In the past several months the LA Dodgers have had their share of legal issues and now are just trying to move on past the legal storm that is Frank McCourt, who finally agreed to sell the team. Selling the team has been a difficult process, with the variety of bidders and the need of approval by Major League Baseball on the accepted bidder. Now the Dodgers my face another issue, a subsidiary of Fox is interfering with their efforts to sell the team. Fox has a contract with the Dodgers to televise Dodger games through 2013. The contract also gives the subsidiary of Fox exclusive negotiating period from Oct. 15, 2012 through Nov. 30, 2012. A lawyer from Fox sent a letter to the Dodgers’ financial adviser, Blackstone Advisory Partners, demanding that they cease efforts to solicit bids for television rights to Dodgers games. Fox claims that by allowing the Dodgers to take bids on the media rights they have violate the exclusive negotiation term of the contract. The Dodgers rebuttal was that the letter “was intended to interfere with the sale of the Dodgers and their assets in bankruptcy.” The Dodgers asked U.S. Bankruptcy Judge Kevin Gross for a motion to allowing them to market the media rights for 2014 and beyond. Fox sued the Dodgers on Sept. 27, asking for an injunction to stop the Dodgers from acting in a manner inconsistent with the contract. The suit has not been settled but the Dodgers are required to be sold by April 30, 2012.
If the Dodgers are allowed to market the media rights for the 2014 season and beyond, they can greatly impact the price at which the team is sold for. The future owner would have the ability to negotiate a better deal than the one the Dodgers are currently under. This can be detrimental to Fox, who is looking to renew the contract. I am sure the Dodger games are the one of or the most valued programs on Fox Sports Net West, the Fox subsidiary suing. As for the suit is hard to tell which way the court will go. Fox does have exclusive negotiation rights, but whether they are valid only in the outlined period is still up in the air. If the motion the Dodgers requested is approved and they are allowed to market the media rights, Fox would have their exclusive 45-day negotiating period start whenever the court issues the order. This could play a fact in the final decision or settlement. The suit is up in the air, but what is not up in the air, is that the Dodgers, Dodger fans, and Major League Baseball are glad that the Dodgers will finally be out of the hand of Frank McCourt.
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