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Why did Major League Baseball take over the Los Angeles Dodgers?

Because the Dodgers are one of the most storied franchises in the history of Major League Baseball, Commissioner Selig's decision has implications far beyond Los Angeles.

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“Certainly, this is one of the top franchises in all of sports. When it has gotten to the point where the commissioner has to step in and take over, it means there are very serious problems that need to be dealt with,” says Carmen Policy, former president of the San Francisco 49ers and Cleveland Browns.

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The Dodgers' financial problems stem from the divorce proceedings between owner Frank McCourt and the now-fired Dodgers executive Jamie McCourt, who has claimed 50 percent ownership in the team.

“Lessons in this [reach] beyond the sports world, on the importance of staying focused on what you are about as an organization,” says Mr. Maloni. “This is more distraction than the team has ever had before.”

Selig said he will appoint an MLB representative in a few days, to oversee all aspects of the "business and day-to-day operations" of the Los Angeles Dodgers.

“The Dodgers’ lenders should feel reassured by the commissioner’s actions,” says Mr. Gover, a partner at White & Case LLP, which represented Rangers Baseball Express LLC in the 2010 Texas Rangers Baseball Partners bankruptcy case. “They may even feel comfortable making an additional loan as long as the trustee stays in charge,” says Gover, referring to the $30 million personal loan taken out by Mr. McCourt to cover April payroll.

“All Selig wants is for the team to be successful and not be an embarrassment to the game. His actions should incentivize other lenders to want to do business with baseball teams.”

Baseball law

The case will test the legal power of the commissioner’s office. Several times in the past, the commissioner's office has ruled against owners, including intervening with Cincinnati Reds owner Marge Schott, who served as president and CEO from 1984 to 1999. Ms. Schott was banned from managing the Reds after making slurs against groups including African-Americans, Jews, and Japanese people. Shortly afterwards, she sold the majority of her share in the team.

At issue are the legal implications of the phrase “the best interests of baseball,” which has given commissioners virtually limitless power. The US Supreme Court has exempted baseball from federal anti-trust laws since 1922, a finding upheld in several cases since.


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