The Los Angeles Dodgers sued Fox Sports on Wednesday, accusing the News Corp-owned network of attempting to “interfere with the sale of the Dodgers and their assets in bankruptcy.” The Dodgers’ goal is to sell the team and its valuable TV rights through separate court-sanctioned auctions to maximize returns. In a sharply worded court response filed Wednesday night Fox said it would ask that the Dodgers be dismissed from bankruptcy, according to the LA Times. Fox slammed Major League Baseball as “Prime Ticket’s former ally” and asserted the only reason Frank McCourt wants to auction the team’s TV rights now is to put “value rightfully belonging to Prime Ticket,in his own pocket” — referring to Fox Sports’ package of programming. The Dodgers’ suit was filed in U.S. Bankruptcy Court in Delaware, where Fox already has a suit pending against the team for alleged breach of contract in the continuing squabble over TV rights. Responding to the latest development, the Dodgers called Fox “obviously desperate” to prevent an auction that would reveal the “enormous value” of those rights and “lead to a record-smashing sale price for the team and benefit not just the Dodgers but all of baseball.”
The same court is overseeing the proposed sale of the team, but the sale agreement reached two weeks ago between Dodgers owner Frank McCourt and Major League Baseball has yet to be filed. In an effort to get McCourt the highest sale price, the Dodgers have asked the court for permission to seek separate bids for the TV rights. The Dodgers’ current TV contract forbids the team from negotiating with anyone but Fox Sports Net West through November 30, 2012 — a provision the team has asked the court to declare unenforceable under bankruptcy laws. The Dodgers suit also seeks damages from Fox Sports for its alleged violation of the automatic stay that shields companies in bankruptcy from their creditors. Fox responded earlier Wednesday to the team’s suit in a statement describing it as “the latest chapter in the current owner’s ongoing scheme to avoid honoring his contractual obligations.”
In the team’s filing the Dodgers 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” in response to a letter Fox Sports sent to the investment bank handling the Dodgers sale demanding that it “cease and desist” from claiming it could solicit bids for the team’s TV rights regardless of the current Fox contract. The Dodgers asserted that the letter “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 and media rights for the 2014 season and beyond are going up for sale under a settlement McCourt reached with Major League Baseball under which the league agreed to remain neutral in the fight between the Dodgers and Fox. The creditors committee has voiced concern that any delay in the bankruptcy auctions could jeopardize the sale by opening day next season. The dueling lawsuits further jeopardize that goal.
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