- Associated Press - Thursday, December 8, 2011

WILMINGTON, DEL. (AP) - Fox Sports would suffer significant harm if the Los Angeles Dodgers auction off the television rights to future games, a sports media expert testified Thursday in a bankruptcy court dispute over the future of the major league team.

Edwin Desser said the Dodgers‘ plan to sell media rights to games starting in 2014 would violate Fox’s rights under its existing contract with the Dodgers. That contract gives Fox certain rights beyond televising games through 2013, including an exclusive 45-day period starting next October to negotiate a new TV deal with the Dodgers.

“These are extremely valuable and extremely important rights,” said Desser, a former executive vice president for the NBA and chief negotiator of the NBA’s national media agreements.

The Dodgers want to move up the timetable for Fox’s exclusive negotiating period by 10 1/2 months, saying a media rights sale now in conjunction with a sale of the team itself is the best way to maximize value for creditors and emerge from bankruptcy.

The Dodgers maintain that Fox would have many of the same rights under the proposed sale process as it has under its existing contract. But Desser said the proposed sale could put Fox at an unfair disadvantage to 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,” he said.

Desser’s concerns were echoed by Robert Thompson, a former Fox Sports executive now working as a consultant for Fox.

Thompson said Fox has a much greater likelihood of successfully extending its contract with the Dodgers under the existing agreement than under the proposed 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.

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.

Desser said the Dodgers would be better off sticking to their existing agreement with Fox instead of leaving themselves open to damage claims for breach of contract.

“I believe the team will do exceptionally well following the contract and not opening itself to damage claims,” he said.

Under the proposed sale process, any buyer of the team would have the discretion to accept or reject any media rights deal reached between Fox and the Dodgers‘ existing management.

The Dodgers sought bankruptcy protection in June after baseball Commissioner Bud Selig rejected a new TV deal with Fox that Dodgers owner Frank McCourt was counting on to keep the franchise solvent.

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.

But after battling with the Dodgers over control of the ballclub and seeking to force McCourt to sell the team, MLB reached a settlement last month with the help of a court-appointed mediator.

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.

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