Dodgers will be sold in unique approach
Major League Baseball and embattled Los Angeles Dodgers owner Frank McCourt have agreed to a unique structure for the auction of one of the game's most storied franchises.
Under a deal hammered out during two weeks of intense negotiations last month, the league will allow McCourt and his advisers to solicit separate bids for the team and the future media rights to its games, The Wall Street Journal reported in its Tuesday edition, citing people familiar with the talks.
The structure of the auction was the biggest of several concessions MLB made to get McCourt to agree to sell the Dodgers. They were designed to allow McCourt to reap as much money as possible from the sale of the team, the people said.
The auction, which will be overseen by the US Bankruptcy Court in Delaware over the next several months, is expected to fetch offers of more than $1 billion for the team and its related assets.
The plan, which the parties are expected to submit to the bankruptcy court in coming days, is likely to attract fierce opposition from News Corp.'s FOX unit, whose Prime Ticket regional sports network owns the local-media rights to the Dodgers through 2013. News Corp. also owns The Wall Street Journal and NewsCore.
According to FOX executives, Prime Ticket holds the exclusive right through November 2012 to negotiate a new local-media deal with the team.
"We fully support a change in ownership of the Dodgers," a FOX spokesman said in a statement. "In that process, FOX has rights that cannot be violated, as MLB has stated. We have rights that we negotiated and paid for. We will take all necessary steps to aggressively protect and defend those rights."
As is true for every baseball team in a major market, the Dodgers' local-media rights are its most valuable asset. The Dodgers now get roughly $37 million a year from the deal with Prime Ticket. Earlier this year, FOX offered McCourt a 17-year extension of their deal, valued at $2.7 billion. The offer, which MLB vetoed, included a 35 percent stake in Prime Ticket.
In the auction, McCourt and his advisers at Blackstone Group, which is managing the Dodgers sale, will solicit separate bids for the team and its media rights, and then will try to arrange partnerships between the highest bidders for each before a final deal is struck. If they prefer, bidders also will be allowed to submit a combined offer for both the team and its media rights.
The goal is to attract the widest range of bidders possible -- from wealthy people who have dreamed of owning a baseball team, to investment banks and private-equity firms looking for an opportunity to launch a regional sports network in Los Angeles, the country's second largest market. It also might induce FOX, which would prefer not to compete with a future Dodgers-owned regional sports network, to offer a more lucrative deal to potential bidders.