SBD/November 14, 2011/Franchises

Dodgers Ask Bankruptcy Court For Permission To Solicit Bids For TV Rights

Proposed cable rights deal would be subject to final approval by new owner
An ongoing battle between the Dodgers and FSN promises to intensify following a renewed move Saturday by the club to market its cable TV rights well in advance of the current contract terms. The Dodgers made an amended filing with the U.S. Bankruptcy Court for the District of Delaware to begin soliciting bids for the rights, revising a bid first made in September. The latest move takes into account developing efforts by Dodgers Owner Frank McCourt to sell the club, and the filing claims the separate marketing of the TV rights will enable the franchise to "provide prospective buyers … with real-world information about what the value of the telecast rights would be if openly marketed." Any proposed cable rights deal, however, would be "expressly subject to final approval by the new owner," the filing continues. The moves to both separate out the media rights in another bid process and hold the media rights auction over the next several months represent key parts of McCourt's strategy to maximize the value of the Dodgers' assets. And the club in the latest filing acknowledged, as it has in the past, that its long-term cable rights represent "a large share of the team's overall value." FSN holds exclusive rights  through the '13 season, including an exclusive negotiating window that in the current pact does not even begin until November '12. The Dodgers are seeking to have FSN's potential damages identified before any new deal is consummated. The club also claims the network has shown an "adamant refusal to engage in any form of negotiation or discussion" on the issue. A hearing on the media rights is scheduled for Nov. 30 (Eric Fisher, SportsBusiness Journal).

TIMELINE OF SALE COULD BE JEOPARDIZED: In L.A., Bill Shaikin reported an extended legal battle over the rights issue “could jeopardize the timetable established by the settlement” between McCourt and MLB, which “calls for a new owner to be selected by April 1 and for the deal to be closed by April 30.” It is “possible that McCourt could sell the Dodgers and Dodger Stadium in one deal, the parking lots surrounding the stadium in a second deal and the television rights in a third deal.” An investment banker with several clients interested in the Dodgers said, “I don’t even know what’s for sale here” (L.A. TIMES, 11/13).
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