The Los Angeles Dodgers Major League Baseball franchise will retain more than $6bn (€4.6bn) from their 25-year local rights deal with US broadcaster Time Warner Cable under a “tentative” agreement with the league, according to the Los Angeles Times newspaper.
The settlement between the Dodgers and the league places the overall value of the team’s 25-year contract with Time Warner at about $8.5bn.
In January, Time Warner ousted the Fox Sports division of US network Fox as the Dodgers’ rights-holder in the local market. Under the terms of the agreement between the Dodgers and Fox Sports that expires at the end of the 2012-13 season, Fox pays the Dodgers $39m per year, with the team allocating $13m to the league’s revenue-sharing pool – in line with all major rights deals struck by MLB franchises.
Under the terms of a court settlement between the league and former Dodgers owner Frank McCourt, MLB had agreed that $84m would represent fair-market value for the first year of a new television deal, with the usual 34 per cent allowance set aside for revenue sharing.
However, Guggenheim claimed that any amount above the $84m threshold was not subject to revenue sharing, while the league said that every dollar of guaranteed television revenue was subject to the 34 per cent levy.
Under the tentative settlement, the Times said that the league had agreed that about $130m would represent fair-market value for the first year of the deal, with the Dodgers paying about $44m of this sum into the revenue-sharing pool.
The Dodgers will ultimately have to commit about $2bn towards revenue-sharing under the 25-year term of the TWC contract.
The newspaper said that the settlement would avert a meeting between the Dodgers and MLB in the US Bankruptcy Court and would effectively end the court's jurisdiction over the Dodgers' affairs.
The Guggenheim Baseball Partners investment group acquired the Dodgers out of bankruptcy in April 2012.