The Los Angeles Dodgers received bankruptcy court permission Thursday to try to sell future TV rights to its baseball games months before their existing contract with Fox Sports allows, Bloomberg reported. The federal bankruptcy judge in Delaware overruled Fox’s objection to the team entering early negotiations with Fox competitors. Fox Sports has broadcasting rights through the 2013 season but was fighting to retain exclusive bidding rights under that contract until Nov. 30, 2012. That contract would have precluded any other bidders prior to that date but the judge’s decision Thursday eliminated that exclusivity. The judge gave Fox 45 days exclusivity to come to a new agreement with the Dodgers. The countdown for that window started November 30. If no deal is reached, Time Warner Cable is eager to jump into the fray. It already won the rights to broadcast Los Angeles Lakers games on a new regional sports network which will replace previous rights holder Fox Sports. Competition for sports programming is driving up prices for rights and allowing early bidding on the Dodgers will likely increase the value of the team in the upcoming sale. The Dodgers filed for bankruptcy in June with the idea that proceeds from the sale of media rights would be used to pay creditors. Current team owner Frank McCourt intended to retain ownership but Major League Baseball agreed to a sale to get rid of McCourt, whose stewardship has been less than optimal. …
L.A. Lakers icon Magic Johnson is the latest big entertainment name to throw his hat in the ring to buy the Los Angeles Dodgers, which are currently in bankruptcy protection and could be about a month away from holding an auction to sell the franchise. The NBA Hall of Famer probably won’t be the latest high-profile star to attach himself to a potential ownership group — Johnson’s team, confirmed today, is a Santa Monica-based group of private investors known as Guggenheim Baseball Management, which includes Mark Walter, CEO of financial services firm Guggenheim Partners, and veteran baseball exec Stan Kasten — as bidders jockey for position in an auction in which the team will likely fetch more than $1 billion. (Johnson and his Magic Johnson Enterprises sold his ownership stake in the Lakers last year and also is part of the group that is trying to bring the NFL to downtown Los Angeles, so he’s definitely a serious player.) Other big names being bandied about as part of separate possible Dodgers ownership groups include Dallas Mavericks and HDNet’s billionaire owner Mark Cuban — he tried to buy the Chicago Cubs from Tribune a year ago — and former CNN host Larry King. Those kind of high-profile figures also don’t hurt in boosting the Dodgers’ profile as networks prepare to take a crack at landing the team’s lucrative local TV rights, which could mean a $3 billion windfall to the financially strapped team — if the courts can ever decide how that process will unfold.
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 sued Fox Sports on Wednesday, accusing the News Corp-owned network of attempting to ”interfere with the sale of the Dodgers and their assets in bankruptcy.” The Dodgers’ goal is to sell the team and its valuable TV rights through separate court-sanctioned auctions to maximize returns. In a sharply worded court response filed Wednesday night Fox said it would ask that the Dodgers be dismissed from bankruptcy, according to the LA Times. Fox slammed Major League Baseball as “Prime Ticket’s former ally” and asserted the only reason Frank McCourt wants to auction the team’s TV rights now is to put “value rightfully belonging to Prime Ticket,in his own pocket” — referring to Fox Sports’ package of programming. The Dodgers’ suit was filed in U.S. Bankruptcy Court in Delaware, where Fox already has a suit pending against the team for alleged breach of contract in the continuing squabble over TV rights. Responding to the latest development, the Dodgers called Fox “obviously desperate” to prevent an auction that would reveal the “enormous value” of those rights and “lead to a record-smashing sale price for the team and benefit not just the Dodgers but all of baseball.”
UPDATE, 2:35 PM: The comment about James came from News Corp president Chase Carey, filling in for Rupert Murdoch, who wasn’t on the quarterly conference call with analysts and reporters. Despite growing concerns about James’ role in the News Of The World hacking scandal, the deputy COO “has done a good job and we are not contemplating any changes,” Carey said. He added, in response to a question, that the company is taking “seriously” the strong opposition that several shareholders expressed at the recent annual meeting to many members of the News Corp board — which includes three members of the Murdoch family. “The board will, and is, discussing those votes,” he says. “The board continues to evolve. …. That being said, we’re proud of the board.”
In other matters, Carey says that “we’re not buying the (Los Angeles) Dodgers,” but didn’t elaborate. Sports costs are not a big concern for the company for now because “outside of Los Angeles, most of our contracts are long term,” he says. He’s also unfazed by the NBA strike, saying that “it’s not a significant financial event for us” although “we’d like to see them settle it.” Carey denied that Fox is offering make-goods ads for lower-than-expected initial ratings for The X Factor: ”We have the No. 1 show and make real money from it,” he says. “It came out a bit below where we targeted … but is building momentum.” Not much detail about the collapse of the auction for Hulu. Carey says that it ”has been a positive for us in terms of creating value” despite its “complicated ownership structure.” Carey also didn’t provide much insight into the new programming deal with DirecTV, although he says it’s “fair for both of us.”
If Frank McCourt’s fight to remain owner of the Los Angeles Dodgers seemed long and arduous, it was — after all, he had to fight his ex-wife Jamie with one hand and baseball commissioner Bud Selig with the other. If the end of that fight seemed to come fast and easy, well, it kinda did. Here’s the release from Major League Baseball that came out tonight announcing a deal to sell one of the most popular and lucrative franchises in sports:
“The Los Angeles Dodgers and Major League Baseball announced that they have agreed today to a court supervised process to sell the team and its attendant media rights in a manner designed to realize maximum value for the Dodgers and their owner, Frank McCourt. The Blackstone Group LP will manage the sale process.”
According to the L.A. Times, the sale would include the team, Dodger Stadium and its parking lots, which McCourt paid $421 million for in 2004. McCourt has put the current value of the team at more than $1 billion; Forbes said it is worth $800 million. Any new owner would certainly attract a lucrative TV rights contract — one worth more than the reported 20-year, $3 billion deal McCourt negotiated with current rightsholder Fox Sports that he said would have given him the cash to keep the team. Selig rejected that …
Frank McCourt’s fight to keep the Los Angeles Dodgers might have cost him another ally. Fox Sports, which owns TV broadcast rights to the Dodgers (as well as exclusive negotiation rights when the current deal expires after next year), has sued the team in U.S. Bankruptcy Court, saying the Dodgers are breaching their contract by shopping future rights. “The telecast rights to the Los Angeles Dodgers baseball games are an inherently unique and irreplaceable asset and business opportunity,” the filing reads. McCourt, who lost financial control of the team to Major League Baseball earlier this year, sees the next media-rights deal as the key to solidifying his and the team’s cash woes, which would allow him to remain owner. Remember, McCourt and Fox had worked out a long-term extension this year that would have given the owner $385 million in upfront payments that he claims was necessary to keep the team afloat, but MLB commissioner Bud Selig vetoed the deal. For Fox Sports, which airs the games on its cable channel Prime Ticket, the lawsuit is an attempt to keep a valuable asset and fend off rivals like Time Warner Cable, which already acquired the Los Angeles Lakers’ TV rights and created a pair of regional sports networks to air games. It’s likely the cabler would want to do the same with the Dodgers. McCourt has said in court filings that DirecTV and Dish Network also might make bids …
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. …
Dodgers Owner Gets OK For Bankruptcy Loan; League Backs Off After Team Agrees Not To Auction TV Rights
The Delaware court that is sorting out the Los Angeles Dodgers’ Chapter 11 filing has authorized the team to enter into a $150 million bankruptcy financing arrangement that will allow owner Frank McCourt to meet the Dodgers’ payroll obligations this week. The deal came together today as Major League Baseball dropped opposition to the financing after getting the Dodgers to agree to not auction off their broadcast TV rights for the next six months and seeing that a $4.5 million fee from the facility’s lender — JPMorgan Chase’s Highbridge Capital Management — be reduced to $250,000.
The TV rights are everything to McCourt now; he says that a deal in place with Fox Sports worth $3 billion over 17 years would put the team back on solid financial ground, but MLB commissioner Bud Selig would not approve the contract, saying too much of the upfront money would go to McCourt, not the franchise. A Dodgers lawyer told Bloomberg today that the team still has the right to propose a TV-rights auction while under court protection, so who knows what the league really gets out of that part of the agreement. One possibility is that Selig and the league will seize the Dodgers within that six-month time frame; baseball clearly believes the Dodgers and their TV rights are worth more on the open market if a new, more palatable owner (we’re talking to you, Mark Cuban) were to step up to …
With no resolution in sight over a lucrative Fox Sports TV deal that would give owner Frank McCourt the cash influx he needs to continue operating the Los Angeles Dodgers, the team filed for Chapter 11 bankruptcy Monday. The move allows the team to use $150 million for daily operations and gives the franchise some time to find a new TV deal; Major League Baseball commissioner Bud Selig rejected the proposed long-term deal with Fox last week, saying “the transaction is structured to facilitate the further diversion of Dodgers assets for the personal needs of Mr. McCourt.” Baseball had already taken control of the team in April. Said McCourt — who faces a costly divorce that could force the sale of the team, skyrocketing payroll obligations, declining attendance and a commissioner that is sick of it all — in a statement Monday:
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:
Los Angeles Dodgers owners Frank and Jamie McCourt were in an LA courtroom today saying they have agreed to a divorce settlement that could potentially take the team out of ownership limbo. But as usual in this case it doesn’t come without a big question mark. According to the LA Times, the deal hinges on Major League Baseball approving Frank McCourt’s multiyear TV deal with Fox that is worth as much as $3 billion, cash that would allow him to meet his team’s payroll obligations and give him the stability to retake financial control of the franchise, which right now is being handled by the league during all of this mess. The Fox deal calls for a $385 million upfront loan to McCourt to handle the Dodgers’ immediate money problems, Bloomberg reports. Here’s the problem, though: the league is hesitant to approve any TV contract in case the Dodgers need to be sold as part of a community property divorce settlement, worried any TV deal signed to now could be undervalued for the new owners. Frank McCourt has said that the league is stalling on purpose to force him out.
The war of words between Major League Baseball and Los Angeles Dodgers owner Frank McCourt escalated today when McCourt said during an interview on CNBC that commissioner Bud Selig was ducking his calls and suggested that the league was purposefully not approving a TV-rights contract that would infuse much-needed cash into the team. McCourt is in New York for meetings with league officials about approving the TV deal with Fox, which the embattled owner said would give him $285 million immediately. “The transaction is complete,” McCourt told CNBC’s Squawk Box. “I’m ready to sign it. Fox is ready to sign it. By the way, this just isn’t something we pulled a rabbit out of our hat in the last week or so. This is a transaction we’ve been working on for six months, and Bud is fully aware of that. It’s a transaction consistent with what’s been approved for other teams.”
The Dodgers are in financial straights, with McCourt pulling out $100 million from the team over the past seven years for personal use, including fighting a messy divorce. That, plus word of an arranged $30 million personal loan from Fox to McCourt to cover the team’s payroll, led the league last week to take over day-to-day financial operations of the club. McCourt has resisted the move, saying today that the Fox deal would solve any problems. “I’ve tried to talk to Bud for several weeks. He’s ducking …
Baseball commissioner Bud Selig has tapped former Texas Rangers president J. Thomas Schieffer as the monitor of the Los Angeles Dodgers, a week after Major League Baseball seized operations of the team from beleaguered and cash-strapped owner Frank McCourt. Schieffer, a former U.S. ambassador, attorney and Texas state rep, will have oversight of the day-to-day operations, business and finances of the Dodgers and all of the franchise’s related entities. Said Selig: “Tom is a distinguished public servant who has represented the nation with excellence and has demonstrated extraordinary leadership throughout his career. The many years that he spent managing the operations of a successful franchise will benefit the Dodgers and Major League Baseball as a whole. I am grateful for Tom’s acceptance of this role.”
A former TV sports executive said today that the trustee who will be appointed by Major League Baseball to handle day-to-day operations of the financially strapped Los Angeles Dodgers would have to consider scrapping a TV rights offer from Fox Sports currently on the table and open the bidding to others. Former CBS Sports president Neal Pilson told Bloomberg that Fox’s current offer, which the Los Angeles Times reported today is a 20-year deal worth about $3 billion, might not be the team’s best option. “The trustee would take a very serious look at that deal and could very well void it,” he said. “He may very well think the team can get more money if they put it up for bid.” If so, that could open the door to Fox Sports rival Time Warner Cable, which recently locked up the Los Angeles Lakers’ TV rights with a 20-year deal that begins with the 2012-13 NBA season and will see the creation of a pair of HD channels to show the team’s games.
Any TV rights deal would be used to reduce the Dodgers’ debt, which Bloomberg Businessweek reported in August was about $525 million. (Forbes has said almost all the team’s profit was being eaten up by interest.) All of this comes two days after baseball commissioner Bud Selig said that the league would take financial control of the team, citing “deep concerns regarding the finances and operations.” On Thursday, …
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.