[h3]By
MATTHEW FUTTERMAN [/h3]
The Los Angeles Dodgers may not have enough cash to cover their expenses at the end of this month when a round to paychecks to players are due, according to two people familiar with the team's financial problems. The team also certainly will face insolvency by July, they said.
Reuters
Former Texas Rangers president Tom Schieffer speaks at a news conference last month. Schieffer was brought in to run the Los Angeles Dodgers less than a week after Major League Baseball said it was taking control of the franchise.
As a result of the cash crunch, Dodgers owner Frank McCourt has offered full cooperation with monitor Tom Schieffer, the former ambassador appointed last month by Major League Baseball commissioner Bud Selig to oversee the franchise.
A lawyer for McCourt earlier this week sent a letter to Bradley Ruskin of Proskauer Rose, which is representing Major League Baseball in the matter, to make it clear that that Schieffer would have immediate access to all the financial material he needs for the ongoing investigation of the franchise's viability.
In the letter, which was described to The Wall Street Journal, McCourt attorney Robert Sacks pledges to make all financial documents available and to set up a password-protected computerized database for Schieffer and representatives of Major League Baseball to review.
For McCourt, the speed of the investigation is crucial because Selig has said he will not approve a new broadcast rights deal McCourt reached with News Corp.'s Fox unit until the financial investigation is complete. The 17-year, $3 billion deal includes a $285 million up-front payment that McCourt needs to cover the team's cash needs. News Corp. also owns The Wall Street Journal.
In an interview Tuesday, Schieffer said that despite McCourt's cooperation, it wasn't clear yet how long the investigation will take.
"It's a complicated web of companies, and we have to follow one dollar in the door and out the door," he said. "We have to figure out what's going on the best we can and get to facts everybody agrees on. Then the options will define themselves."
He declined to comment on the immediacy of the Dodgers' cash issues. However, he said baseball has not seized the team and that McCourt, as the owner, remains responsible for meeting the team's financial needs.
McCourt has said he will continue to invest money in the team if he is in control of the business. As of now, Schieffer must approve all expenditures over $5,000.
It's unclear just what will happen if the end of the month arrives, Schieffer's investigation is ongoing, and the team does not have enough money to meet its expenses.
At the conclusion of the letter to Ruskin the baseball lawyer, McCourt attorney Robert Sacks of Sullivan & Cromwell said his client would reserve his rights to seek damages if the value of the franchise is harmed by Major League Baseball's actions.
