Creditors Say LA Dodgers Should be Allowed to Sell TV Rights as Well as Team

November 24, 2011

The creditors’ committee in the Dodgers’ bankruptcy proceedings said in court filing Wednesday that the LA Dodgers should be allowed to market their television rights as they sell the team.

The position further isolates Fox Sports as it fights to preserve a contract that guarantees the company exclusive negotiating rights with the Dodgers for another year. Fox and the Dodgers are set to start mediation on Monday.

When owner Frank McCourt initially proposed an early auction of the Dodgers’ television rights  to raise the money needed to preserve his ownership of the team he was opposed by his ex-wife, the creditors, Major League Baseball and Fox. Now that McCourt has agreed to sell the Dodgers, he has neutralized all of those parties save Fox.

In Wednesday’s filing, the creditors said they previously opposed a sale of the Dodgers’ television rights because MLB had threatened to veto any such sale and because Fox had threatened damages so “massive” as to put the repayment of creditors at risk. The creditors said they now support such a sale because MLB no longer objects and because the Dodgers have asked the court to determine potential damages. If the damages were deemed too great, the team could halt the sale.

The creditors also said they believe any damages Fox might suffer “should be neglible at best.” They backed the Dodgers’ position by saying that the value of the team might be enhanced “by demonstrating to potential purchasers … the true value of the telecast rights after subjecting such rights to a competitive marketing process.”

Under the current Fox contract, the Dodgers cannot negotiate with any other media outlets until Nov. 30, 2012. The Dodgers have asked the court to declare that provision unenforceable.