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Dodger Stadium parking lots should be part of team sale, Fox says

Fox Sports, which is trying to block owner Frank McCourt's attempt to sell the Dodgers' TV rights, argues in a court filing that the sale of the parking lots is a better alternative to boosting the team's sale price.

November 24, 2011|By Bill Shaikin
  • In a court filing Wednesday, Fox Sports argued the Dodger Stadium parking lots ought to be included in a team sale if owner Frank McCourt is interested in boosting the team's sale price.
In a court filing Wednesday, Fox Sports argued the Dodger Stadium parking… (Brian van der Brug / Los Angeles…)

If Frank McCourt wants to boost the sale price of the Dodgers, he ought to include the Dodger Stadium parking lots in the sale instead of tearing up an existing contract with Fox Sports, the television company argued in a court filing late Wednesday.

And, since the sale of the team alone would enable the Dodgers to repay creditors in full, Fox urged the U.S. Bankruptcy Court to deny McCourt's proposal to market the team's television rights as part of the sale process.

"Mr. McCourt is not necessary to this process," the Fox filing read. "He should get out of the way and let everyone return to the business of baseball."

Fox's fourth legal attack on McCourt in eight days came as the company found itself without allies in Bankruptcy Court. On Wednesday, the creditors' committee supported the Dodgers' bid to market their television rights.

When 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 except for Fox.

In a statement last week, the Dodgers called Fox "obviously desperate" to avoid competitive bidding for the team's television rights now, even though that bidding could lead to a "record-smashing sale price for the team and benefit not just the Dodgers but all of baseball."

In his agreement to sell the Dodgers, McCourt extracted several significant concessions from MLB, including the league's promise not to contest the marketing of television rights and the league's willingness to let McCourt keep the Dodger Stadium parking lots so long as he transferred a long-term lease to the new team owner.

The latter provision could force the new owner to pay about $10 million a year to McCourt or strike a separate deal to buy the parking lots from him.

In its filing Wednesday, Fox suggested that the court should order the parking lots sold along with the Dodgers so McCourt could achieve his stated goal for selling the television rights — to maximize the value of the team.

"McCourt's failure to sell the parking lots certainly depresses the value of the team," Fox claimed.

In backing the Dodgers on Wednesday, the creditors said the sale price might be enhanced "by demonstrating to potential purchasers … the true value of the telecast rights after subjecting such rights to a competitive marketing process."

However, Fox accused McCourt of abusing the bankruptcy laws in an effort to break a contract that forbids the Dodgers from negotiating with any other media outlet until Nov. 30, 2012. The Dodgers have asked the court to declare that provision unenforceable.

In its filing, Fox said prospective bidders could engage media consultants to estimate the value of future television rights and said the Dodgers would be worse off by selling those rights now.

"Media rights will be more valuable in the future, but Mr. McCourt seeks to monetize those rights now since he will not be around," the Fox filing read.

The Dodgers have said the new owner would not be obligated to accept whatever television deal might be negotiated now. The creditors supported the Dodgers' plan for the court to determine potential damages to Fox, enabling the team to halt the television rights sale if those damages were deemed too great.

The creditors said they believed any damages Fox might suffer would be "neglible at best." Fox said the damages could become "colossal" if the loss of Dodgers' broadcast rights leads to the closure of Prime Ticket, one of Fox's two regional sports networks based in Los Angeles.

Fox and the Dodgers are scheduled to start mediation on Monday. In the absence of a settlement, court hearings on the issue are set for Nov. 30 and Dec. 7-8, according to the Fox filing.

bill.shaikin@latimes.com

twitter.com/BillShaikin

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