The Dodgers’ goal in bankruptcy: a television rights auction
The Los Angeles Times’ Bill Shaikin has been reading the bankruptcy filings this morning, and notes that Frank McCourt’s apparent end game here is to get the bankruptcy court to auction off the television rights for the Dodgers, thereby providing them with the cash they need to keep going.
The obstacles: the Dodgers’ current deal with Fox forbids them from negotiating with anyone but Fox until November of next year and, or course, the anticipated objections of major league baseball.
As for the former, the bankruptcy court could simply set that provision aside from the Fox deal or, depending on how they feel about things at the moment, Fox could simply waive it and join in an auction. Major League Baseball, meanwhile, is likely to object to any rights auction, as it, in the normal course, has the power to approve all TV deals. As we learned in the Rangers’ bankruptcy, however, bankruptcy courts often disagree with Major League Baseball with respect to the powers it truly possesses.
What remains problematic, however, is what would happen even if there is a rights auction like McCourt wants. Under the proposed-but-kiboshed Fox deal, a big chunk of the up-front money was going to Jamie McCourt as a means of settling the divorce case. It seems unlikely that the bankruptcy judge would even touch that given that it’s the Dodgers who are in front of him and not the McCourts in their personal capacity (and how a judge could agree that $180 million or whatever off the top to the McCourts serves the best interests of the team’s creditors is beyond me).
So, unless I’m missing something, best case scenario for McCourt here is a rights auction that brings a lot of money, at the end of which he still has to fight with Jamie over who really owns the team. I guess that’s better than nothing, but it’s not exactly where he wants to be either.