Nine Teams In Violation Of Debt Service Rules

The Dodgers and Mets are among the nine MLB teams in violation of MLB’s debt service rules, according to Bill Shaikin of the LA Times. The regulations came into being in 2002 and are intended to limit a team’s debt to ten times its yearly earnings and ensure that each team can pay its bills. The Orioles, Cubs, Tigers, Marlins, Phillies, Rangers and Nationals are also in violation of the rules, according to Shaikin.

MLB executive VP of labor relations Rob Manfred says he isn’t “concerned about the overall economic condition of the industry" and a National League executive called the high number of teams out of compliance a “hiccup” for an otherwise healthy league.

Along with the competitive balance tax and revenue sharing, the debt service rule figures to be a major financial issue in the negotiations for a new Collective Bargaining Agreement between the players and the owners. The Phillies have confirmed that they are not currently compliant with the debt-service rule, according to Matt Gelb of the Philadelphia Inquirer.

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