MLB’s Civil War: An $800 Million TV Dispute Heats Up

By ERIQ GARDNER | August 7, 2012 | The Hollywood Reporter

On July 29, The Hollywood Reporter broke news about bombshell litigation between the Baltimore Orioles, the Washington Nationals and Major League Baseball over TV money. New information has surfaced as part of a broadcaster’s emergency motion for injunctive relief to prevent the Nationals from terminating baseball game telecast rights.

To quickly review what happened prior to Thursday’s intervention by a New York judge, when the Montreal Expos became the Washington Nationals in 2005, Baltimore Orioles owner Peter Angelos was upset by the prospect of potentially losing market share to another team in his region. So a deal was worked out whereby the Orioles would hold a majority partnership profit interest in Mid-Atlantic Sports Network (MASN), which would get to telecast Nationals games at a substantial discount from 2005 to 2011. After that, MASN would be obligated to pay the Nationals “fair market value.”

The parties went to arbitration to determine that “fair market value.” According to documents that have recently surfaced, the Nationals demanded $118 million a year from 2012 to 2016. The Orioles-controlled broadcaster thought fees starting at $34 million and rising to $45.7 million were more appropriate. On June 30, an MLB committee privately adjudicating the dispute issued a decision favoring the Nationals.

The broadcaster refused to pay, though, leading the Nationals to send notice of default, and MLB commissioner Bud Selig to threaten to “impose the strongest sanctions available” if the parties went to court. Despite the warnings, the teams and their broadcasters filed papers in New York state court. The MLB was one of the named respondents. The court action came after the Orioles told MLB they would be seeking no less than $800 million in lost asset value, according to a letter obtained by THR.

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