A U.S. Bankruptcy judge today set December 7 to kick off a two-day hearing about whether the Los Angeles Dodgers can begin marketing the team’s lucrative future local TV rights, which Fox Sports holds through the end of the 2013 baseball season. Fox already has sued the Dodgers to block any early rights sale. The network claims its regional network has an exclusive window to renegotiate a new deal as part of its current contract, and that that team is using bankruptcy protection to break that agreement. (As part of that lawsuit, Fox will ask Judge Kevin Gross to dismiss the team’s bankruptcy altogether in a hearing set for December 27.) How valuable are those TV rights? Soon-to-be-ex-Dodgers owner Frank McCourt at one time had a $3 billion deal with Fox in place before it was rejected by Major League Baseball and commissioner Bud Selig, forcing McCourt to seek bankruptcy for the team and eventually agree to sell the franchise outright.
The Los Angeles Dodgers agreed to borrow as much as $150 million from Major League Baseball, almost two weeks after the judge overseeing the team’s bankruptcy ordered the two sides to negotiate a deal. The Dodgers today sought a judge’s approval for terms of the loan, which would finance the team’s operations while it is under court protection in Wilmington, Del., according to a report from Bloomberg. The plan does not address the proposed cable television rights deal Dodgers owner Frank McCourt negotiated with News Corp’s Fox Sports. It was MLB’s refusal to OK that deal which lead to the Dodgers filing for bankruptcy in June. Team lawyers said in court they intend to try to sell those rights while in bankruptcy and will propose rules for marketing them this month. Fox has said in court that it would oppose any effort to sell the rights before its exclusive right to negotiate a deal expires next year.
Sports Report: NFL Thursday TV Package In Play; Dodgers Anger Ally Fox Sports; NBA Lockout Hits The Courts
The NFL is shopping an eight-game Thursday primetime TV package, with commissioner Roger Goodell having informal conversations with networks last week, according to the Sports Business Journal, which is reporting that a stake in the league’s NFL Network might be in play for the winning bidder. The talks are expected to gain momentum now that the league-imposed lockout is over. The NFL Network currently has rights to eight late-season Thursday NFL games; the new package will cover the early season. The SBJ says Turner and Comcast would be front-runners, especially since they have cut previous deals that included league-owned assets (Turner pacted with the NBA in 2007; Comcast has a similar deal with the NHL). Fox and ESPN also are expected to be interested in the package. …
Last week, Dodgers owners Frank and Jamie McCourt agreed to a plan for a divorce settlement that would have given Frank McCourt sole ownership of the franchise — if Major League Baseball approved a lucrative TV deal that McCourt struck with Fox. That multiyear deal worth $3 billion (and, more importantly, $385 million upfront) would help McCourt shore up the Dodgers, who right now are being controlled by the league during all of this divorce mess. Well, baseball commissioner Bud Selig always seemed reluctant to OK the Fox contract, and today Selig made it official by rejecting the deal, saying in part that “the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt.” Ouch. Under terms of the divorce plan, it means the Dodgers are one step closer to being sold off — the assets would be split 50-50 between Frank and Jamie — unless Frank can find some other way to get a massive amount of money together to play his players’ monthly salaries and restore the league’s faith in him as an owner. Here’s Selig’s statement:
Less than a week after a report surfaced that Los Angeles Dodgers owner Frank McCourt arranged for a $30 million personal loan from TV partner Fox to help pay the team’s bills, Major League Baseball owner Bud Selig said today that the league is taking over financial control of the franchise. He said he will appoint a representative to run the day-to-day business. “The Dodgers have been one of the most prestigious franchises in all of sports, and we owe it to their legion of loyal fans to ensure that this club is being operated properly now and will be guided appropriately in the future,” Selig said Wednesday in a statement, adding that he has “deep concerns regarding the finances and operations of the Dodgers.” Frank and Jamie McCourt are in the midst of a messy divorce that has thrown the team’s financial future into doubt. A new long-term TV deal with Fox that the Times’ Bill Shaikin reported could be in the neighborhood of $3 billion over 20 years would go along way to stabilizing things at Chavez Ravine, and McCourt recently took the offer to Selig, who already had rejected a proposed $200 million loan to McCourt from Fox using the future TV contract as collateral.