The dispute focuses on the original Settlement Agreement (“the contract”) that was signed by the Washington Nationals, Major League Baseball (MLB), the Mid-Atlantic Sports Network (MASN) and the Baltimore Orioles when the Nationals team moved to Washington in 2005. The Nationals and MLB are attempting to deviate from the terms of the contract in order to have a larger share of MASN’s profits.
- Filed 8.18.14 – Latest Affidavit of Mark C. Wyche: Wyche developed the formula used for determining baseball TV rights fees.
- Filed 8.13.14 – Affidavit of Aron U. Raskas (MASN/Baltimore Orioles Attorney) in Support of Motion for Preliminary Injunction
- Filed 8.13.14 – Nominal Respondents’ Memorandum of Law in Support of Petitioner’s Application for Preliminary Injunction
- Filed 8.8.14 – Supporting Affidavit of Mark C. Wyche:
“I [Managing Director of Bortz] have reviewed the decision that the RSDC rendered on June 30, 2014 (‘RDSC Decision’), with respect to the telecast rights fees that the RSDC states that MASN is to pay the Orioles and the Nationals for the 2012 to 2016 five-year period. The decision did not apply to the RSDC’s established methodology applicable to all other related party telecast agreements in the industry. Instead, the RDSC departed from the established methodology and historical precedent, as well as MASN’s financial data, in an attempt to justify those inflated rights fees.”
- Filed 8.8.14 – Supporting Affidavit of Hal J. Singer, Ph.D, Sports Economist
- Filed 8.8.14 – Supporting Declaration of Hal J. Singer, Ph.D, Sports Economist
- Filed 8.8.14 – Supporting Affidavit of Michael J. Haley, MASN CFO and Executive Vice President
- Granted 8.7.14 – Temporary Restraining Order: New York Supreme Court Justice Lawrence Marks ruled on August 7, 2014 that the Washington Nationals cannot take any action to terminate MASN’s license to telecast Nationals games until Marks makes his final ruling.
- Filed 8.7.14 – Petition: This is a pleading seeking to nullify the June 30, 2014 MLB arbitration award due to MLB’s vested interest in a decision in favor of the Nationals.
“The Managing Director of Bortz Media & Sports Group in his affidavit attests that, ‘the cumulative effect of the RSDC’s numerous outside the norm assumptions, cherry picked data and deviations from its established methodology renders the RSDC’s analysis and determination so grossly different from its established methodology applicable to all other related party RSNs in the industry that it completely corrupts the established methodology and the RSDC’s ultimate decision.'”
- Filed 8.7.14 – Petitioner’s Memorandum of Law in Support of its Application for a Temporary Restraining Order
- Filed 8.7.14 – Affirmation in Support of Application for Temporary Restraining Order – Part I
- Filed 8.7.14 – Affirmation in Support of Application for Temporary Restraining Order – Part II
- The Settlement Agreement between the Baltimore Orioles, MASN, MLB, and the Washington Nationals is a binding contract signed by willing parties who fully understood its terms. Both teams benefited from the terms of the Agreement and that’s why they signed it.
- The terms of the Agreement were determined based on a financing formula used and upheld by other baseball franchises on 19 previous occasions in MLB history.
- Prior to the formation of the Nationals, the Orioles provided MLB with financial impact studies evidencing that the harms caused, and to be caused, to the Orioles and television revenues could well exceed $40 to $50 million annually.
- The terms of the Agreement reflect the expected – and realized – financial damage the Orioles suffered when the Nationals entered Baltimore’s once-exclusive market.
- For three decades before the Nationals’ arrival, and at MLB’s urging, the Orioles expended considerable resources to cultivate and grow fan loyalty and commercial support for the Orioles and Baseball throughout the Washington, D.C. area.
- The Orioles franchise has lost 35 percent of its fan base since the Nationals entered the Baltimore-Washington market. The terms of the Agreement partially compensate the Orioles for that loss.
- Orioles had offered to accelerate the Nationals’ equity interest by nearly 17 years, but the Nationals rejected that offer.
- MLB is asking that MASN accept only a five percent profit margin when other Regional Sports Networks enjoy profit margins above 20 percent.
- The Office of the Commissioner is not an independent party in this issue. In fact, MLB has a direct financial stake in supporting the Nationals because it shares in that team’s profits from MASN.
- MASN and the Orioles remain open to negotiating a reasonable settlement. Both parties hope for an amicable resolution to the matter and will do everything in their power to achieve it.
What happened last week?
The Supreme Court of New York agreed with MASN’s contention that MLB’s arbitration award in favor of the Nationals was in Baseball’s own vested interest. MLB, in effect, was attempting to be judge and jury on a contract it created and signed. The judge ruled that the Nationals could not take any action on its television license with MASN until the issue is decided further by the Court.
Why are the Orioles preserving their right to file suit when the two parties agreed to revisit the agreement in 2012?
Per the terms of the contract, the Orioles and the Nationals were entitled to review fair market value using a consistent formula employed my Baseball. Baseball set aside this formula and this was the foundation of the 2005 Settlement Agreement.
Why did the Orioles agree to an arbitration but then object to the ruling of that panel?
The Orioles maintain that the MLB arbitration panel lacked procedural fairness and its decision was biased by Baseball’s financial interest in the matter.
Why isn’t MLB enforcing the contract?
That is an excellent question. MLB is not a neutral party in this issue by virtue of its financial interest in the success of the Nationals, formerly the Montreal Expos. MLB receives 34 cents of every dollar paid to the Nationals.