Dodgers, MLB, Fox Meet Today To Set Rules For Evidentiary Hearing Oct. 31
The three main parties in the ongoing Dodgers bankruptcy case -- the team itself, MLB and FSN -- yesterday each hardened their legal positions in advance of a session tomorrow that will set rules for a key evidentiary hearing beginning Oct. 31 in Wilmington. MLB again said that the Dodgers' only viable plan to emerge from bankruptcy is to sell the club, and Owner Frank McCourt's proposed plan to sell the club's TV rights would significantly serve his personal financial needs fueled by his ongoing divorce, and potentially create another liquidity crisis as soon as '13. "The delay attendant to Mr. McCourt's frolics is harming the [Dodgers] and every party in interest. … So these cases are at a critical crossroads," MLB said in its filing. Fox, meanwhile, again lent its support to the league, and said that if its current rights deal extending through '13 is rejected in the name of a new rights sale, the RSN would likely receive a largely rejection damages claim that would dilute the club's other creditors. Fox had previously sued the Dodgers on its own, but in this instance is asking the judge to deny the McCourt TV rights plan. The Dodgers responded that MLB Commissioner Bud Selig is significantly overreaching in his bid to sell the team, and does not have unfettered power. "The Commissioner does not have the authority to force an owner to sell its team, as the Commissioner has sought to do both before and during these bankruptcy cases," the club said in its latest filing. "The Commissioner has acted outside his authority, and failed to comply with basic rudiments of due process, in refusing to approve any license of the telecast rights as a pretext to force a sale of the Dodgers. The Commissioner has also violated his duty of good faith and fair dealing." The club argued further that the April appointment of Tom Schieffer as club monitor violated league rules (Eric Fisher, SportsBusiness Journal).
BLACKOUT: In L.A., Bill Shaikin notes as the Dodgers "pressed for the television rights sale with which McCourt claims the team could prosper, Fox Sports said such a sale could leave the team liable for damages so 'massive' as to threaten the viability of McCourt's strategy to exit bankruptcy as the team's owner." Fox also "threatened not to air Dodgers' games for the final two years of the current contract, and Major League Baseball reiterated that it could render McCourt's television rights worthless by kicking the Dodgers out of the league" (L.A. TIMES, 10/12).