Dodgers Called On Goldman, Time Warner Cable for Loan

When the Los Angeles Dodgers set out to find a bankruptcy loan, the team called on the aces of commercial finance, including Goldman Sachs Group Inc. and Bank of America, and one apparent knuckleballer: Time Warner Cable Inc.

Testifying Wednesday during a hearing in the franchise’s bankruptcy case, Dodgers Assistant Treasurer Jeffery Ingram said as the baseball team scrambled to secure Chapter 11 financing in the days before its June bankruptcy filing, it reached out to the cable-system operator, which is not known to be a commercial lender.

Ingram said the Dodgers approached Time Warner Cable because it’s a “media giant with a big presence in the L.A. area.” He didn’t explain why the team thought the company, which is an advertising sponsor of the Dodgers, would be interested in providing such a loan.

One possibility is that loan could have given the cable company a chance to work with the team to create a regional sports network.

Ingram did say Wednesday that the Dodgers had talks with their current television broadcast partner, News Corp.’s Fox Sports, about creating a regional sports network or extending their broadcast agreement.

The Dodgers’ current contract with Fox barred the team from reaching out to other parties to negotiate a rival deal. (News Corp. also owns Dow Jones & Co., publisher of The Wall Street Journal.)

Ingram said the talks with Time Warner Cable “went nowhere.”

A spokesman for the cable company didn’t immediately return a call seeking comment.

The Dodgers are in court to ask for permission to tap a $150 million bankruptcy loan from Highbridge Capital Management, a hedge fund owned by J.P. Morgan Chase & Co. Major League Baseball is fighting that move and is offering rival financing.

Speaking Wednesday, Ingram explained what other options the team considered. The Dodgers also reached out to some more typical lenders.

Among them were Goldman Sachs, but the Wall Street titan dropped its consideration because it “didn’t want to do anything that would be adverse to Major League Baseball,” Ingram said.

Bank of America, he said, told the team that it wouldn’t offer a loan off its own balance sheet, but it would help facilitate a loan. Among the lenders the bank introduced the Dodgers to was a GE Capital affiliate.

That entity initially priced the loan but then backed away fearing “complications with that Major League Baseball,” Ingram said.

Ultimately, Highbridge was selected “because they were our only option,” he said. One possible lender the Dodgers didn’t call upon, Ingram said, was the league itself. “We didn’t want them to be our lender,” he said.

Ingram went on to describe the tense relationship between MLB Commissioner Bud Selig and Dodgers owner Frank McCourt, saying the league made it difficult for the team to access financing prior to its bankruptcy filing and was at odds with the team over its attempt to sell its future broadcast rights to stabilize its finances.

MLB attorneys said at the hearing that the league is offering a loan that’s in the Dodgers’ and baseball’s “best interest,” and that the league is willing to drop the interest it would collect on the loan to any level the court deems appropriate.

The Dodgers attorney said MLB’s true motivation for the loan is to gain a greater degree of control over the team.