Bloomberg News

Fox Seeks Delay of Hearing on Dodgers TV Contract Bidding

November 17, 2011

(Updates with excerpt from filing in fourth paragraph.)

Nov. 17 (Bloomberg) -- News Corp.’s Fox Sports asked a judge to postpone a hearing on a proposal by the bankrupt Los Angeles Dodgers to solicit bids on television rights to the baseball team’s future games.

Fox Sports Net West 2 LLC, which televises Dodger games through its Prime Ticket unit, is trying to prevent the team from talking to potential competitors. Fox’s current contract gives it the exclusive right to negotiate an extension of its TV rights until after November 2012.

Dodgers owner Frank McCourt ended his battle for control of the team’s future with Major League Baseball by agreeing to sell the club. Under the agreement, which is not public and has not been submitted to the court for approval, MLB agreed that the future TV rights can be marketed separately from the team. Terms of the agreement are described in court filings and a joint statement from the Dodgers and MLB.

“The court should not allow these continued abusive tactics undertaken in an effort to destroy Prime Ticket’s vested contract rights,” Fox said in a filing yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

Fox wants U.S. Bankruptcy Judge Kevin Gross to put off deciding on the TV rights proposal, currently scheduled for a Nov. 30 hearing. Instead, Gross should hold a status conference to consider on how to proceed, Fox said.

Rejected Proposal

McCourt tried selling the television rights to future Dodgers’ games to Fox before he put the team into bankruptcy. The team filed for court protection from its creditors in June, after Baseball Commissioner Bud Selig rejected a proposed extension of Fox’s TV contract.

After filing, the team said it would seek court authority to sell TV rights before the exclusive negotiating period with Fox ended. That set off months of court battles pitting McCourt against Fox and MLB over his plan to sell rights and use the money to pay creditors, retain his ownership and exit bankruptcy.

MLB switched sides after McCourt agreed to sell the team. Fox said it plans to seek dismissal of the Dodgers’ bankruptcy case. The Dodgers’ effort to collect offers for a new TV contract is taking away Fox’s ability to defend its legal rights in court, the company claimed in its filing.

The Dodgers sued Fox yesterday as part of the bankruptcy case, claiming the network is interfering with its plans to sell the team and solicit offers for the TV rights.

Increased Value

Marketing the future TV rights would increase the value of the team before final bids come in for the entire club, the Dodgers said in court papers. Bidders for the team would get reliable financial data about how much money the team would make in the future from a new TV contract, which would encourage them to offer more, the Dodgers claim.

No sale of the TV rights could be completed without approval from MLB, the new owner of the Dodgers and the court, according to court documents.

Fox said the marketing process is designed by McCourt “to put value rightfully belonging to Prime Ticket in his own pocket.”

The bankruptcy case is In re Los Angeles Dodgers LLC, 11- 12010. The lawsuit is Los Angeles Dodgers LLC V Fox Sports Net West 2 LLC, 11-53829. Both are in U.S. Bankruptcy Court, District of Delaware (Wilmington).

--With assistance from Phil Milford in Wilmington, Delaware. Editors: Stephen Farr, Andrew Dunn

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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