Early this morning, Los Angeles Dodgers owner Frank McCourt filed for Chapter 11 bankruptcyin what was his last attempt to keep the team under his ownership.
Sal Galatioto, president of sports investment bank Galatioto Sports Partners, stopped by on CNBC's The Strategy Session today to discuss the recent development.
Galatioto is uniquely positioned to talk about the Dodgers bankruptcy, having been involved in the last two bankruptcy filings in baseball — the Chicago Cubs and the Texas Rangers. Now that the Dodgers are in the hands of the bankruptcy court, Galatioto said there wasn't much guaranteed, other than the fact that it would be more difficult for baseball.
If the court doesn't approve of McCourt's financing plan or of the 17-year, $3 billion television deal, which was initially denied by baseball, Galatioto said it will be relatively easy to find bidders to buy the team, which McCourt bought in 2004. One of the reasons is because it's known that Fox is hungry to do that deal with the Dodgers after Time Warner recently locked up Lakers rights for the next 20 years.
"It will be very difficult to pick it up on the cheap side," Galatioto said.
"Every buyer knows about the media rights deal.
Fox can't afford to lose the Dodgers and needs this TV deal badly.
That is what will drive the price way up because the deal won't go away."
If the team were to be sold immediately, Galatioto said it would be done in a 363 sale, which is an auction that could result in a variety of bidders from different walks of life.
"We can see media people, hedge fund people, and wealthy based people in LA bidding for the team", said Galatioto. "However, McCourt is not a seller right now, he wants to keep the team, reorganize, and get the media deal done".
James Kaminsky is interning with CNBC sports business reporter Darren Rovell for his second season. He can be reached at email@example.com.
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