WILMINGTON, Del. — A bankruptcy judge on Wednesday approved a settlement between the Los Angeles Dodgers and Fox Sports that clears the way for a sale of the team.
The settlement approved at a hearing in Delaware ends a contentious legal battle between the ball club and Fox.
Under the settlement, the Dodgers are giving up plans to sell media rights to games starting in 2014 and sticking with their existing contract with Fox, which gives Fox exclusive rights to try to negotiate a contract extension starting later this year.
Major League Baseball and the Dodgers’ committee of unsecured creditors support the settlement, which allows the team to be sold by April 30.
Fox Sports Net West, part of Rupert Murdoch’s News Corp., sued the Dodgers in September, claiming that owner Frank McCourt’s attempt to sell the media rights violated its current broadcast agreement.
While U.S. Bankruptcy Judge Kevin Gross ruled the Dodgers could go ahead with the proposed media sale, U.S. District Judge Leonard Stark said Dec. 24 he likely will agree with Fox’s position that Gross erred. That caused the Dodgers to back down.
“There is significant risk that the District Court will reverse this court’s decision,” the team wrote in a new filing to the bankruptcy court.
“We are pleased that these matters between our two organizations have been resolved,” Fox said in a statement. “We were never in favor of litigation, but it was imperative that we protect our exclusive media rights. Under the terms of the settlement, Fox’s media rights remain in place and we look forward to working with new ownership on future television rights discussions.”
Just days before the team was expected to miss payroll, the Dodgers filed for bankruptcy protection in late June. McCourt reached an agreement with Major League Baseball in November to put the team up for sale, and that deal said the team is to be sold by April 30, which coincides with the deadline for McCourt to pay former wife, Jamie, a $131 million divorce settlement.
Initial bids for the team are due by Jan. 23, and many groups are expected to submit offers. Joe Torre, Orel Hershiser, Steve Garvey, Peter O’Malley and Fred Claire are among those who have expressed interest.
The Dodgers have been in turmoil since October 2009, when Frank and Jamie McCourt separated and Frank fired her as the team’s chief executive officer.
As part of the settlement, McCourt still owes Fox $30 million that he borrowed on April 13 to make the team’s payroll. Fox also has the right to object to any purchase of the team by any entity owned directly or indirectly by Time Warner Cable or affiliated with Time Warner.