Creditors go to bat against the rules of a hallowed American sport

WHEN a company defaults on its debts, it typically enters bankruptcy; its assets are sold and the proceeds are divvied up among creditors under court supervision. Not so when one of those assets is a Major League Baseball (MLB) team. Under rules established by the league’s commissioner, who is chosen by the clubs’ owners, any sale of a team must be approved by at least 23 of the game’s 30 franchises. The league says this rule is protected by its 80-year-old exemption from American antitrust law. The Texas Rangers’ declaration of bankruptcy on May 24th will put that claim to the test.

In 1998 Tom Hicks, a leveraged-buy-out specialist, bought the Rangers for $250m from a group of owners that included George W. Bush. He soon authorised a bevy of disastrously expensive contracts for players, including a ten-year, $252m deal for Alex Rodriguez, a star hitter, which was twice as costly as the previous record. To pay its bloated salaries, the club had to ask MLB for a $25m loan in 2009. It also missed a mandatory $40m payment into a fund for deferred player compensation. …