The Dodgers filed papers on December 15th in bankruptcy court that contend that there is no damage to FOX should they breach FOX’s licensing contract to broadcast games through 2013. Earlier this month, the judge sided with the Dodgers allowing them to sell the television rights early and overruled the objection by FOX that the Dodgers could not negotiate with any other broadcasting entity before October 2012.
FOX feels that there is $1 billion in damages, but in the filing the Dodgers outline the reasons for their argument that there is no basis for damages. They feel that the amount of damages that FOX is trying to estimate is too speculative. The Dodgers say that FOX would not conclusively win a contract extension if they had exclusive negotiations until October 2012, and this exclusive negotiation period is not enforceable during bankruptcy.
The judge will determine at a February 8, 2012 hearing if there are any damages and what amount they may be.
FOX also has a motion to dismiss the Dodgers bankruptcy case to be heard on December 27th.
Bid Books containing confidential financial information also went out today to perspective buyers. It showed that the bankrupt team had a very small operating profit before taxes, but suffered significant net loss in 2011 after paying debts and other non-cash charges. This will probably make it unrealistic for the team to be sold for the $1 billion amount McCourt is looking for.