Bankrupt Sports Franchises: The 1993 Baltimore Orioles to the LA Kings
By
Will Brown
Contributor Updated: 17 January 2025
Will Brown Contributor
William Brown is a Content Writer with strong expertise in US and global gambling industry trends. Having covered the local sports betting market since the repeal of PASPA in 2018, William approaches his gambling guides with passion and diligence. He is a keen player of online slots, blackjack, and a regular sports bettor.
Pittsburgh Penguins Bankruptcy
In this fast-moving world of modern sports, the prospect of your favorite professional sports team folding is almost unthinkable. However, as fans of the former 1993 Baltimore Orioles and LA Kings franchises will tell you, nothing is impossible. There have been several high-profile cases of franchises folding in US sporting history, bringing a stark end to the legacies of once beloved teams. In this guide, we’ve looked at some of the biggest examples of franchise closures due to bankruptcy.
Intro to Bankrupt Sports Franchises
No business, whether sporting or otherwise, is immune from the dangers of bankruptcy. However, sports teams face their own unique financial challenges that, if navigated poorly, can result in their demise. We’ve started this guide by looking at the reasons sports teams go bankrupt.
From there, we’ve looked at the most high-profile cases of franchise bankruptcies in US professional league sports. These include long-beloved and surviving favorites such as the 1993 Baltimore Orioles to the short-lived prospects of the Seattle Pilots and the Los Angeles Kings.
- Why Sports Franchises Go Bankrupt
- The LA Kings
- The Cleveland Barons
- 1993 Baltimore Orioles
- The Pittsburgh Penguins
- The Seattle Pilots
Why Do Sports Franchises Go Bankrupt?
Although major professional sports teams are raking in record amounts of money, mid-tier and lower-tier teams are in constant threat of financial ruin. These teams must compete with the huge resources against the major teams when drafting talent, making them less competitive and, in turn, successful.
Poor performances can drive away fans, which means reductions in membership fees, ticket and merchandising sales, and sponsorship opportunities. The high costs of equipment, travel, insurance, facilities, and advertising also can stack up against struggling franchises. This is why future pro sports teams must prove that they hold significant funds to sustain fledgling teams before being approved.
1995-96 Los Angeles Kings
The Los Angeles Kings are a professional ice hockey team that competes in the National Hockey League. After debuting in 1967, the team had a spotty track record, with strong regular season play diluted by weak performances in the playoffs. Their first Stanley Cup final came in 1993, though they were ultimately beaten by Montreal.
The team experienced financial turmoil after their defeat. Despite having a large fan following, the team faced financial difficulties that put into question the 1995-96 Los Angeles Kings run. There were several reasons the team struggled. Firstly, the Kings failed to sell tickets and acquire corporate sponsorships, hurting their income creation.
The high expense of player compensation was another big contributor to the team’s financial difficulties. The Kings offered a large salary which strained the team’s finances. Aside from player salary, the club faced other significant costs such as stadium rent and team travel.
Up until 1995, the LA Kings were able to stay in business for several years because of the backing of its owner, Bruce McNall. However, when McNall was convicted of fraud in 1995 the squad was forced into bankruptcy. After the scandal of the 1995-96 Los Angeles Kings bankruptcy debacle, the club was bought by Philip Anschutz and Ed Roski.
The owners stabilized the organization and returned it to financial health, which is why you can still back the team when wagering on hockey games online. The LA Kings are now a thriving NHL franchise, earning two Stanley Cup wins in the early 2010s.
The Cleveland Barons
The Cleveland Barons were a professional ice hockey club that competed in the National Hockey League (NHL) from 1976 to 1978. The team was formed after the Oakland Seals relocated to Cleveland, changing its name in the process. Despite having an in-built fan base, the team struggled to remain stable.
The team’s home at Cleveland Arena didn’t help, as the aging facility had a small seating capacity and was poorly located in a rundown neighborhood. This reduced the team’s ability to sell tickets and generate interest from fans. On top of this, the squad failed to attract corporate sponsorships and private funding.
The team’s poor record on the ice amplified its issues, and as the squad struggled, its small audience shrunk to compound its issues. In 1978, the Cleveland Barons joined with the Minnesota North Stars in an attempt to rescue the franchise.
However, the merger failed to keep the team solvent, and the Barons declared bankruptcy later that year. The merger eventually resulted in the formation of the Dallas Stars, which remains a successful NHL club today. In Cleveland, the Cleveland Monsters remain a popular franchise in the minor league American Hockey League
1993 Baltimore Orioles
The Baltimore Orioles are a Major League Baseball franchise that’s origins can be traced back to 1900. Despite its lengthy history and occasional on-field success, the team has faced periods of intense financial strife. This culminated in bankruptcy for the 1993 Baltimore Orioles squad, which left the iconic team’s future in question.
The problem can be traced back to 1988 when the team was purchased by Eli Jacobs for $70 million. Jacobs’ ownership of the team was controversial, and insiders have said the owner was more concerned about using the Orioles to impress celebrities than the team’s success on the field.
In 1993, Jacobs was forced into bankruptcy due to petitions from seven banks. His ensuing sale of the Orioles resulted in a 16-round auction that culminated in an unprecedented sale price of $173 million. After the first year under new owner Peter Angelos, the team reported a $22 million profit.
In 2024, Angelos’ estate sold its controlling stake in the team for $1.75 billion, a low figure for the seventh-most popular MLB team. While the team is said to be operating at a loss at the moment, the best sportsbooks with MLB odds continue to list markets for the team. On the field, the team has been consistent, ending its 2024 season in second place of the AL East Conference.
The Pittsburgh Penguins
The Pittsburgh Penguins are a professional ice hockey team based in Pittsburgh, Pennsylvania that plays in the NHL. While the team’s recent success includes back-to-back Stanley Cup wins in 2016 and 2017, it wasn’t always smooth sailing for the team.
The Penguin’s first brush with bankruptcy came in 1975 after it failed to repay back debts. The team was saved from insolvency and was purchased by a shopping mall magnate. After winning the Stanley Cup in 1991, the team was sold to new owners Howard Baldwin and Morris Belzberg, who began to offer lofty contracts to players.
This soon caught up with them, and at one point, the team owed more than $90 million to creditors. Baldwin and Belzberg initially asked players such as Mario Lemieux to defer their salaries. However, when these were due, the owners were unable to pay. This forced a Pittsburgh Penguins bankruptcy filing.
At this time, Lemieux, who was owed $32.5 million in deferred salary, proposed to convert the owed funds into equity. The NHL agreed, and with investment from a supermarket magnate, the team was saved. Lemieux remained a majority owner of the team until it was sold to Fenway Sports Group in 2021.
The Seattle Pilots Bankruptcy
The Seattle Pilots were a professional baseball team that played one season in Major League Baseball (MLB) in 1969. However, the team faced immediate hardships, failing to attract new fans and draw large audiences. A key reason was the high prices at their home ground at Sick’s Stadium.
Although the stadium was in poor condition, tickets commanded some of the highest prices in the league at the time. The team also struggled to attract local sponsors. The rejection by fans and businesses resulted in severe financial problems, with the owners unable to pay players, coaches, and other staff members.
Compounding this was the team’s poor performance, having one of the worst seasons of any team in the league. With the owners underfinanced, a Seattle Pilot bankruptcy was filed. After this, Bud Selig acquired the team and transferred it to Milwaukee, renaming it the Milwaukee Brewers. It wouldn’t be until 1977 that the Seattle Mariners would debut in the MLB, where they continue to play today.
