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Major League Baseball offers a better bankruptcy financing deal

Combination of file photos of MLB commissioner Bud Selig and Los Angeles Dodgers owner Frank McCourt

Major League Baseball commissioner Bud Selig (L) and Los Angeles Dodgers owner Frank McCourt are shown in this combination of file photos April 20, 2011. In an unusual move, Selig announced on Wednesday that Major League Baseball plans to take control of the day-to-day operations of the Dodgers because of mounting concern over the franchise’s financial plight. REUTERS/Files (UNITED STATES - Tags: SPORT BASEBALL BUSINESS)

REUTERS

As mentioned this morning, the first issue the bankruptcy court is going to have to decide is whether or not to allow Frank McCourt to finance Dodgers’ operations with that $150 million loan he obtained.

Also as mentioned, Major League Baseball has come up with an alternative financing arrangement, which Bill Shaikin of the Los Angeles Times just reported: Financing at 7% interest as opposed to the 10% McCourt obtained, plus no $4.5 million fee or any other fees on top of it, like the fees wit which McCourt would saddle the team.

Bankruptcy experts, help us out: are these financing arrangements usually judged purely on the dollars (i.e. what costs the debtor the least), or is there a broader analysis in play, encompassing the source of the financing as well? Because if it’s purely dollars, MLB would have to have it beat, one would assume. If McCourt gets a thumb on the scale in his favor as the current owner, however, it may not matter.

The point to all of this, of course, is that if the court decides that MLB’s financing is going to rule the day, it will likely mean that McCourt’s days of calling the shots are over or soon will be.

Updates as warranted.