Fox maneuvers to stay in Prime position

Barely an afterthought for most of a tumultuous period for the divorce-addled Los Angeles Dodgers, the baseball team’s TV future has become a hotly contested issue of late.

The Dodgers’ contract with Fox ends following the 2013 season, and the network’s Prime Ticket cable subsidiary faces a potential fight to keep the broadcast rights.

Court filings related to the divorce of Frank and Jamie McCourt revealed that the club planned to debut a Dodgers-centric regional sports network beginning in 2014. According to the Dodgers’ projections, such a network would generate $150 million annually. An extension of the Fox deal would bring in less than half that figure, the same filings suggest.

It has also been speculated that Time Warner might seek to add Dodgers broadcasts to its new 20-year deal with the Los Angeles Lakers, which calls for dedicated English- and Spanish-language networks. After losing Lakers rights to Time Warner, the prospect of also being aced out of the flagship baseball team in the nation’s second-largest market would add insult to injury for Fox.

Facing the threat of either a Dodgers-owned regional sports network or a potential juggernaut carrying broadcasts of both the Dodgers and Lakers, Fox moved aggressively to secure its hold on Dodgers broadcast rights during a harrowing time for the club’s ownership.

In January, Fox offered Frank McCourt (widely thought to have severe liquidity issues stemming from his divorce) an advance on the existing Prime Ticket deal to help cover operating expenses. More dramatically, according to a February report in the Los Angeles Times, Fox agreed to loan the Dodgers an additional $200 million — taking 2014-17 broadcast rights as collateral — but Major League Baseball refused to allow the deal.

Under this shelved plan, if the Dodgers failed to repay the loan, Fox would have had the option of paying the club just $50 million per year to broadcast its games. By contrast, Fox will pay an average of $80 million per season to the smaller-market Texas Rangers over the duration of a 20-year deal agreed to last year.

Jamie McCourt would be quick to seek court intervention should she feel the long-term value of the couple’s primary asset is being threatened.

“Obviously, she’s going to want to be interested in anything that might diminish the value of the franchise at sale,” says Daniel Lazaroff, director of the Loyola Law Sports Institute, who adds that pledging the broadcast rights as security for a loan essentially encumbers a contested asset in the divorce.

It could be that MLB’s refusal of Fox’s proposed life preserver to the Dodgers actually bodes well for the network’s long-term chances of keeping the Dodgers. It’s harder and harder to envision a scenario at this point in which a McCourt would have the cash to invest in a brand new network — though if new owners come in, anything’s possible.

Though Fox might be safe from the threat of a Dodgers-owned channel, Time Warner’s new Lakers-centric network poses a potential bidder for the 2014-and-beyond Dodgers broadcast rights. (Still, Fox possesses the inherent advantage of familiarity and established infrastructure.)

The rights to televise Dodgers games have always been at the center of the curious relationship between Fox and the club. A subsidiary of Rupert Murdoch’s vast News Corp., Fox in 1997 forked over $311 million to buy the Dodgers, partly as a source of programming and partly to keep the team away from Disney and its ESPN brand.

Growing tired of losses on the field and in the ledger, Fox sold the Dodgers to the eager but cash-strapped McCourts during the 2003-04 offseason. It put up nearly $200 million in seller financing, in addition to $50 million more in rebates designed to help McCourt ownership gain its sea legs.

Fox kept the club’s broadcast rights — all it ever really wanted.

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