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Judge approves Dodgers media rights sale
Question of the Day
In testimony earlier Thursday, Robert Thompson, a former Fox Sports executive now working as a consultant for Fox, said the company has a much greater likelihood of successfully extending its contract with the Dodgers under the existing agreement than under the bankruptcy sale process. He also said the loss of the Dodgers could spell the end of Fox’s Prime Ticket regional sports network, which he said will earn about $70 million for the current fiscal year, thanks in large part to the Dodgers.
“There’s no single other sports team that I would say creates as much value that allows Prime Ticket to make those profits as the Dodgers do,” Thompson said.
Sports media expert Edwin Desser, also testifying for Fox, said the sale of media rights could put Fox at an unfair disadvantage to other potential buyers such as Time Warner by allowing other bidders to see details of Fox’s discussions with the Dodgers during the exclusive negotiating period.
“It really eviscerates the exclusivity and confidentiality of those negotiations,” said Desser, a former executive vice president for the NBA and chief negotiator of the basketball league’s national media agreements.
Desser said he expects Time Warner to “bid vigorously” for the rights to Dodgers games starting in 2014.
“I expect that Time Warner is going to be very interested, and Fox is well aware of that,” said Desser, who estimated the fair market value of the television rights to be at least $100 million a year.
The Dodgers subsequently argued in bankruptcy court that auctioning off the television rights to future games was the best way to maximize the value of the bankruptcy estate for the benefit of all stakeholders.
The league joined Fox in opposing such as sale, saying any plan to sell television rights without MLB approval was “dead on arrival” and would spell the end of the club. League attorneys argued that such a sale would breach the Dodgers‘ existing contract with Fox and provide grounds for termination of the franchise for failure to abide by MLB agreements.
The settlement calls for the sale of the team, the future media rights and Dodger Stadium, but not the parking lots and land surrounding the stadium, which are owned by a separate company that is controlled by McCourt and not involved in the bankruptcy. The settlement between the Dodgers and MLB gives McCourt sole discretion to sell the parking lots and land surrounding the stadium.
While decrying the secrecy surrounding the settlement, Fox attorneys have questioned the proposed sale deadline of April 30, which also happens to be the deadline for McCourt to pay his ex-wife, Jamie, $131 million as part of their divorce settlement.
By Robert N. Tracci
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