(Reuters) - Fox Sports asked a bankruptcy court late Friday to dismiss the Los Angeles Dodgers’ bankruptcy cases, saying they “fail the test of good faith” and are nothing more than an attempt to extract more money from deals to the baseball club’s telecast rights.
In a motion to dismiss the Dodgers’ Chapter 11 bankruptcy in Delaware, Fox, which broadcasts Dodgers games, said that it was time for club owner Frank McCourt to “stand down” and dismiss the bankruptcy proceedings after having reached a settlement earlier this month with Major League Baseball over control of the team and agreeing to sell the Dodgers.
Instead of exiting bankruptcy after striking the deal, McCourt is now using the process as “a contract avoidance device” to help it escape old deals and strike lucrative new ones, Fox alleged in its motion.
“(I) is now clear…that there was never a valid bankruptcy purpose for these cases,” Fox Sports wrote in its motion. “From the outset, these bankruptcy cases have been an elaborate contrivance by a desperate McCourt, who needs to generate more cash to fund his divorce settlement, lifestyle and other personal obligations.”
A spokesman for the Dodgers called the motion “an act of utter desperation by Fox.”
As part of its settlement earlier this month with McCourt, MLB agreed to drop its opposition to the team’s plan to sell future media rights, a source told Reuters.
But in order to sell the media rights to games beginning in 2014, the team plans to alter an exclusive negotiating period with Fox, operating as Prime Ticket. Fox opposes these changes, saying in a court filing late Wednesday that they were intended to “transfer additional economic value” to McCourt.
Fox has also accused the team of contacting other potential bidders for the media rights, violating Fox’s exclusive negotiating right.
Fox, a division of News Cor (NWSA.O)p, asked the court to postpone a hearing on the Dodgers’ media rights request until it considers the request to end the bankruptcy. In Friday’s filing, Fox said Prime Tickets remains “ready, willing and able” to perform under its current telecast agreement with the Dodgers.
The Dodgers filed for bankruptcy in June after the MLB commissioner, Bud Selig, rejected the team’s proposal to sell the rights to broadcast its games for $3 billion.
While McCourt and Selig have agreed to a settlement, they have not said how they plan to sell the team in a way that satisfies both sides.
The bankruptcy case is In re:Los Angeles Dodgers LLC, U.S. Bankruptcy Court, District of Delaware, No.11-12010.
Reporting by Jessica Dye in New York; additional reporting by Tom Hals in Wilmington, Delaware