Sports Teams Seeks Bankruptcy Protection

The economic struggles we are facing as a nation continue to wreak havoc, even among the entertainment industry. Two Dallas teams, the Dallas Stars and Texas Rangers, filed bankruptcy protection in the last year. Teams from all over the United States are seeking to protect the team assets and stay in operation to entertain fans. No major league sport is exempt from financial problems and, now, the Los Angeles Dodgers baseball team is feeling the financial pressure.

Saving America’s Favorite Pastime

There is nothing like watching a baseball game with your family and enjoying a good ballpark hotdog. When financial trouble threatens the sports and entertainment industry, there is more at stake to lose than just the company’s assets. In order for a team to keep participating in games, the team must find a way to satisfy their debts to creditors and protect their operations. The benefits of Chapter 11 bankruptcy is that it will allow the business to remain in operation as it works to repay the debts owed to creditors. This provides an ideal opportunity for a struggling sports team to work their way out of debt and hopefully return to profitability.

Of course there are many reasons why a sports team would end up needing bankruptcy protection, but often, it is a combination of factors. Unlike a traditional business where there is a fairly stable market within the industry, a sports team is at the mercy of many fluctuating factors. If the team’s performance slips, ticket and merchandise sales are likely to take a hit. Changes in coaching and player staff can increase payroll costs, leading the business operations at a loss. More debt may be taken on In order to keep the team afloat until the team’s performance improves. Despite the financial challenges a particular sports team faces, the sports and entertainment industry as whole could use a revised business model to make the industry more stable and profitable.