WASHINGTON — A U.S. District Judge in Delaware says a bankruptcy judge erred in freeing the Los Angeles Dodgers from provisions of its current Fox Sports TV contract.
U.S. District Judge Leonard Stark released a 33-page ruling Tuesday explaining his reasoning after he issued an order last Friday to halt the Dodgers' plans to sell the media rights to future games as part of the team's impending sale.
Fox currently has the rights to produce, record and telecast Dodgers games through the 2013 season. The contract gives Fox certain rights in negotiating an extension, including the right to talk exclusively with the team in advance of competing offers. But a judge handling the team's bankruptcy proceedings ruled the "no-shop" provisions were unenforceable in bankruptcy.
Fox has appealed that decision, which hurts its chances of holding on to the broadcasting rights. Lawyers are set to argue the appeal before Stark in January.
Stark said lawyers for Fox have demonstrated a substantial likelihood they will succeed in January's hearing. That's because the bankruptcy judge who freed the Dodgers from the current contract arrangement with Fox improperly relied on a single case in making his decision, Stark said. In addition, Stark wrote that U.S. Bankruptcy Judge Kevin Gross likely made two factual mistakes: finding that the sale of the broadcasting rights was necessary to ensure creditors were paid and finding that the broadcasting rights needed to be sold to maximize the team's value.
The Dodgers sought bankruptcy protection in June after baseball Commissioner Bud Selig rejected a new TV deal with Fox that Dodgers owner Frank McCourt was counting on to keep the franchise solvent. The Dodgers ultimately reached an agreement with the league that calls for a sale of both the team and the media rights. The team must be sold by April 30.
Fox Sports spokesman Chris Bellitti did not immediately return telephone messages Tuesday requesting comment. Dodgers spokesman Robert Siegfried said the team would not discuss Tuesday's opinion.
The April 30 sale deadline in the settlement between the Dodgers and MLB coincides with the deadline for McCourt to pay $131 million to his ex-wife, Jamie, as part of their divorce settlement.