Dodgers End Bankruptcy Court Fight With News Corp.'s Fox Over Media Rights
By Steven Church – Jan 11, 2012 9:13 AM ET
The bankrupt Los Angeles Dodgers ended their court fight with News Corp. (NWSA)’s Fox Sports over future television rights, removing the last major barrier to a sale of the Major League Baseball team.
Fox Sports agreed to end its opposition to the Dodgers’ bankruptcy reorganization and the team agreed not to solicit bids for future television rights before an exclusive negotiating period with Fox ends later this year.
The deal was designed to “eliminate the cost and distraction of the disputes with Fox and to allow the sale process to move forward unhindered by any uncertainty regarding those disputes,” the Dodgers said in a court filing late yesterday.
Dodgers owner Frank McCourt is selling the team, which filed for bankruptcy in June. To increase the value of the franchise, the Dodgers won permission from the judge overseeing the team’s bankruptcy to solicit separate offers for the rights to televise future games, which Fox currently holds.
That decision was put on hold by a higher court, which found that Fox was likely to win an appeal. A final hearing on whether to overturn the media rights ruling was scheduled for tomorrow.
The two sides are scheduled to be in bankruptcy court today, where Fox had been preparing to argue that the Dodgers should be thrown out of bankruptcy court.
‘Exclusive Media Rights’
“We are pleased that these matters between our two organizations have been resolved,” Fox said in a statement. “We were never in favor of litigation, but it was imperative that we protect our exclusive media rights.”
Under the settlement, whoever buys the team would have the right to negotiate an extension of Fox’s current television deal with the Dodgers, or, failing that, sign a contract with a new company. Under the current contract, Fox has a right to make the first offer for future media rights and to match any subsequent rival bids.
No talks with a rival to Fox are allowed until after November, according to court documents. Fox, through its subsidiary Prime Ticket, can televise games through the 2013 season.
Potential bidders for the team include Los Angeles real estate developer Rick Caruso, who is working with former Dodgers and New York Yankees manager Joe Torre, hedge-fund managerSteve Cohen of SAC Capital Advisors LLC in Stamford, Connecticut; Mark Walter, chief executive officer of Guggenheim Partners LLC in New York City, who has former Los Angeles Lakers player Magic Johnson, a basketball Hall of Famer, among his partners.
The deadline for opening bids for the team is Jan. 23.
The case is In re Los Angeles Dodgers LLC, 11-12010, U.S. Bankruptcy Court, District of Delaware (Wilmington).
– With assistance from Curtis Eichelberger in Wilmington. Editors: Glenn Holdcraft, Anthony Aarons
To contact the reporter on this story: Steven Church in Wilmington, Delaware, at firstname.lastname@example.org