Los Angeles Dodgers Sue Fox in Bankruptcy Court Over Regional TV Contract

The Los Angeles Dodgers sued News Corp. (NWSA)’s Fox Sports, accusing the broadcaster of interfering with the bankrupt baseball team’s plan to sell itself and its television rights through a court-sanctioned auction.

Fox Sports sent a letter that “constitutes a deliberate attempt by Fox to interfere with the ability of LAD and its advisers, including Blackstone Advisory, to sell LAD’s assets,” the team said in papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware.

Team owner Frank McCourt has agreed to sell the Dodgers in a process where separate bids would be accepted for the team and its television rights. Fox Sports Net West 2 LLC has the current TV contract, which gives it the exclusive right to negotiate an extension through November 2012.

The Dodgers have filed court papers seeking approval to immediately start talking with potential buyers of the television rights, the team’s most lucrative asset. Under the proposal, the team would negotiate with Fox for 45 days. If no deal was struck, the Dodgers would talk to competing bidders.

In its filing today, the team asked U.S. Bankruptcy Judge Kevin Gross to bar Fox from “taking any act that otherwise interferes with any property rights of the LAD estate, including existing and future media rights.”

Fox has said it plans to challenge any early sale, or negotiations, of the media rights. The company said it may update a lawsuit filed against the Dodgers in September.

‘Latest Chapter’

“This is just the latest chapter in the current owner’s ongoing scheme to avoid honoring his contractual obligations,” Fox said in an emailed statement. “The full truth of this unfortunate situation will soon become apparent to all.”

Early in the team’s bankruptcy, Major League Baseball opposed an effort by the Dodgers to seek buyers for the television rights. After owner Frank McCourt agreed to sell the team, as Baseball Commissioner Bud Selig had demanded, MLB agreed that the Dodgers could market the television rights separately from the team.

MLB spokesman Patrick Courtney declined to comment for this story.

The lawsuit is Los Angeles Dodgers LLC V Fox Sports Net West 2, LLC, 11-53829. The bankruptcy case is In re Los Angeles Dodgers LLC, 11-12010. Both are in U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.