Fox, Los Angeles Dodgers clash in court spat

TOM HALS AND SUE ZEIDLER
Last updated 13:52 08/12/2011

Relevant offers

World

Woman gets $8030 but fails in bid to sue Australian supermarket after slipping on a grape Kayak is letting travellers search for travel deals using emojis Uber CEO Travis Kalanick resigns under investor pressure George Clooney sells his tequila to Diageo for US$1 billion London fire: Luxury apartments acquired for displaced Grenfell tenants Aussie bankers drug colleague with valium and laxatives in attempt to discredit him Passengers set to pay as Uber introduces tipping and fees for keeping drivers waiting Bauer's Australia boss quits, replaced by New Zealand CEO, after Rebel Wilson defamation case Apple gives the iPad some love to halt its long slide Amazon is aiming to be the dressing room in your house

Prospective bidders are piling up for the Los Angeles Dodgers, but Fox Sports argued on Wednesday that the bankrupt team's owner Frank McCourt is improperly breaking its broadcasting contract in his effort to sell the team.

Terms of a November 2 agreement between the Dodgers and Major League Baseball were sketched out in a court filing on Tuesday, effectively starting the auction for the team and stadium.

The agreement to sell the team ended months of bitter feuding between the Dodgers' owner Frank McCourt and baseball's commissioner Bud Selig.

In return for the team's sale, MLB agreed not to oppose the sale of the right to broadcast games beginning in 2014.

The Dodgers are seeking court permission to auction the future media rights earlier than expected to boost the price, a move opposed by Fox Sports.

''These are fundamental breaches and go the heart of the contract,'' said Gregory Werkheiser of Morris, Nichols, Arsht & Tunnell LLP, who represents Fox, at a US bankruptcy court hearing in Delaware on Wednesday.

News Corp's Fox Sports holds the rights through 2013 and exclusive negotiating rights beginning November 2012. The Dodgers argued during a five-hour hearing that bringing that exclusive period forward by 10 months will not harm Fox.

Blackstone Advisory Partners is managing the team sale process and as many as 15 parties have already signed confidentiality agreements as a first step in the bidding process, according to three sources familiar with the process.

Basketball legend Magic Johnson, hedge-fund titan Steven Cohen, media mogul Mark Cuban, California financier Ron Burkle, sports agent and Los Angeles businessman Dennis Gilbert, former Dodgers star Steve Garvey are among several parties who have signed confidentiality agreements, sources have said.

The bankruptcy court will oversee the sales process that will ultimately require MLB's approval.

The potential bidders all declined comment.

One source who is advising potential bidders said the field  will be narrowed once the Dodgers send out detailed offering documents and the interested parties begin trying to firm up financing.

The team anticipates that initial bids will be submitted by January 13.

Terms of the settlement agreement filed on Tuesday stated that McCourt must sell the Dodgers and the stadium by April 30. Fox's Werkheiser said that date may have been chosen because it is the deadline for McCourt to pay his ex-wife US$130 million ($167 million) in a divorce settlement.

The team filed for bankruptcy in June after MLB rejected McCourt's previous agreement to renew the television rights in a deal worth US$3 billion. That agreement was struck with Fox, now the team's bitter adversary, which Judge Kevin Gross called a ''tremendous irony''.

Ad Feedback

The sale price for the team, one of baseball's most storied franchises, is likely to be among the highest in baseball history, although some experts said on Wednesday that the historic baseball franchise may not fetch the estimated US$1 billion pricetag as the sale excluded key assets, like the parking lots.

''If this were the same assets in the same form that McCourt bought from the News Corp then I think we'd be talking US$900 million to US$1 billion,'' Andrew Zimbalist, a sports economist with Smith College in Northampton, Massachusetts.

However, Zimbalist said a number of factors will chip away at that price, estimating Dodgers Stadium will likely need renovations costing hundreds of millions of dollars.

McCourt bought the team in 2004 for US$430 million, primarily financed with debt. Forbes magazine valued the assets at US$800 million in March.

- Reuters

Special offers

Featured Promotions

Sponsored Content