Dodgers sue Fox Sports over alleged interference in team’s sale
The Dodgers sued Fox Sports on Wednesday morning, alleging that the television company is trying to “interfere” with the sale of the team in bankruptcy. In a sharply worded court filing Wednesday night, Fox said it would ask that the Dodgers be dismissed from bankruptcy.
In the process, Fox slammed Major League Baseball as “Prime Ticket’s former ally” and claimed the only reason Dodgers owner Frank McCourt wants to sell the team’s TV rights now is to put “value rightfully belonging to Prime Ticket in his own pocket.”
The shifting alliances in the Dodgers’ legal drama have left Fox isolated in U.S. Bankruptcy Court. In June, before the Dodgers filed for bankruptcy, Fox aligned with McCourt on a proposed TV contract. After Commissioner Bud Selig rejected the deal, Fox sided with MLB in opposing the Dodgers.
In order to get McCourt to sell, MLB agreed to remain neutral in the fight between the Dodgers and Fox. On Nov. 1, McCourt and MLB reached an agreement under which he would sell the Dodgers and the league would not oppose an effort by McCourt to market the team’s television rights.
The Dodgers’ current TV contract forbids the team from negotiating with any party other than Fox through Nov. 30, 2012, a provision the team has asked the court to declare unenforceable.
Last week, Fox sent a letter to the investment bank handling the Dodgers’ sale demanding that it “cease and desist” from claiming it could solicit bids for the team’s TV rights regardless of the current Fox contract.
The suit the Dodgers filed Wednesday claims that letter represented “a deliberate attempt by Fox to interfere” with the team sale and charges Fox with “attempts to assert possession of, and exercise control over, property rights of [the Dodgers], including [the Dodgers’] existing and future media rights.”
In its filing, Fox called the Dodgers’ sale agreement a “secret pact,” noted that MLB previously had opposed the TV rights sale, and complained that the agreement has neither been provided to Fox nor filed with the court in the subsequent two weeks. Fox asked that the hearing for approval of a TV rights sale be delayed beyond the scheduled Nov. 30 date.
The sale agreement explicitly leaves the TV rights decision to the new team owner. Accordingly, the Dodgers have proposed proceeding with the marketing process — so that prospective owners would know the value of media rights before bidding on the team — but letting the new owner decide whether to sign whatever TV deal might be negotiated.
“It is ... wholly unclear why a new owner would not just engage in such negotiations itself,” the Fox filing read. “The only apparent explanation is that the entire point of the process is to allow McCourt, now with the agreement of MLB, to obtain the proceeds of such a deal for himself as he brokers the team.”
In a statement, the Dodgers called Fox “obviously desperate” to dodge the TV rights sale. Such a sale, the Dodgers said, would show the “enormous value” of those rights and “lead to a record-smashing sale price for the team and benefit not just the Dodgers but all of baseball.”
Fox said it would soon file a motion to dismiss the Dodgers from bankruptcy, arguing that the sale agreement apparently resolves the differences between McCourt and MLB. For McCourt to sell the media rights along with the team, Fox argued, would represent an “improper and abusive use of the Bankruptcy Court” to “further McCourt’s obvious personal priorities” without benefit to creditors.
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