(Updates with judge’s ruling in the sixth paragraph.)
Jan. 11 (Bloomberg) -- The bankrupt Los Angeles Dodgers ended their court fight with News Corp.’s Fox Sports over future television rights, removing the last major barrier to a sale of the Major League Baseball team.
Fox Sports agreed to end its opposition to the Dodgers’ bankruptcy reorganization and the team agreed not to solicit bids for future television rights before an exclusive negotiating period with Fox ends later this year.
The deal was designed to “eliminate the cost and distraction of the disputes with Fox and to allow the sale process to move forward unhindered by any uncertainty regarding those disputes,” the Dodgers said in a court filing late yesterday.
Dodgers owner Frank McCourt is selling the team, which filed for bankruptcy in June. To increase the value of the franchise, the Dodgers won permission from the judge overseeing the team’s bankruptcy to solicit separate offers for the rights to televise future games, which Fox currently holds.
That decision was put on hold by a higher court, which found that Fox was likely to win an appeal. A final hearing on whether to overturn the media rights ruling was scheduled for tomorrow.
U.S. Bankruptcy Judge Kevin Gross approved the settlement today at a hearing in Wilmington, Delaware, that had originally been scheduled to decide whether the bankruptcy should be dismissed, as Fox had demanded.
‘Exclusive Media Rights’
“We are pleased that these matters between our two organizations have been resolved,” Fox said in a statement. “We were never in favor of litigation, but it was imperative that we protect our exclusive media rights.”
Under the settlement, whoever buys the team would have the right to negotiate an extension of Fox’s current television deal with the Dodgers or, failing that, sign a contract with a new company. Under the current contract, Fox has a limited right to match any subsequent bids under certain circumstances.
No talks with a rival to Fox are allowed until after November, according to court documents. Fox, through its Prime Ticket unit, can televise games through the 2013 season.
Potential bidders for the team include Rick Caruso, the Los Angeles real estate developer who is working with former Dodgers and New York Yankees manager Joe Torre; hedge-fund manager Steve Cohen of SAC Capital Advisors LLC in Stamford, Connecticut; Mark Walter, chief executive officer of Guggenheim Partners LLC in New York, who counts Magic Johnson, the former Los Angeles Lakers player and a basketball Hall of Famer, among his partners.
The deadline for opening bids for the team is Jan. 23 and the sale must be finished by April 30.
The case is In re Los Angeles Dodgers LLC, 11-12010, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--With assistance from Curtis Eichelberger in Wilmington. Editors: Glenn Holdcraft, Andrew Dunn
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