Orioles-Nationals MASN Dispute: Judge issues injunction preventing MLB from enforcing arbitration ruling

After a Monday hearing in a New York court over the dispute over MASN rights fees, the judge issued an injunction preventing baseball from taking any action to compel MASN to pay the Nationals additional rights fees. That injunction will be in place pending a full trial in the case.

This is still not a permanent victory for the Orioles, who would stand to lose tens of millions of dollars in yearly revenue if the MLB arbitration is forced upon them. However, it is unambiguously a victory for the O's and a defeat for the Nationals.

The Baltimore Sun's Jeff Barker was in New York to report on the hearing and ruling:

Judge: MASN successfully raised question of whether MLB arbitrators were truly neutral in deciding TV rights fees for Nationals

— Jeff Barker (@sunjeffbarker) August 18, 2014

MASN argued that the panel was not neutral in three ways. First, two of the members of the panel - the Rays and Pirates - would stand to gain financially from the arbitration's ruling. Second, the firm representing the Nationals, Proskauer Rose, had represented MLB and all three clubs on the arbitration panel in the past. Third, MLB itself, under whose auspices the arbitration took place, had a direct financial stake in the proceedings, given that it loaned the Nationals at least $25 million that was potentially expected to be paid back by anticipated extra rights fees.

The Nationals had been attempting to force MASN to pay $15 million immediately, with another $5 million by September 1. They were also seeking to terminate MASN's license to broadcast Nationals games. The judge has barred the Nationals from taking any such action while the TV rights fee dispute is resolved in court.

With the case now going to trial without MLB having the ability to force MASN to pay money, the leverage in the case may have swung into the Orioles corner for one key reason: Baseball is widely believed to not want any financial information in open court, which would occur in this case. If they're serious about preventing that, it may now be in their best interest to settle with the Orioles to get them to stop making noise about it - not unlike the agreement that allowed the Nationals into Orioles territory to begin with.

Another reporter at the hearing, the Sports Business Journal's Eric Fisher, elaborated on why it was a big victory for the O's:

In other words, MASN scored a big legal victory not even using today all of its argumentative ammo spelled out in its prior filings

— Eric Fisher (@EricFisherSBJ) August 18, 2014

He noted that MASN spent more time arguing the potential legal conflicts of interest rather than any of the monetary issues with the revenue sharing pool, and that the judge seemed to mostly issue the injunction due to the tangled relationships between Proskauer Rose and MLB and the panel members.

Barker reported that the judge accepted an offer from MASN to put up a bond of $20 million so that, should the rights fee dispute go against them in subsequent proceedings, that money is guaranteed to be paid to the Nationals. So if they win, they will get paid, but the Nats can't force any action in the meantime.