The latest showdown in the court case embroiling the Orioles, Nationals, MASN, and MLB takes place on Monday in New York. Judge Lawrence Marks will hear arguments from all parties about whether or not the MASN side of the case will be able to compel MLB to provide documents and e-mails to become evidence in the proceedings.
Up until now, the judge has issued a ruling on each motion the day he has heard the arguments. If that continues today, we'll soon know whether or not the Orioles will have additional ammunition in their case against MLB thanks to the process of discovery. The actual trial is currently set for March, although the discovery process may push things towards a settlement before that.
Standard reminder: The plaintiff in the court case is actually TCR Sports Broadcasting, which does business as the Mid-Atlantic Sports Network; the Orioles (that is, the Baltimore Orioles Limited Partnership) own the supermajority stake in MASN as a result of the Settlement Agreement that brought the Expos to the District of Columbia.
MASN's goal in this case is to get a new arbitration hearing concerning rights fees paid to the Orioles and Nationals for 2012-2016. Yes, it will be 2015 before they finish dealing with this issue. The hearing in front of MLB's Revenue Sharing Definitions Committee (RSDC) took place all the way back in April 2012.
That panel, consisting of a representative from each of the Rays, Pirates, and Mets, determined that MASN would have to pay the Nationals about $24 million more per year than they have been. This would apply retroactively to past years as well. The end result is that MASN would also owe about $70 million for past years.
If the Orioles assume a percentage of that payment equal to their stake in the network (85%), they'll be on the hook for $60 million. The extra $24 million per year that would be paid to the Nationals based on the RSDC decision essentially comes out of the MASN profit stream, which currently flows largely to the Orioles. MASN has posted a $20 million bond with the court for the difference between what MASN has paid the Nationals for 2014 rights fees and what the RSDC said they should be paid.
Where will the rest of the money come from for the prior years, if necessary? That's a great question. I have to figure they have planned for that contingency. The president of MASN is John Angelos, so you figure there is plenty of communication between MASN and the Orioles ownership. Whatever has to be done, it shouldn't catch the Orioles off guard.
The RSDC's ruling was issued in June of this year, well over two years after the hearing. In the intervening time, there were numerous attempts brokered by Commissioner Bud Selig to resolve the issue without things getting ugly. This included some exploration into whether a larger sports network such as Fox or Comcast might buy out either the Orioles or Nationals' rights from MASN. These resulted in no change to the status quo.
Whatever happens in the court case, the Orioles and Nationals will have to gear up to do all of this again starting with the 2017 season. The Settlement Agreement calls for the rights fees to be opened up every five years. Commissioner-elect Rob Manfred could end up inheriting this headache.
Manfred is at the center of the MASN request for discovery. They contend that Manfred exerted an undue influence over what was supposed to be an independent panel. Each of the panel members submitted nearly-identical affidavits attesting to their impartiality in ruling the way that they did. MASN seeks documents to prove that Manfred was so involved in the process that it could not have been either independent or fair to the Orioles. Even those affidavits, to MASN, are a sign that they were coached to say whatever MLB wanted them to say.
Initially, MLB contended that Manfred served as "support staff"; pressed in filings by MASN's attorneys, they have since allowed that Manfred acted more in a law clerk-type role. The Orioles aren't any of buying this. I don't blame them.
Another thing that MASN hopes is that the judge will find significance in the fact that the Nationals' outside counsel in front of the RSDC was from a law firm that has represented the league, the teams on the panel, and even family members of one panel member in assorted lawsuits. Some of this was concurrent with the post-RSDC hearing negotiation.
For instance, the very same lawyer who represented the Nationals in front of the panel is the lead counsel for baseball in an ongoing case, Garber v. MLB, that seeks to ban MLB.tv blackouts. The Garber case was filed in May 2012.
Whether MASN's beef with the process rises to the level that the judge will continue to take their side in the case is something we will find out shortly.
One thing that seems apparent surrounding this case is that there aren't any real, lasting hard feelings between MLB and the Orioles. For all that various MASN court filings have spun out conspiracies that MLB secretly promised the Nationals owners, when they purchased the team, that the rights fee process would be rigged in order to make sure the Nats get more money, Peter Angelos supported Manfred for commissioner from the beginning.
If he earnestly believed that Manfred was at the center of such a scheme to cost him tens of millions of dollars per year, would Angelos have still supported him to become the commissioner? Also, recent reports have indicated that Baltimore is the favorite to host the 2016 All-Star Game.
These two things don't suggest that the ground has been scorched between the team and the league. If the outgoing Selig or the incoming Manfred were looking to punish the Orioles for this court case, there would probably not be any reports about the Orioles possibly hosting the All-Star Game.
Things may be a bit more strained between the Orioles and Nationals. The Nationals demanded rights fees from the RSDC that could well have bankrupted MASN. Before needing the RSDC, the Orioles and Nationals were supposed to negotiate. At their first negotiation, the son-in-law of the Nationals owner ripped up the paper presented by MASN and left.
MASN is essentially a loveless arranged marriage between the Orioles and Nationals, one where one partner, the Orioles, profits off of the other by the terms of the marriage contract. It would be a lot easier to be sympathetic to the Nationals ownership about this if they had not knowingly purchased their way into said marriage, possibly with the goal of undermining it all along.
The two sides have been bickering back and forth in legal filings since the suit was first filed in the summer. They will be bickering for a few months more depending on what the judge does or does not allow in terms of discovery. The only real sure thing about this case is that a lot of lawyers are getting some billable hours out of it. Those who appear in court will get a few more of them today.