Dodgers seek court’s OK to sell team’s TV rights
In an effort to get owner Frank McCourt the highest possible sale price for the Dodgers, team attorneys asked the U.S. Bankruptcy Court on Saturday to let him sell the team’s television rights as well.
Fox Sports, which holds those rights, renewed its request that the court enforce a contract provision that forbids the Dodgers from soliciting other offers for another year.
An extended legal battle over the issue could jeopardize the timetable established by the settlement between McCourt and Major League Baseball, which calls for a new owner to be selected by April 1 and for the deal to be closed by April 30. Under his divorce settlement, McCourt must pay ex-wife Jamie McCourt $131 million by April 30.
It is possible that McCourt could sell the Dodgers and Dodger Stadium in one deal, the parking lots surrounding the stadium in a second deal and the television rights in a third deal.
“I don’t even know what’s for sale here,” said an investment banker who said he had four clients interested in bidding on the Dodgers.
The sale includes transfer of a lease for the Dodger Stadium parking lots, with annual payments of about $10 million due to Blue Land Co., a McCourt entity not part of the bankruptcy filings, according to a person familiar with the agreement but not authorized to discuss it. The sale agreement does not require McCourt to sell the parking lots, but the new Dodgers owner could offer to buy them.
When McCourt agreed to sell the team, the league agreed not to challenge a renewed bid to sell the television rights. However, the settlement also stipulates that the decision on a new television contract would be left to the “sole and exclusive discretion” of the new owner.
Accordingly, under the terms of Saturday’s proposal, the winning bidder for the Dodgers would not have to sign whatever television deal McCourt might negotiate now. That would allow the winning bidder to consider starting a team-owned cable channel in 2014, or to try to use that leverage in getting higher bids once the Fox rights expire in 2013.
The league, the Dodgers’ creditors and Fox all objected to McCourt’s previous plan to sell the team’s television rights, which would have financed his continued ownership of the Dodgers.
Fox has sued to uphold its exclusive negotiating rights. The company issued a statement Saturday vowing to “take all necessary steps to aggressively protect and defend those rights.” It is unclear whether the creditors would join Fox in objecting to Saturday’s proposal.
A hearing on the issue is set for Nov. 30.
In Saturday’s filing, the Dodgers’ attorneys said that the television rights constitute “a large share of the team’s overall value” and that shopping those rights now would provide prospective buyers with “real-world information about what the value of the telecast rights would be.”
The certainty of that information, the Dodgers believe, would lead to higher bids for the team.
In June, baseball Commissioner Bud Selig rejected a proposed contract between the Dodgers and Fox that McCourt valued at $3 billion. That would probably be the starting point for any competitive bidding between Fox and Time Warner Cable, which could use the Dodgers to fill summer airtime on its new Lakers channel.
If Time Warner could bid now, Fox would either have to pay up or risk losing the Dodgers, and perhaps losing its Prime Ticket channel as well.
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