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Morris Nichols Helps Fox Sports to Successful Outcome in Dodgers Bankruptcy

Wilmington, DE (January 20, 2012) - Partnering with litigation counsel Jenner & Block LLP, bankruptcy attorneys from Morris Nichols helped preserve valuable media rights held by News Corporation’s Fox Sports Net West 2, LLC (“Prime Ticket”) in the face of challenges by the bankrupt Los Angeles Dodgers. 

Prior to filing bankruptcy in June 2011, the Dodgers entered into a long-term telecast agreement with Prime Ticket, an operator of a west-coast based regional sports network, which granted Prime Ticket the exclusive right to telecast Dodgers’ regular season baseball games through the end of the 2013 season. The contract also gave Prime Ticket certain exclusivity and matching rights (known as “back end rights”) to facilitate Prime Ticket’s ability to negotiate a renewal of the telecast rights agreement upon expiration of the initial term.

In November 2011, however, the Dodgers embarked on a process to sell the team pursuant to a settlement reached among the Dodgers, their owner Frank McCourt and Major League Baseball. In connection with this sale process, the Dodgers sought to extinguish Prime Ticket’s back end rights to allow the Dodgers to immediately begin marketing future media rights to parties other than Prime Ticket. 

Although the bankruptcy court initially granted relief to the Dodgers, Prime Ticket immediately appealed the ruling and obtained a stay from the district court.  In a strongly worded opinion accompanying the stay order, the district court judge indicated that there was a significant likelihood that Prime Ticket would prevail on appeal.  The district court also granted Prime Ticket’s request to expedite its appeal.

After completion of briefing on the merits of the appeal and just days before oral argument, the Dodgers and Prime Ticket reached a settlement, which left Prime Ticket’s telecast and back end rights intact.  As part of the settlement, the Dodgers agreed to cease all attempts to impair Prime Ticket’s back end rights and to immediately assume Prime Ticket’s telecast agreement.

The Morris Nichols team included Robert J. Dehney, Gregory W. Werkheiser and Andrew R. Remming.  Mr. Werkheiser argued for Prime Ticket in proceedings before the United States Bankruptcy Court for the District of Delaware and appeared for Prime Ticket in proceedings before the United States District Court for the District of Delaware.