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Fox Sports to get its say in Dodgers' settlement, judge says

November 8, 2011 |  9:56 am

Fox Sports will get a "full and fair" say as the U.S. Bankruptcy Court decides whether to approve an agreement under which Dodgers owner Frank McCourt would sell the Dodgers, Judge Kevin Gross said Tuesday.

McCourt and Major League Baseball reached a settlement agreement last week. The Dodgers plan to sell the team's television rights separately from the team, a proposal to which Fox strenuously objects.

In a court hearing Tuesday, Fox attorney Paul Laurin said he was concerned about reports that characterized the settlement as "a foregone conclusion."

Although Gross has reviewed the deal with attorneys representing McCourt and MLB, the judge said Tuesday that the settlement has not been approved.

"I am awaiting the papers myself," Gross said. "Fox will have every opportunity for a full and fair hearing."

The Dodgers' current television contract prevents the team from negotiating with any party besides Fox through Nov. 30, 2012. The settlement agreement targets April 1 as a date for completion of a Dodgers sale.

In court papers, McCourt and his attorneys have argued that a television rights' auction would benefit the Dodgers even if they were sold, for they could fetch a higher price given the certainty of long-term media revenues.

Fox has threatened to sue. Laurin suggested Tuesday that the resulting damages could jeopardize "the assumptions of solvency" in the case, effectively saying that the money Fox could be owed in a lawsuit could be so large as to make it difficult for McCourt and MLB to fulfill promises to repay all creditors in full.

McCourt's attorneys have said the Dodgers could simply honor the two years remaining under the current contract and called it "unlikely that Fox Sports can assert any meaningful damages."

Also Tuesday, Gross denied a request from the U.S. Trustee to disallow $352,742 in fees charged by McCourt's attorneys. Gross ruled that the disputed work -- related to the interim financing obtained by McCourt in the first month of the case -- was "essential."

In the hearing, Dodgers attorney Sid Levinson wondered aloud why the U.S. Trustee had not withdrawn the request, given that the team has settled with MLB and that McCourt -- the party ultimately stuck with the bill -- had not objected. Levinson suggested the high-profile case might have influenced the U.S. Trustee to act.

"This objection may be more about politics than the merits," Levinson said.

That enraged Mark Kenney, the attorney representing the U.S. Trustee. Kenney was particularly disdainful of the theory that he should have dropped his objection to what he believed was improper work done in July simply because the case had settled in November.

"Just because the debtors and baseball are now singing Kumbaya," Kenney said, "that doesn't require the United States to jump in the canoe with them."

-- Bill Shaikin