NEW YORK - The Los Angeles Dodgers and Fox settled their lawsuit late Tuesday night, removing an impediment to the sale of the bankrupt team.
In a motion filed in U.S. Bankruptcy Court in Delaware, the Dodgers said they were abandoning their attempt to sell future media rights and will adhere to their contract with Fox's Prime Ticket subsidiary, which kept intact its exclusive negotiating window from Oct. 15 through Nov. 30 this year.
"This agreement is a significant step towards a successful sale of the Los Angeles Dodgers," the team said in a statement. "It resolves all of the parties' differences relating to the telecast rights agreement with Fox. This consensual resolution of all disputes between the Debtors and Fox will enable the sale of the Dodgers to proceed forward, free of any uncertainty relating to the various issues under dispute, with the continued objective of maximizing value for the Debtors and their estates."
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 media rights for 2014 and beyond 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, which must be approved by the bankruptcy court, 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.
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