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SBD/July 19, 2011/FranchisesPrint All
After a frenetic day yesterday of legal jockeying that saw Dodgers Owner Frank McCourt likening MLB Commissioner Bud Selig to "the devil," the club last night said MLB's deposition and document production on its proposed interim financing were "insufficient" and "not conducted in compliance" with prior discovery rulings in the ongoing bankruptcy case. In the club's latest filing in U.S. Bankruptcy Court for the District of Delaware, the Dodgers said testimony from MLB Exec VP/Administration & CIO John McHale Jr. was such that the club has not been able to fully vet the league's bid to fund the team during bankruptcy. As a result, the club has asked the court to preclude MLB from presenting evidence in support of its interim financing bid. "The failure of MLB to provide an adequate representative to testify to these issues … has resulted in significant prejudice to the [Dodgers] as they prepare for the contested hearing." The court tomorrow will hold a hearing in Wilmington to rule on rival interim financing bids from MLB and the Dodgers in consort with HighBridge Capital Management (Eric Fisher, SportsBusiness Journal). McCourt’s attorneys in the filings said that “the fine print of the proposed MLB financing includes terms tilted toward triggering defaults that would enable the league to take over the Dodgers.” The attorneys called MLB’s proposed loan “nothing but a pretext … for the commissioner’s ulterior motive of seizing control of the (Dodgers) and ousting Mr. McCourt.” One source said that the league “is willing to consider relaxing some of those terms.” Dodgers attorney Bruce Bennett said that Selig “should not be allowed to provide the interim financing because he is not a disinterested lender -- and, in fact, is only in the lending business now for the purpose of shoving out McCourt.” But MLB Exec VP/Labor Relations & HR Rob Manfred said that the Dodgers “have made no effort to work with the league to provide a better loan to the team.” Manfred: “We’re disappointed the Dodgers have not made an offer to get an agreement on financing that is clearly better” (L.A. TIMES, 7/19).
HEATING UP: Several motions and objections were filed yesterday in the ongoing Dodgers bankruptcy case, serving as a run-up to tomorrow's hearing in Wilmington. Most notably, McCourt angrily responded to MLB's objection last week of the Highbridge bid, saying that Selig is "hostile to both the interests of [me] and the Dodgers," and as a result is an unfit bidder. Selig has "an eye jaundiced by irrational animosity toward Mr. McCourt," the filing reads in part. McCourt in the filing continued, "It is well within a debtor's business judgment to decline such a 'deal with the devil.'" McCourt also challenged MLB's previously redacted claim that he had taken $180M out of the team for personal distributions, saying the number is less than "$30 million during the seven-plus year tenure as owner." In doing so, he said "most of the payments about which the Commissioner complains relate to the real property assets -- and not to the Dodgers and the club assets." And the filing called MLB's prior assertion that McCourt has a "substantial personal stake" in the Highbridge bid being approved "patently false.” The Dodgers, according to the filing, intend to exit bankruptcy by the end of ‘11, and want to use a scheduled Aug. 16 hearing in Wilmington to set new guidelines for the sale of the club's cable TV rights. Meanwhile, the committee representing unsecured creditors in the case yesterday filed a limited objection to McCourt's proposed interim financing plan. The panel, just formed last week and including the MLBPA and family of critically injured MLB Giants fan Bryan Stow, among others, said the rival interim financing bid from MLB is "economically superior." But it added "the committee understands [the Dodgers'] concerns with the proposed [MLB financing] given the tense relationship with the parties.” The panel requested several modifications be made to the Dodgers' interim financing bid from Highbridge, including the removal of $10M in fees it called "excessive" and the removal of team assets as collateral to secure the loan. MLB yesterday also filed a supplemental objection to McCourt's interim financing bid from Highbridge (Fisher).
WAITING IN THE WINGS: The HOLLYWOOD REPORTER’s Andy Lewis reports Fox Sports “stands to be the big collateral loser in the bitter divorce between Frank and Jamie McCourt, which morphed into a battle" between Frank and MLB over ownership of the Dodgers. Fox in April signed a “sweetheart deal for Dodgers TV rights until 2027," which Selig has since rejected. If the bankruptcy court judge forces the Dodgers to auction, the move “could be a windfall for the Dodgers but a big blow to Fox Sports’ lucrative dominance of the L.A. cable sports market.” Fox rivals “are hovering -- Time Warner in particular, having lured the Lakers from Fox by offering them joint ownership of two channels in a deal starting in 2012.” A competitive auction “is bad for Fox Sports." At best, Fox Sports "would be forced to pay higher rights fees to keep the Dodgers.” At worst, the network “could lose the rights.” That result would leave “a gaping hole in Prime Ticket’s summer lineup at the same time a formidable new challenger has been created, dramatically reducing the value of the company’s most valuable RSN” (HOLLYWOOD REPORTER, 7/22 issue).
The Pirates last night “took a winning record into their first home stand since the All-Star break, threatening to end the streak of 18 consecutive losing seasons,” and fans “are responding by packing games at PNC Park as the Bucs take on division rivals and vie for first place,” according to Alex Nixon of the Pittsburgh TRIBUNE-REVIEW. Pirates fans are "filling the seats at PNC Park.” Through the first 45 home games this season, “attendance was up 17 percent compared with the same point last year." To date, the Pirates have drawn “more than 1 million people." In addition, TV ratings "have spiked at Root Sports Pittsburgh," up 36% this season compared to the same period in '10. Root Sports Senior VP & GM Shawn McClintock said, “The Pirates’ success on the field has translated to a significant increase in the TV game ratings on Root Sports this season.” Pittsburgh sports merchandise retailers also are having “a winning season” as a result of the Pirates' success. Yinzers in the Burgh Owner Jim Coen said that sales at his sports merchandise store this summer are “double or triple what they were last year, depending on the week.” Coen: “I’ve had to pull Penguins stuff to make room for the Pirates for the first time.” Linda Meyer, who owns three Hometowne Sports stores in the Pittsburgh region, said that sales “increased 40 percent to 45 percent this year … because of renewed interest in Pirates merchandise" (Pittsburgh TRIBUNE-REVIEW, 7/19). USA TODAY’s Bob Nightengale notes Pirates fans “have gotten caught up in the fervor.” Pirates P Joel Hanrahan said, “Baseball is alive again in Pittsburgh. The real baseball fans have been sitting at home, cussing out their TV, cussing out the Pirates. Now, they don’t feel embarrassed. They can come out to our games. Before, fans would come to our games and all you’d see is Steeler shirts and Penguins hats. Now, fans are all wearing Pirates hats and Pirates shirts.” The Pirates have had the “second-largest attendance increase in the NL this season, drawing 158,469 more fans than a year ago.” The team also has had 10 sellouts this season (USA TODAY, 7/19).
GARNERING NATIONAL ATTENTION: In Pittsburgh, Rob Biertempfel reports ESPN has decided to broadcast next Monday's Pirates-Braves game from Turner Field, and the Pirates "are under consideration to appear later this season" on ESPN's "Sunday Night Baseball" and the Fox Sports' "Saturday Game of the Week." The Pirates have not appeared on an ESPN Sunday night telecast since '02, and team President Frank Coonelly said, "I'd love to see that happen. We've been waiting for it for a long time" (Pittsburgh TRIBUNE-REVIEW, 7/19).
A “sellout crowd in Rochester that could reach 15,000 fans with bleacher seating added is expected” for the WPS magicJack FC-Western New York Flash game tomorrow, according to a front-page piece by Jeff DiVeronica of the ROCHESTER DEMOCRAT & CHRONICLE. About 10,000 tickets “have sold in the past five days.” U.S. and magicJack F Abby Wambach, a native of nearby Pittsford, N.Y., “will receive a hero’s welcome." The first 1,000 fans at the game will get Wambach bobbleheads. MVP Healthcare, one of Wambach’s corporate sponsors, “will stage a homecoming rally” prior to the game. In addition, Monroe County officials “plan to proclaim it ‘Abby Wambach Day,’" and Rochester officials are "expected to give” her the key to the city. DiVeronica notes the first matchup between the Flash and magicJack on May 22 in Rochester “drew 8,076 fans, the second-largest crowd in WPS' three-year history.” Tomorrow’s crowd “could eclipse the league record of 14,832 for a standalone match,” set at the inaugural WPS match in ‘09 (ROCHESTER DEMOCRAT & CHRONICLE, 7/19). In Miami, Michelle Kaufman notes with more than 10,000 tickets sold for the game at Sahlen’s Stadium in Rochester, stadium officials are “bringing in extra bleachers to expand capacity to 13,000.” In addition to Wambach, several other U.S. stars also play for magicJack, including G Hope Solo, MF Megan Rapinoe and D Christie Rampone (MIAMI HERALD, 7/19). magicJack Owner Dan Borislow “expects demand for magicJack home-match tickets to increase significantly post-World Cup.” A magicJack spokesperson yesterday said that the team “had been receiving an unprecedented level of calls for tickets, and that 250 group tickets had been sold less than 24 hours after the World Cup final ended.” magicJack’s home field at Florida Atlantic Univ. has “a WPS-low seating capacity of 1,500, but the stadium has significant standing-room capacity that the club expects to fully utilize and possibly expand.” The team is also “looking into increasing seating capacity at FAU” (South Florida SUN-SENTINEL, 7/19).
I CAN FEEL YOUR HEART BEAT: WPS Atlanta Beat Owner T. Fitz Johnson indicated that the team “sold 1,200 tickets" to its July 23 game against magicJack in the two days after the U.S.-Brazil quarterfinal. Johnson said, “It's been a tough haul to keep the league going and keep us all engaged. While we're all cautiously optimistic to keep this going, (the World Cup) is the shot in the arm that we needed. No way could we afford to buy that kind of advertising. It couldn't have come at a better time, and with the Olympics staring at us next year, we just need to build a bridge from this year to the Olympics next year." ESPN.com’s Jeff Carlisle noted there “are only three weeks left in the regular season until the playoffs start, leaving a small window of opportunity to avoid the ‘circus effect’ where fans decide that sampling the product once is enough.” WPS Corporate Development Officer & CFO Kristina Hentschel indicated that “there has been a ‘spike’ in interest from potential investors.” But she said that “any announcement regarding expansion will occur after the current season is over.” Johnson said, "People are putting in a lot of work, myself included, to get a model that works to not only attract expansion, but attract expansion that works to sustain the game over a long period of time. We've seen our history, we've lost teams, and we've got to stop that. We've got to be able to say, 'We've got a plan that will get you through the years.'" Johnson added that “everything is on the table, from how the league office functions, to individual franchises, to player salaries.” A WPS source said that under one proposed plan, “each team's salary cap would be slashed from its current level of $600,000 to a mere $350,000” (ESPN.com, 7/18).
LEAVE WELL ENOUGH ALONE: Columnist Kevin Blackistone said the success of the U.S. team in the World Cup will lead somebody to "try and go out and gin up the league’s that already out there." The Washington Freedom "won a title, and they can’t even stay around here. They’re going down to Boca Raton." Blackistone: "The World Cup is a different event and it’ll be great if women can have a professional league that would thrive. But for whatever reasons, it never translates to that” (“Around The Horn,” ESPN, 7/18).
In K.C., Diane Stafford notes MLS Sporting KC is “marketing to millennials in a big way” by putting quick response codes on the back of seats at Livestrong Sporting Park. QR codes, the “successor graphic designs to bar codes, are full-on aimed at the baby boom echo.” QR codes at Livestrong Sporting Park “link users to the team website,” and allow fans to “click on the icon, get information and earn affinity points.” Sporting KC VP/Communications Rob Thomson said, “Eventually they’ll be able to order food from their seats.” The team currently has “21 digital properties,” and its IT department “has burgeoned from one member last year to 14” (K.C. STAR, 7/19).
JUST SAY NO: In San Diego, Mark Zeigler reports Chivas USA Jorge Vergara yesterday denied rumors that he is considering relocating the MLS club to San Diego. Vergara said, “Not at all. Completely, 100 percent no.” Vergara earlier this month said, “The first option I was offered from MLS was San Diego. I refused it. I didn’t want to go to San Diego. I wanted to go to L.A., and I’m completely sure, 100 percent, we want to stay in L.A.” Zeigler notes Chivas USA “continues to draw sparse crowds at The Home Depot Center, and the thinking is a new home would get the club out of the Galaxy’s shadow and help establish its own identity” (SAN DIEGO UNION-TRIBUNE, 7/19).
THUMB ON THE PULSE: In West Palm Beach, Jonathan Tully reported the Dolphins were the “easy winners” in a recent poll asking local residents "to choose their favorite local pro sports team." The Dolphins “won with 60.2 percent of the vote, far ahead of the Miami Heat, who finished at 20.7 percent.” The Marlins “took third at 6.8 percent, edging past the Florida Panthers at 4.4 percent.” WPS magicJack finished fifth (PALMBEACHPOST.com, 7/18)