Major League Baseball would loan the Dodgers the money the team needs to get through the season at a seven-percent interest rate, according to terms of a loan agreement submitted Friday in bankruptcy court.
Major League Baseball and the Dodgers submitted the $150-million loan agreement, which was reached after the two squared off last month in a Delaware bankruptcy court. MLB challenged the Dodgers' proposed financing arrangement last month with a plan of its own, and a judge's decision to reject the Dodgers' proposal compelled the team to negotiate with the league for the loan.
Document: Judge Rejects Dodgers' Proposal
The LA Times reported terms of the MLB-Dodgers arrangement. The league would not seize the Dodgers in the event of a default, but it could withhold funding and/or demand repayment, according to the Times.
The Dodgers submitted their original financing proposed when the organization filed for bankruptcy in June. That came after MLB Commissioner Bud Selig announced the league would take financial control of the team.
The court will now consider the MLB-Dodgers loan agreement. Whether team owner Frank McCourt can negotiate the team's cable TV rights plays a major role in the bankruptcy case.
A proposed TV rights deal with Fox was supposed to provide $385 million for the financially strapped club. That would allow McCourt to pay other expenses, including money he owes his ex-wife, Jamie
Selig has expressed his belief that the TV deal would lead to another financial disaster for the team.
Friday's agreement was submitted one day after attorneys for Frank and Jamie McCourt met in court to discuss the next steps in the couple's divorce case.
Jamie and Frank McCourt did not attend the case management conference. Attorneys said after the meeting that it might be a long time before anything is settled.