McCourt might still try selling Dodgers' TV rights
Frank McCourt soon could ask the U.S. Bankruptcy Court to let him sell the Dodgers' television rights along with the team, a strategy that could violate his sale agreement with Major League Baseball and revive his dormant litigation with Fox Sports.
"The Dodgers plan to file in the near future with the bankruptcy court an amended media rights procurement motion," according to a club statement late Monday.
The Wall Street Journal reported Monday that the league had agreed that McCourt could "solicit separate bids for the team and the future media rights," citing unidentified people familiar with the sale agreement.
Dodgers spokesperson Robert Siegfried declined to confirm the report.
However, a person involved with the drafting of the agreement told the Los Angeles Times that it called for one auction, with the decision on the Dodgers' television future left to the new owner.
"The agreement is explicit," said the person, who was not authorized to speak because the agreement had yet to be filed in the bankruptcy court.
Blackstone, the investment bank in charge of the Dodgers' sale, already has started soliciting prospective bidders. The sale price is expected to hit $1 billion or more, with the Dodgers and their stadium included in the deal. Under the agreement, McCourt and the new owner would negotiate whether the parking lots should be leased from McCourt or purchased outright.
The agreement targets April 1, 2012, as a sale deadline. Under his divorce settlement, McCourt must pay his ex-wife $131 million by April 30.
Under the Dodgers' current television contract, Fox holds exclusive negotiating rights through Nov. 30, 2012. McCourt previously asked the court to void that provision -- the court has not ruled -- but Fox said it does not intend to yield.
"We fully support a change in ownership of the Dodgers," Fox said in a statement. "In that process, Fox has rights that cannot be violated, as MLB has stated. Those rights were negotiated, paid for, and approved by MLB. We will take all necessary steps to aggressively protect and defend those rights, as our still-pending lawsuit suggests."
McCourt had hoped the court would allow him to auction the Dodgers' television rights to finance the team's exit from bankruptcy and enable him to retain ownership. The league, Fox and the creditors' committee opposed that plan, and McCourt subsequently agreed to sell the team.
In proposing the plan, McCourt and his attorneys 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.
The league's media consultant, former NBA TV president Ed Desser, responded that the Dodgers could command 10%-20% more in television rights "if they wait a year or two" and that Fox's threatened litigaton could dampen any sale.
"A new owner will not want to buy a lawsuit," Desser wrote in a court declaration.
In court papers, Fox said the damages from any such suit could be "massive," hinting at a judgment so high that it could approach the Dodgers' sale price. McCourt's attorneys 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."
-- Bill Shaikin
Dodgers owner Frank McCourt talks to radio reporters during an interview in his office in April at Dodger Stadium. Credit: Robert Gauthier/Los Angeles Times