CBS, MSG eye Dodgers TV rights
CBS and MSG have each considered whether to invest in a Dodgers ownership group to secure the team’s television rights, two people familiar with the Dodgers sale process said Thursday.
The objective for both parties would be to launch a regional sports network centered on the Dodgers, the people said. It is uncertain whether CBS or MSG has committed to provide financing to one or more bidding groups.
CBS spokesman Mike Nelson and MSG spokesman Barry Watkins each declined comment.
Fox Sports currently airs the Dodgers on Prime Ticket and would like to retain them. Time Warner Cable also is interested in securing the Dodgers’ television rights.
Blackstone Advisory Partners, the investment bank brokering the sale of the Dodgers for outgoing owner Frank McCourt, has encouraged prospective owners partner with media companies and private equity funds interested in launching a regional sports network. That, Blackstone believes, could enable prospective owners to raise their bids by perhaps a half-billion dollars.
It is uncertain how Major League Baseball would evaluate a bid significantly dependent on financing from television companies and equity funds. MLB generally prefers that television revenue be invested in the operations of the team rather than be used to buy a team. However, if McCourt believes MLB has unreasonably rejected a bidder, he can appeal to a mediator appointed by the U.S. Bankruptcy Court.
The court-approved sale agreement gives MLB the right to approve up to 10 bidders and McCourt the right to pick the winner. On Monday, the Dodgers and Blackstone said in a statement that they had “notified the parties that have been selected to advance to the next round.”
Those seven parties did not include Memphis Grizzlies owner Michael Heisley or Los Angeles-based investor Tony Ressler. The parties also did not include former Dodgers owner Peter O’Malley or Los Angeles developer Rick Caruso, each of whom had withdrawn from the process before Monday’s second cut.
However, Blackstone has not ruled out adding any of those parties to the list of bidders submitted for MLB evaluation, according to three people familiar with the sale process. Blackstone also has encouraged investors from ousted parties -- including E-Land, the South Korean conglomerate that had backed O’Malley -- to join other bid groups.
It is uncertain how much flexibility Blackstone and MLB might exhibit in considering additional parties. The league is running prospective buyers through an multilayered approval process over the next two to three weeks.
Under the sale agreement, McCourt must identify the winning bidder by April 1 and close the sale by April 30, the date by which he must pay his ex-wife $131 million in a divorce settlement.
Although Fox Sports and Time Warner Cable already operate regional sports networks in the Los Angeles market, it would not be surprising for other operators to be interested in the Dodgers’ television rights, said New York-based industry consultant Chris Bevilacqua.
“This is the golden age of RSNs,” Bevilacqua said. “There has never been a better time to be a local sports rights holder. If the Dodgers are going to start something on their own, they’re going to need partners.”
MSG operates two regional sports networks in New York, carrying the company-owned Knicks and Rangers on one network and the independently owned Devils and Islanders on the other.
CBS owns two television channels -- KCBS and KCAL -- and six radio stations in the Los Angeles market. The company recently has invested heavily in its cbssports.com website.
CBS formerly owned the New York Yankees. In 1973, CBS sold the Yankees to a group led by the late George Steinbrenner, for a reported $10 million. Forbes last year estimated the Yankees’ value at $1.7 billion.
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