Frank McCourt loses control of Dodgers; was financing payroll from personal loans

frank-mccourt.jpgOne of baseball's oldest and most famed franchises is in dire straits, thanks to their owner Frank McCourt's mismanagement of the club.

MLB seized control of the ballclub Wednesday (April 20), with MLB commissioner Bud Selig announcing that he will appoint a trustee to "oversee all business and day-to-day operations" of the club.

The final straw that prompted these measures was McCourt recently taking out a $30-million personal loan to meet payroll. What this means for the team is that now MLB will have control over all team spending. The franchise will most likely be sold.

"I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the club, its great fans and all of Major League Baseball. My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt's ownership," says Selig in a statement.

McCourt issued his own statement, "Major League Baseball sets strict financial guidelines which all 30 teams must follow. The Dodgers are in compliance with these guidelines. On this basis, it is hard to understand the Commissioner's action."

McCourt has long been under suspicion of mismanagement. His initial purchase of the Dodgers was a highly-leveraged deal. Subsequently, court documents in his divorce proceedings revealed the Dodgers had been charging themselves rent and that money was partially going to the McCourts' personal expenses.

The team has accumulated more than $400 million in debt. McCourt has proposed a 20-year television deal between Fox and the Dodgers, which would help settle his divorce proceedings and the debt of the team.

Fox rep Chris Bellitti says in a statement, "A long-term solution to the Dodgers' current challenges is in the best interest of all parties, and we will work with both Major League Baseball and the Dodgers to be a part of that solution. The goal is to have a viable, financially stable and ultra-competitive Dodgers team in Los Angeles."

Selig has yet to rule on the proposal.