Fox Gave McCourt $30M Loan After Learning He Had Approached Time Warner
The $30M personal loan that Fox gave Dodgers Owner Frank McCourt last week was "not only to help him meet payroll and pay for increased security after the shocking beating of a San Francisco Giants fan, but also to stay in McCourt's favor after learning he had approached rival Time Warner Cable for a similar loan," according to Diane Pucin of the L.A. TIMES. Two sources said that McCourt told Fox officials that Time Warner was "ready and willing to assist him with his financial problems." Time Warner reportedly "also was ready to offer a full sponsorship package that included naming rights for Dodger Stadium." Sources said that weeks before making the $30M loan, Fox "had reached a tentative agreement with McCourt for a new Dodgers television contract worth $3 billion over 20 years that would include a $375-million upfront payment." But MLB Commissioner Bud Selig "has not yet ruled on the proposed deal." The Dodgers "grew in importance for Fox after Time Warner in February surprised everyone by striking its own 20-year deal with the Lakers." A source said that Selig was "upset with Fox because he had asked it to 'stand down' and not get involved with McCourt's finances." The source added that Selig also "did not want to immediately act on Fox's proposed deal because he feared McCourt would use some of that money to cover personal debts." McCourt "grew worried when Selig did not immediately act on the proposed Fox deal and reached out to Fox and Time Warner about needing a cash infusion." Pucin notes when Fox sold the Dodgers to McCourt in '04, the deal "included a clause that would allow Fox to match any competing offer for television rights." MLB on Wednesday assumed control of the Dodgers from McCourt (L.A. TIMES, 4/22).
MASTER PLAN: The WALL STREET JOURNAL's Matthew Futterman reports "for months a new deal for the TV rights has been a key element of Mr. McCourt's plans to keep control of the team, despite mounting debts, an embarrassing and expensive divorce case and recent concerns over security at Dodger Stadium, all of which have brought increased scrutiny of his oversight of the team." At the same time, Fox officials indicated that "maintaining the rights to televise Dodger games ... has become increasingly urgent within Fox." Analysts value Fox's Southern California RSNs "at more than $1 billion." A Fox spokesperson said in a statement Thursday, "We want to be a part of the solution. A financially stable Dodgers team is good for fans, good for Major League Baseball, and good for Fox" (WALL STREET JOURNAL, 4/22).