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Dodgers are forbidden to sell TV rights for now

Judge puts sale of team on hold pending a Jan. 12 hearing.

December 23, 2011|By Bill Shaikin
  • Dodgers owner Frank McCourt arrives for the dedication of the Dodger Dreamfield at Mona Park in Compton.
Dodgers owner Frank McCourt arrives for the dedication of the Dodger Dreamfield… (Mark Boster / Los Angeles…)

In a ruling that could limit the field of potential bidders for the Dodgers, a judge ruled Friday that the team must halt the sale of its television rights for now.

U.S. District Judge Leonard Stark ruled that he was "likely to conclude" that a prior court decision permitting the sale was "based on one or more clearly erroneous findings of fact."

Stark put the sale on hold pending a Jan. 12 hearing. If he follows through on Friday's ruling, the Dodgers would be prevented from selling their television rights along with the team, a step the Dodgers and their creditors had argued would maximize the sale price for the team.

The Dodgers could pursue their own appeal, but it is unlikely that such an appeal could be resolved in time to affect the sale of the team. Owner Frank McCourt has agreed with Major League Baseball that he would complete the sale of the Dodgers by April 30.

By shopping the television rights now, McCourt might have attracted bidders who could have used hundreds of millions of dollars of a new television contract to help finance the purchase of the team, according to Marc Ganis, president of Chicago-based Sportscorp Ltd.

McCourt would be more likely to get a higher price with a wider field of bidders, Ganis said.

However, MLB has the right to approve bidders, and it is uncertain how seriously the league would consider bids that would not be viable without immediate television money.

The Dodgers are expected to sell for more than $1 billion. A new television contract could be worth about $4 billion over 20 years.

In his ruling Friday, Stark wrote that there is no indication the Dodgers' emergence from bankruptcy depends on selling the future television rights. He wrote that putting the sale on hold should not harm either the Dodgers or their creditors and cited "the public's interest in enforcing contractual rights."

The Dodgers' contract with Fox prevents the team from negotiating with other broadcast outlets until Nov. 30. U.S. Bankruptcy Judge Kevin Gross had ruled that a so-called "no-shop" provision was not enforceable in bankruptcy; Stark said he is "likely to conclude" the provision should remain in effect.

MLB was heartened by Friday's ruling, wary of a precedent that might encourage other teams to try to break television contracts. The league did not object to the Dodgers' plan in court, as a concession for McCourt's agreement to sell the team.

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