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Fox Sports and Dodgers reach settlement

Cabler's rights deal maintained as sale of team draws near

Fox Sports and the Los Angeles Dodgers have settled their legal differences, enabling Fox to retain exclusive cable rights to the Dodgers for the remaining two seasons of their contract and removing the final impediment to the sale of the baseball franchise.

The settlement comes 2 1/2 weeks after Fox earned a favorable ruling from a U.S. District Court, overturning a federal bankruptcy court decision that would have accelerated the sale of the Dodgers’ post-2013 cable rights.

”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.”

Fox will now have an exclusive window to negotiate for a rights extension with the Dodgers through Nov. 30, well past the sale of the team by Dodger owner Frank McCourt that has a stipulated April 30 deadline.

”This agreement is a significant step towards a successful sale of the Los Angeles Dodgers,” the bankrupt baseball team said in its 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.”

Given the extreme rise in sports rights valuations, those of the Dodgers are expected to go for $150 million to $200 million per year on average over 20 years.

The new owners can lock up a deal with Fox before next winter, or they can wait things out and try to create a bidding war between Fox and Time Warner Cable. Both media companies have a pressing need for the Dodgers in the wake of Time Warner Cable nabbing the rights to the Los Angeles Lakers from Fox, effective next NBA season, to create new dedicated English- and Spanish-language cable sports networks.

That being said, Tuesday’s settlement might increase speculation that Time Warner Cable itself will try to purchase the Dodgers, though whether they want to burden themselves with the high cost of operating the franchise remains to be seen. Fox has said categorically it is not interested in reacquiring the Dodgers, which it sold to the McCourt family eight years ago this month.

The Los Angeles Times reported that Fox has retained the right to challenge the sale of any portion of the team to Time Warner Cable, per a provision in the current Fox-Dodgers rights agreement that was designed to ward off another network creating or co-creating a rival Dodger cable channel. That could lead to another legal skirmish down the road, this one between the media giants, centered on whether Time Warner Cable’s new networks fit that definition.

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