PITTSBURGH -- The Phillies confirmed they are one of nine teams not compliant under Major League Baseball's debt service rule.
A report in the Los Angeles Times identified the Phillies along the Los Angeles Dodgers, New York Mets, Baltimore Orioles, Chicago Cubs, Detroit Tigers, Florida Marlins, Texas Rangers and Washington Nationals as the teams out of compliance.
The rules were put in place following the 2002 collective bargaining agreement and are in place to ensure team's financial resources are stable. The general limit to a team's debt is 10 times its annual earnings, but the Times reported Comissioner Bud Selig has "wide latitude to enforce those rules."
A 2011 Forbes Magazine evaluation of the Phillies detailed their revenue (net of stadium revenues used for debt payments) as $239 million.
"In recent years, the Phillies have been compliant under the debt-service rule," Phillies president David Montgomery said in a statement. "Our last submission for 2011 indicated that we are currently not compliant. As a result, we met with the Commissioner's office and are working on ways to remedy our current situation."
The Dodgers and Mets have notable cases of financial troubles, but this report shows there are even more problems.
"To take a snapshot of the number of non-compliant clubs at a point in time can be very misleading," Rob Manfred, baseball's executive vice president of labor relations, told the Times. "With one or two exceptions, we see how teams are going to be compliant again in the short term, so we're not worried about them."
More to come.
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