Fox’s $3 Billion TV Agreement With Dodgers May Hinge on Selig Team Trustee
The Los Angeles Dodgers’ new $3 billion broadcast agreement with News Corp. (NWSA)’s Fox may need the approval of Major League Baseball’s yet-to-be-named trustee for the team, according to a former CBS Sports executive.
“The trustee would take a very serious look at that deal and could very well void it,” Neal Pilson, a former president of CBS Sports, said in an interview, noting he isn’t privvy to the details. “He may very well think the team can get more money if they put it up for bid.”
MLB must approve any TV deal Dodgers owner Frank McCourt negotiates. The 20-year accord is worth about $3 billion, the Los Angeles Times reported today, citing Steve Soboroff, team vice chairman. McCourt would use proceeds to reduce debt and settle a property dispute with his ex-wife Jamie. Citing the Los Angeles Lakers’ deal with Time Warner Cable Inc. (TWC), a trustee might seek bids, Pilson said.
“It’s in everyone’s best interest to find a long-term solution to the Dodgers current challenges, and we’ll continue to work with Major League Baseball and the Dodgers to be a part of that solution,” New York-based News Corp. said in an e- mailed response to questions.
Time Warner Cable and the Los Angeles Lakers entered into a 20-year broadcast agreement that creates two high-definition cable channels to carry the team’s games starting with the 2012- 2013 season. Financial terms weren’t provided.
Lou D’Ermilio, a Fox Sports spokesman, declined to comment beyond the statement. Josh Rawitch, a Dodgers spokesman, said the team had nothing to say beyond Soboroff’s comments to the Los Angeles Times. Pat Courtney, a spokesman for Major League Baseball in New York, declined to comment.
News Corp., controlled by Chairman and Chief Executive Officer Rupert Murdoch, gained 19 cents to $17.48 today in Nasdaq Stock Market trading. The Class A shares have climbed 20 percent this year.
Major League Baseball took over business operations of the Dodgers, which is struggling with debt and a fight over whether Frank or Jamie McCourt owns the team.
Commissioner Bud Selig announced yesterday that baseball would appoint a representative to run the Dodgers “because of my deep concerns regarding the finances and operations” as the divorced owners argue over how to divide the team.
Bloomberg Businessweek reported last August that, according to unidentified people close to the McCourts, the Dodgers’ debt stood at around $525 million, the majority of it borrowed against future ticket sales. Forbes magazine estimated almost all the team’s profit was being eaten up by interest.
McCourt, a Boston real-estate developer, bought the Dodgers from Murdoch’s News Corp. for $430 million in 2004.
The Dodgers, coming off their second losing season since 1999, have a losing record again this year. The team went to the playoffs three times under McCourt’s ownership.
The McCourts were granted a divorce in October after almost 31 years of marriage. A Los Angeles judge last year invalidated a postnuptial agreement that Frank McCourt claimed made him the sole owner of the Dodgers, leaving the team’s status in limbo.
Court documents filed in the divorce said the McCourts took $108 million in personal distributions from the team between 2004 and 2009, almost half for mortgages and real estate.
The Dodgers, who moved to Los Angeles in 1958 from Brooklyn, New York, are one of the most storied franchises in American sports. Jackie Robinson of the Brooklyn Dodgers broke baseball’s color barrier in 1947 as the first black player in the major leagues in the modern era.
The O’Malley family ran the Dodgers from 1950 until the team was sold in 1998 to Fox Entertainment Group, which is owned by News Corp.
“The end of the road seems pretty clear,” said Alan I. Rothenberg, Los Angeles-based founder of Major League Soccer and chairman of Premier Partnerships Inc., a sports and entertainment marketing firm. “A sale will be overseen, monitored, controlled -- whatever you want to say -- by Major League Baseball.”
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