Major League Baseball commissioner Bud Selig is loaning the Los Angeles Dodgers $150 million at more than double the interest rate he charged the Texas Rangers.
When Tom Hicks needed money to operate the Rangers in 2009, MLB loaned sports holding company Hicks Sports Group $15 million. According to sources, Selig charged Hicks an interest rate of less than three percent.
But when Selig loaned Dodgers’ owner Frank McCourt $150 million to operate the franchise, the commissioner reportedly charged an interest rate of seven percent.
Given that the economic landscape and interest rates haven’t changed much over the past two years, there might not appear to be a justification for Selig to charge McCourt more than double what he charged Hicks.
However, Selig could claim the higher interest rate was justified because the loan to McCourt is 10 times the amount he loaned Hicks, and that the Dodgers owner filed bankruptcy.
McCourt claims he was forced to file for bankruptcy protection after Selig rejected a cable television deal that the Dodgers owner had negotiated with Fox, a deal that was valued at nearly $3 billion.
But are we to believe that the Rangers were less of a credit risk than the Dodgers?
Considering the animus Selig has displayed toward McCourt, it’s more likely the higher interest rate was charged as a result of the commissioner’s personal feelings despite claims to the contrary.
