|LA Dodgers & Fox Sports Agree Settlement Opening Up Sale of Team|
Thursday, 12 January 2012 05:08
A bankruptcy judge in Delaware on Wednesday approved a settlement between the Los Angeles Dodgers and Fox Sports pavings the way for the sale of the team.
The settlement, reached late Tuesday and quickly approved at a brief court hearing Wednesday morning, ends a contentious legal battle between the ball club and Fox.
"The agreement with Fox clears the path for the Dodgers to sell the team on schedule and to maximize the value of the debtors' estate," Dodgers attorney Sid Levinson told Judge Kevin Gross.
Fox Sports attorney Greg Werkheiser said Fox was glad to have resolved its differences with the Dodgers, and attorneys for Major League Baseball and the Dodgers' committee of unsecured creditors told Gross they support the settlement.
Gross quickly signed off on the settlement, saying it was in the best interest of all parties in the Dodgers bankruptcy case.
The settlement was reached with the help of a court-appointed mediator after a federal district court judge said last month that Fox likely would win an appeal of a ruling by Gross that authorized the Dodgers to begin a process to market the media rights to future games starting in 2014.
Fox Sports Net West, part of Rupert Murdoch's
Under the settlement, the Dodgers will abide by the terms of the existing contract with Fox. That contract gives Fox an exclusive 45-day period starting in October to try to negotiate a contract extension with the Dodgers. The contract also prohibits the Dodgers from talking to other potential buyers of the media rights before Nov. 30 and gives Fox a limited right of first refusal on competing offers received after that date.
Gross had ruled that those "no-shop" provisions were unenforceable in bankruptcy and approved a marketing process that moved up the exclusive negotiating period by about 10 months. That would have forced Fox to try to strike a new deal with the Dodgers this month and made any agreement subject to approval by the successful bidder for the team, a condition Fox said would decrease its leverage in negotiations.
But the Dodgers and the creditors committee insisted the media rights needed to be marketed in conjunction with a sale of the team itself to maximize value.
The Dodgers backed away from that position after U.S. District Judge Leonard Stark, granting a stay in an appeal by Fox, indicated that Gross likely erred in approving the media rights marketing process. Stark's decision threatened plans to sell the team by an April 30 deadline called for an agreement between the Dodgers and Major League Baseball.