WILMINGTON, Del. -- A Delaware bankruptcy judge Tuesday denied a request by a Dodger Stadium souvenir vendor to force the Los Angeles Dodgers to decide quickly whether the team will maintain its contract.
Facility Merchandising Inc. argued that before it makes any more royalty payments to the Dodgers for this year and inventory purchases for next season, it needs to know in the next few weeks if the team will keep an exclusive contract with FMI that runs through 2017.
"We invested and negotiated for an eight-year contract," FMI CEO Martin Arenson said.
He said FMI has suffered financially from a steep drop in attendance at Dodger games, which he suggested was attributed in part to attention about team owner Frank McCourt's contentious divorce.
But Dodgers attorney Sidney Levinson said there's no reason for the court to force the team to decide until confirmation of its reorganization plan.
Judge Kevin Gross agreed, suggesting that FMI's unhappiness with its contract is no reason to grant an exception to normal bankruptcy procedures and force the Dodgers' hand.
Under the contract, the Dodgers are entitled to at least $4.5 million a year, including a $500,000 annual installment on a $2.5 million signing bonus, and minimum of $4 million in concession rights through 2014, rising to $4.5 million in the remaining years.
FMI said that having to make the required payments for this season and buy inventory for next season with no certainty of being able to try to recover recent losses in future years poses a significant risk.
"It would put FMI in a very difficult position," FMI attorney Arthur Rosenberg said.
"The last two years have been beyond bad, they've been disastrous," he added.
FMI alleged before the Dodgers filed for bankruptcy protection in June that the team had fraudulently induced it into adding various provisions to the 2009 concession agreement, an original five-year deal that FMI later agreed to extend to eight years.
But the Dodgers argued that FMI is the party that has breached the contract, failing to submit timely monthly sales reports for royalty payments to the team, and refusing to make a June royalty payment of more than $300,000.
"It's FMI, not the debtors, that have breached their obligations under this concession agreement," said Levinson, noting FMI was served with a default notice last month.
Arenson said after the hearing that FMI will try to resolve its differences with the Dodgers.
"I believe that Dodgers fans are genuinely disenchanted," he said.