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LA Dodgers seek early auction of media rights

A batting helmet reflects the dugout of the Los Angeles Dodgers before the start of the Dodgers' American League MLB baseball game against the Minnesota Twins at Target Field in Minneapolis in this June 27, 2011 file photograph. The Los Angeles Dodgers baseball team said on November 2, 2011, it has agreed with Major League Baseball (MLB) officials to a court-supervised sale of the team and its media rights, potentially ending a long-running court battle between the league and owner Frank McCourt. Picture taken June 27, 2011. REUTERS/Eric Miller/Files

Eric Miller/Reuters

The bankrupt Los Angeles Dodgers have sought court permission to auction the team's lucrative media rights earlier than scheduled to bolster the sale of the team under a recent settlement with Major League Baseball, according to court documents filed on Saturday.

MLB previously opposed Dodgers owner Frank McCourt's effort to solicit bids for future media rights, valued at about $3-billion, which sparked a lawsuit against the team by News Corp's Fox subsidiary.

One person familiar with the situation said getting MLB to remain neutral on the contentious issue of a media rights sale was a major concession to get McCourt to agree to a sale of the storied team in bankruptcy court.

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Fox's Prime Ticket sports network holds the Dodgers' media rights through 2013 and has the exclusive right of first negotiation from November 2012 for a new deal.

The Dodgers now want an auction for the media rights to take place over the next few months as the auction for the team occurs.

"Exclusive negotiations with Fox would begin the day after entry of an order granting the amended motion, instead of October 15, 2012, as provided by the Fox contract," said the filing in federal bankruptcy court in Delaware.

MLB declined to comment on Saturday.

A spokesman for Fox was not immediately available.

On Friday, Fox spokesman Chris Bellitti said, "We fully support a change in ownership of the Dodgers."

"In that process, Fox has rights that cannot be violated, as MLB has previously stated. Those rights were negotiated and paid for by us and approved by MLB. We will take all necessary steps to aggressively protect and defend those rights, as our still-pending lawsuit suggests," he said.

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The Dodgers had no further comment "beyond the amended motion to approve marketing procedures for licensing telecast rights it has filed today with the bankruptcy court in Delaware," said a spokesperson for the debtor.

The team and media rights sales will be run by the Dodgers' financial adviser, Blackstone Group LP.


McCourt and MLB ended their long-standing legal battle on Nov. 2 by announcing they had reached an agreement to sell the Dodgers and related assets.

Once any sale is complete, it will end a long-running saga that included the costly divorce of Frank and Jamie McCourt, whose lavish lifestyle was blamed in part for the Dodgers' woes.

Another person familiar with the situation told Reuters on Saturday a large number of groups had expressed interest in the team and that the sale of the Dodgers was expected to be achieved by the April 1 deadline targeted under the agreement.

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Other sports industry executives have expressed skepticism the team could be sold that quickly, particularly with the issue of the media rights unsettled.

The auction, which will be overseen by the U.S. Bankruptcy Court in Delaware over the next several months, is expected to fetch offers of more than $1-billion for the team and related assets. The future media rights have been valued as high as $3-billion.

The Dodgers filed for bankruptcy in June after MLB Commissioner Bud Selig rejected a proposed sale of the team's broadcast rights to generate desperately needed cash. MLB said it wanted to delay selling the rights until Fox's exclusive negotiating period had expired.

McCourt has said the media rights sale could have raised the cash needed to hold on to the team, while MLB argued it would only be satisfied by a sale of the team.

Among potential suitors for the Dodgers named in media reports are Ron Burkle, the investor and head of the Yucaipa Companies private equity firm, Peter O'Malley, former owner of the Dodgers, and former Dodgers star Steve Garvey.

Burkle told Reuters in an email this month, "It is one of the best brands in all of sports, and like many people, I'd be proud to be part of its future."

McCourt bought the team in 2004 for $430-million from Fox, financing the purchase primarily with borrowed money.

Forbes magazine valued the assets at $800-million in March. The new owner would be the third since O'Malley sold the team to News Corp in 1998. The Dodgers had remained in the O'Malley family since its patriarch, Walter, moved the team to Los Angeles from Brooklyn in 1958.

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