, it does. Baseball, like all of us, must look over its shoulder occasionally.
And Mr. McCourt is not lacking in shrewdness. He uses the court the way many business people do, as negotiating leverage. That leverage is created by one of the unalterable facts of legal life—lawsuits take time, and can be made to take a lot of time by diligent stonewalling.
He also has a sliver of a case: If baseball's rules are so important, why did the league let him buy a team with so much borrowed money in the first place? Why did it stand by while he subdivided its properties so he could milk and mortgage every rosin bag to finance his lifestyle? Not just the Dodgers but nearly a third of the league is in violation of MLB's debt rules.
MLB dearly hopes the bankruptcy court will defer to league rules because league membership is what gives the Dodgers property its value—which a bankruptcy court is duty-bound to protect for the benefit of Dodgers creditors, who include nonplayers like Manny Ramirez ($21 million) and Andruw Jones ($11 million). Mr. McCourt says he wants to remain the owner of the Dodgers—a result likely not in the cards. But Mr. McCourt may yet profit handsomely from a league-orchestrated sale of the team—a vanity item that could fetch $1 billion.
MLB does not want a drawn-out fight. It certainly doesn't want to give the courts an opening to rewrite its governance rules. Therefore look for a settlement that involves a payoff to Mr. McCourt.
