WILMINGTON, Del./LOS ANGELES, Dec 7 (Reuters) - Prospective
bidders are piling up for the Los Angeles Dodgers, but Fox
Sports argued on Wednesday that the bankrupt team's owner Frank
McCourt is improperly breaking its broadcasting contract in his
effort to sell the team.
Terms of a Nov. 2 agreement between the Dodgers and Major
League Baseball were sketched out in a court filing on Tuesday,
effectively starting the auction for the team and stadium.
The agreement to sell the team ended months of bitter
feuding between the Dodgers' owner Frank McCourt and baseball's
commissioner Bud Selig.
In return for the team's sale, MLB agreed not to oppose the
sale of the right to broadcast games beginning in 2014.
The Dodgers are seeking court permission to auction the
future media rights earlier than expected to boost the price, a
move opposed by Fox Sports.
"These are fundamental breaches and go the heart of the
contract," said Gregory Werkheiser of Morris, Nichols, Arsht &
Tunnell LLP, who represents Fox, at a U.S. bankruptcy court
hearing in Delaware on Wednesday.
News Corp's Fox Sports holds the rights through
2013 and exclusive negotiating rights beginning November 2012.
The Dodgers argued during a five-hour hearing that bringing
that
exclusive period forward by 10 months will not harm Fox.
Blackstone Advisory Partners is managing the team sale
process and as many as 15 parties have already signed
confidentiality agreements as a first step in the bidding
process, according to three sources familiar with the process.
Basketball legend Magic Johnson, hedge-fund titan Steven
Cohen, media mogul Mark Cuban, California financier Ron Burkle,
sports agent and Los Angeles businessman Dennis Gilbert, former
Dodgers star Steve Garvey are among several parties who have
signed confidentiality agreements, sources have said.
The bankruptcy court will oversee the sales process that
will ultimately require MLB's approval.
The potential bidders all declined comment.
One source who is advising potential bidders said the field
will be narrowed once the Dodgers send out detailed offering
documents and the interested parties begin trying to firm up
financing.
The team anticipates that initial bids will be submitted by
Jan. 13.
Terms of the settlement agreement filed on Tuesday stated
that McCourt must sell the Dodgers and the stadium by April 30.
Fox's Werkheiser said that date may have been chosen because it
is the deadline for McCourt to pay his ex-wife $130 million in a
divorce settlement.
The team filed for bankruptcy in June after MLB rejected
McCourt's previous agreement to renew the television rights in a
deal worth $3 billion. That agreement was struck with Fox, now
the team's bitter adversary, which Judge Kevin Gross called a
"tremendous irony."
The sale price for the team, one of baseball's most storied
franchises, is likely to be among the highest in baseball
history, although some experts said on Wednesday that the
historic baseball franchise may not fetch the estimated $1
billion pricetag as the sale excluded key assets, like the
parking lots.
"If this were the same assets in the same form that McCourt
bought from the News Corp then I think we'd be talking
$900 million to $1 billion," Andrew Zimbalist, a sports
economist with Smith College in Northampton, Massachusetts.
However, Zimbalist said a number of factors will chip away
at that price, estimating Dodgers Stadium will likely need
renovations costing hundreds of millions of dollars.
McCourt bought the team in 2004 for $430 million, primarily
financed with debt. Forbes magazine valued the assets at $800
million in March.
The bankruptcy case is In re: Los Angeles Dodgers LLC,
U.S.
Bankruptcy Court, District of Delaware, No.11-12010.
For the Dodgers: Donald Bowman Jr. of Young, Conaway,
Stargatt & Taylor and Bruce Bennett and Marten Bienenstock of
Dewey & LeBoeuf.
(Reporting by Tom Hals and Sue Zeidler)
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