The committee of unsecured creditors for the bankrupt Los Angeles Dodgers threw its support behind the team's effort to sell TV broadcast rights earlier than expected, riling News Corp's Fox Sports.
In a document filed in Delaware bankruptcy court on Wednesday, the committee said it believed the expedited sale of the telecast rights would help facilitate the team's exit from bankruptcy and maximize the team's value.
This week, bankruptcy judge Kevin Gross appointed retired federal judge Joseph Farnan Jr. as a mediator to try to sort out the dispute between the team and Fox Sports regarding the sale of television telecast rights. The mediation is set to start on Nov. 28 in Los Angeles.
Fox has a contract to broadcast Dodgers games through 2013 and the exclusive right to negotiate a new contract starting November 2012.
The Dodgers filed for bankruptcy protection in June as owner Frank McCourt struggled to cover costs. Major League Baseball fought McCourt's efforts to retain control of the team in bankruptcy court.
The Dodgers and Major League Baseball ended their long-running dispute in early November with a deal to sell the team, including the media rights. Now the Dodgers want to start the media rights auction soon instead of waiting for the contract to expire in order to boost the team's overall value.
Fox has asked the bankruptcy court to consider dismissing the bankruptcy case, arguing the team's bankruptcy was not valid and was an attempt to invalidate Fox's TV contract.
Financial information on the team and its assets is scheduled to go to potential buyers in December with initial bids due in January, two sources familiar with the process said last week. The sale of the team inherently includes media rights, whether or not it is free and clear of a Fox contract.
The sales process is expected to be wrapped up by the end of April, in time for the start of the 2012 Major League season, the sources said. The sale is expected to occur regardless of whether the issues with Fox are resolved, but those issues might affect the selling price, they said.
Also in the filing on Wednesday, the committee of unsecured creditors said they were hopeful the mediation would result in a settlement, but in the event it was not successful, the committee supported the Dodgers' motion to accelerate the sale of its broadcast rights.
The case is In re: Los Angeles Dodgers LLC, U.S. Bankruptcy Court, District of Delaware, No. 11-12010.