Teams on verge of insolvency


Source: One club could bounce checks Monday

Devil Rays also facing crisis

Selig: `Now if a club can't make it, I have to let it go'

July 11, 2002|By Phil Rogers | Phil Rogers,CHICAGO TRIBUNE

Twenty-five major-league players soon may realize baseball's claim of financial distress is more than bargaining rhetoric.

According to a highly placed Major League Baseball source, the Tampa Bay Devil Rays are one of two teams experiencing severe cash-flow problems. But it is the other team, which the source did not identify, that is trying to solve an imminent crisis.

That team could bounce paychecks to players on Monday, according to the source. Commissioner Bud Selig declined to discuss the finances of individual teams but confirmed MLB is discussing contingency plans in the event teams become financially insolvent during midseason.

It is possible such a shortfall could have an impact on regular-season games. While MLB has taken over ownership of the Montreal Expos, it is unclear if it would underwrite another team's players' costs to maintain the integrity of the competition.

MLB had established a $75 million line of credit for each team, which since has been lowered to $72 million. But Selig said 20 of the 30 franchises have reached that limit.

Selig confirmed MLB previously has helped unnamed teams - reportedly 1998 expansion partners Arizona and Tampa Bay - meet their payrolls. It might have only delayed the inevitable because those franchises have not resolved their financing issues.

"Would I do it again?" Selig asked yesterday. "I think it was a mistake on my part. Will I do it in the future? I will not. ... Now if a club can't make it, I have to let it go."

As he does somewhat regularly, Selig recently met with about 200 bankers who do business with major-league teams. According to the commissioner, the total debt of franchises is about $3.6 billion.

"People want to question our losses," Selig said. "Well, when I met with the bankers, none of the people who have seen our numbers question it, believe me."

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