Dodgers bankruptcy: Creditors ask judge to deny TV rights sale
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From the day he took the Dodgers into bankruptcy, owner Frank McCourt has said that selling the team’s television rights would enable him to put the Dodgers on solid financial ground, including full payment for all creditors.
On Monday, the creditors disagreed. The official creditors’ committee asked U.S. Bankruptcy Judge Kevin Gross to deny the Dodgers their proposed television rights auction, arguing that the prospect of a lawsuit from Fox Sports and opposition from Major League Baseball could jeopardize the money available to repay creditors.
‘The committee cannot gamble the 100% recoveries of its constituents on such a risky proposition,’ lawyers for the committee wrote in a court filing.
Instead, the committee said, ‘A prompt sale of the team is the most prudent course of action.’
The filing aligns the creditors with Fox and MLB -- and against McCourt -- in advance of a critical hearing that starts Oct. 31. Gross is scheduled to hear arguments on the Dodgers’ bid to sell their television rights and on the league’s request that the team be ordered sold. The committee asked Gross to wait 30 days before ruling on the MLB request to afford McCourt and MLB the opportunity to develop a ‘consensual exit strategy’ that would satisfy creditors and ‘provide for the smooth transition of ownership.’
The committee did not rule out the possibility that McCourt might be able to satisfy the financial needs of the creditors and of the Dodgers through the sale of ‘a substantial interest in the team.’ However, the committee said the court should deny the television rights sale because the hurdles set by Fox and MLB might leave the Dodgers unable to close any such sale.
In that case, the filing read, ‘they will have wasted valuable time and money and may run out of liquidity entirely while they scramble to devise an alternative exit strategy. That is in no party’s best interest.’
-- Bill Shaikin