Wednesday, July 06, 2011

NYT on Dodgers: TV Tied At Hip; McCourt Still Slinging Mud

Couple of good articles on the Dodgers from the NYT this holiday weekend. First, a piece on Fox is caught between a McCourt and a hard place:

The fight for control of the Los Angeles Dodgers that reached United States Bankruptcy Court in Delaware on Tuesday pits Frank McCourt, an owner desperate to keep his team, against Commissioner Bud Selig, who believes that McCourt has turned the iconic team into a financial wreck.

But away from the legal battle is the story of a long relationship between the Dodgers and Fox Sports, which underscores the rising value of sports television rights and what a media giant will do to keep them.

In the case of the Dodgers and Fox, it is a tale of mutual self-interest in which each side has taken turns at being the alpha male: the team knows it is valuable but needs money; Fox needs the team and has the cash.

“It’s beyond codependency,” said Lee H. Berke, the president and chief executive of a sports media consulting company.

Fox’s place in the Dodgers’ troubled present is because of its ownership of Prime Ticket, the regional sports network that shows the team’s games on cable television. Last year, Fox advanced McCourt $25 million from the team’s 2011 rights fee. Earlier this year, it agreed to lend McCourt $200 million, but Selig rejected the deal as adding more debt to a team that has too much of it. More recently, Fox angered Selig by skirting his right to approve team loans with a $30 million personal loan to McCourt to help him pay player salaries. [...]

Save for McCourt’s need to secure a new deal with Fox to alleviate his cash crisis, there was no urgency for either side. The current agreement ends in 2013, and the Dodgers could not solicit offers from rival bidders until the end of November 2012, when a 45-day exclusive negotiating period with Fox would end.

But McCourt’s financial crunch came around the same time as the surprise appearance of a new competitor in the Los Angeles market: Time Warner Cable. In February, the cable operator snared Lakers rights from Fox Sports West, Prime’s sister channel, to make the team the centerpiece of two new regional sports networks for 20 years starting in 2012. The deal is worth a reported $3 billion, though the cable company has denied that estimate is accurate.

“Suddenly, Fox is finding itself in a highly competitive marketplace,” said Berke, who added, “Time Warner Cable is a major presence in the L.A. market.”

Fox, a division of News Corporation, is a huge presence in baseball — locally and nationally. Baseball is important, if not critical, to the success of regional sports networks because of the length of its season and the ratings that teams generate. Fox carries 14 major league teams on 15 regional sports networks. But there will be one team fewer on Fox’s roster next season; the Houston Astros will leave Fox’s Houston sports channel in 2013 to join the Houston Rockets and Comcast to form a sports network.

Fox is also M.L.B.’s exclusive national broadcaster. By the time Fox’s current deal ends in two years, it will have paid $4.6 billion since 1996 to show Saturday afternoon games, All-Star Games and the postseason.

I understand that the issue is complex, but I have to think that the influence MLB can exert over Fox for the national deal has to trump whatever Prime Ticket / Fox West has to lose. And if MLB wins out, in theory they could strike a better deal with MLB's auspices, or a new owner, rather than having to scrounge up $385M today (with an amount that doesn't embed the $100M+ that Frank and Jamie want to divert to their personal issues / debts / lifestyles).

The second article is how Frank McCourt, desperate and grasping at straws, is still trying to claw at MLB:

The Los Angeles Dodgers demanded on Tuesday that Major League Baseball turn over documents the team believes will show that baseball’s “abusive” treatment of the team led to its filing for bankruptcy.

M.L.B.’s actions reflected its “scheme to force a liquidity crisis” for the Dodgers, the filing said.

Team lawyers said in a motion filed in federal bankruptcy court in Delaware that M.L.B. had refused to turn over many of the documents they asked for last weekend. The team said the evidence it was seeking would demonstrate M.L.B.’s “bad faith” deaings in denying it the cash it needed to avoid bankruptcy.

Really? Really? I would love to be a fly on the wall in the meetings with Frank McCourt and his lawyers, watching him agree to increasingly desperate hail mary measures, and then watching the lawyers rub their hands together and utter evil laughs behind his back.