Baseball: Will the LA Dodgers go down swinging?

A great American sports institution is on the brink of bankruptcy after its owners' fortunes were struck out

It was "half-price food and drink" day at Dodger Stadium in Los Angeles yesterday, offering fans attending the side's mid-day game against the Atlanta Braves the prospect of being able to clog their arteries with $3 (£1.80) "Dodger dogs", $5 plastic cups of lukewarm lager and bargain-priced bags of such all-American snacks as peanuts and Cracker Jacks.

Yet despite the heavily touted promotion, the hill-top ballpark overlooking the city's downtown business district was three-quarters empty as the sides ran out onto the freshly mown diamond and removed their baseball caps for the mandatory singing of "The Star Spangled Banner" and throwing of the ceremonial first pitch.

Forget home runs, strikeouts, stolen bases and all the other daily highlights of spring baseball: the real action at Dodger Stadium yesterday was in the car park, where the satellite vans of dozens of rolling news crews had gathered to follow developments in a news story every bit as fast-breaking as a curveball.

On Wednesday, Bud Selig, the commissioner in charge of Major League Baseball, the sport's governing body, announced that he had decided to make use of rarely invoked powers to seize control of "all business and day-to-day operations" at the Dodgers from unpopular and financially troubled owner Frank McCourt.

Mr McCourt, who is in the middle of a spectacularly messy and expensive divorce, had been forced to take out a $30m loan to pay his players and staff last month. He is also facing an IRS investigation over an apparent failure to pay any tax on $145m he has siphoned from the club during almost seven years at its helm. Despite being one of the nation's most prestigious sports franchises, dating to 1890, the Dodgers are now in an accelerating financial spiral. Mr McCourt has saddled the club with $400m in long-term debt, leaving it unable to afford top players. On field, the team is experiencing precipitous decline, causing season ticket sales to drop by roughly a third.

Falling revenues have already had tragic consequences: cutbacks to the stadium security operation are blamed for a rise in crowd violence, which culminated in the ugly beating of a fan from the rival San Francisco Giants on last month's opening day of the season. He was left in a coma.

Mr Selig decided to swagger into this murky picture after learning that Mr McCourt's payday loan, from Rupert Murdoch's Fox organisation, had been deposited into a personal bank account. That's at best a curious move, particularly given that there are ongoing questions over how much of the Dodgers Mr McCourt actually owns. His estranged wife, Jamie, claims to have a 50 per cent stake. "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 fans, and all of Major League Baseball," Mr Selig said. "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."

To understand how it has come to this, it is necessary to comprehend the market-driven nature of professional baseball, which has historically been designed with just one thing in mind: to maximise the earnings of the few hundred players and owners of 30 Major League clubs.

Teams play 160-odd games a season, taking to the field five or six times on an average week. Games are peppered with breaks every few minutes, so as to allow the broadcasters who screen more than a dozen live games most days to cut to adverts. In stadiums, the endless pauses encourage fans to make frequent use of merchandising and food concessions.

America's game has therefore become a sprawling commercial behemoth that pays top players salaries of up to $50m and generates hundreds of millions of dollars in annual profits for the business moguls who own its biggest franchises. But as with any major industry, the financial failure of a single key player could undermine the profits of everyone. With this in mind, the Dodgers were famously allowed to migrate from Brooklyn, where they were founded, to Southern California, in 1958. Fans in New York were distraught, but the Major League owners were delighted: the move allowed their sport to break into the extremely lucrative and rapidly growing West Coast marketplace.

The club duly became one of America's most glamourous, winning the last of its five major league titles in LA in 1988. There followed 15 years of relative doldrums, at which point it was bought by Mr McCourt, a property tycoon from Boston, and his then wife. They financed the purchase by leveraging the title deeds to a selection of multi-storey car parks.

In what is perhaps cautionary tale about the excesses of free-market capitalism, the McCourts then proceeded to use the club to help finance their extravagant lifestyles. The couple's sons were placed on the payroll. Portions of the team's budget were devoted to buying flowers and paying for restaurant meals, private jets, and chauffeured limousines. A Russian psychic called Vladimir Shpunt was hired by Jamie, on a six-figure salary, to channel "positive energy" to the players.

As the McCourts set about maximising income, introducing a highly unpopular charge of $15 for parking at the stadium and raising the cost of beer, they were able to charge themselves millions in rent for the stadium. The money helped purchase no less than four homes in Los Angeles, worth $80m, including two houses in Holmby Hills, adjacent to the Playboy mansion.

At first, their extravagance escaped attention, thanks to the fact that the team thrived, making the end-of-season playoffs in four of their first six years, between 2004 and 2009. Then came the effects of the financial downturn and the couple's ugly divorce proceedings, which last year saw their personal and financial affairs laid bare in open court.

Ms McCourt's lawyers, who had previously represented Tom Cruise, Clint Eastwood, Jane Fonda and Alec Baldwin, say she is entitled to a 50 per cent share in the club. Mr McCourt's attorneys, who count Mariah Carey, Steven Spielberg, JK Rowling and Roseanne Barr as former clients, reckon otherwise.

With conflict comes uncertainty. And amid continuing questions who will retain long-term control over the team, the Dodgers spent most of 2010 (and the opening stages of the 2011 season) losing players to better-funded teams and falling through the league tables.

Fans, who have long since lost patience with the couple, greeted the league's intervention with a sigh of relief and hope the organisation will now be sold to someone with deeper pockets. The players meanwhile appear to be heartened. On Wednesday night, they brightened up a dismal run of performances by waltzing to a 6-1 victory.

"You feel bad for the situation, but as a player in the locker room, you just have to go about your business," the starting pitcher Jon Garland said.