clock menu more-arrow no yes mobile

Filed under:

Next phase of Orioles, Nationals dispute over MASN under way as MASN appeals decision it won

The winding saga over the Orioles and Nationals rights fees from MASN enters its next phase as the case is appealed. It was the MASN/Orioles side of the case to appeal even though they were winners in the recent trial. It's complicated.

It must be a strange court case where the side who wins the initial decision is the one to initiate an appeal. That's where the MASN case arguing over rights fees paid to the Orioles and Nationals stands as of Friday as it turns out that it's the MASN side of the case, who, despite being the winning party in last month's decision, will be pursuing further legal remedies.

A brief reminder: The case is, technically, between TCR Sports Broadcasting, LLP (the entity that runs MASN) against a host of other entities including WN Partner, LLC (the entity that owns the Nationals) and the Office of the Commissioner of Major League Baseball. You've also got the Baltimore Orioles Limited Partnership (the entity that owns the Orioles) which is involved in the case since it is the managing partner of TCR Sports.

For simplicity's sake, the MASN side of the case will be used interchangeably with the Orioles. It has been safe to say throughout this whole saga that the interests of MASN are lined up with the interests of the Orioles. If MASN is required to pay more money to the Nationals, that hurts its profit margin. Those profits are currently enjoyed mostly by the Orioles, who own an 84% stake in MASN.

So, if the Orioles were victorious in court the last time around, why does it still drag on? The reason for that is that while the Orioles were the winners in that the Honorable Lawrence K. Marks, who presided over the case, agreed that the decision issued by the MLB-controlled RSDC should be vacated - a rare finding for a court - they didn't win enough to resolve the issue.

Marks declined to order the whole matter to an independent arbitration panel, instead suggesting that the Nationals could just use a different law firm and then the parties could argue in front of the RSDC again. The Nationals use of a law firm that had many other concurrent ties to both the league and the specific teams represented on the panel was the basis for Marks to throw the whole thing out.

Though Marks ruled that MLB "objectively demonstrate(d) an utter lack of concern for fairness of the proceeding," he also wrote that ordering an independent arbitration was beyond his authority.

A new RSDC, much like the old RSDC

You can see why the Orioles aren't interested in just walking back into that RSDC panel. Although its members are now different than three years ago, when the decision was initially reached, all of those members were appointed by Commissioner Rob Manfred, who oversaw the initial RSDC hearing in his previous job for MLB and under whose umbrella a new hearing would ultimately be conducted.

Unless the Nationals agree to an independent arbitration hearing, which, since they already know the outcome is essentially pre-determined to be favorable to them, they have no incentive to do, the whole thing will end up back in front of the RSDC. Unless a judge agrees the matter must go to an independent panel, the RSDC is still the avenue for disputes according to the contract.

The Orioles appeal of the judge's decision is predicated on that very reality. Can they possibly get a fair re-hearing in front of the same entity that issued a biased decision against them before? Manfred has made public statements that would seem to show that any future hearing would be prejudiced against the Orioles. It's one thing to believe you're getting screwed, of course, and another thing entirely to prove it in a court of law, but that's what they'll now try to do.

In addition to arguing that the judge possessed, and should have exercised, the authority to order an independent arbitration hearing, the Orioles have also taken the opportunity in their appeal to re-argue a couple of their previous claims that Marks rejected.

The appeal also argues "erroneous factual findings" on two key issues: The judge discounted the importance of a $25 million loan MLB extended to the Nationals during this process, expecting that either the RSDC award or a hypothesized sale of MASN to a company like Comcast would allow that loan to be recouped. The second issue is that the judge considered MLB's role in the RSDC issuing its award as "procedural support ... akin to a law clerk," which the Orioles have always disputed.

Another chance to convince a court

Again, it's one thing to write it, and another thing to get a court to believe it. What you think and what you can prove are two different concepts. The evidence they presented to Marks was insufficient to get him to rule in their favor on these arguments. But this whole endeavor was viewed as a quixotic long-shot to begin with and the Orioles have managed to keep winning so far, so you never know. The attorneys for the Orioles team now know what arguments need to be sharpened.

Could MLB's involvement throughout this court case be enough for a higher court to agree there's no possible fair hearing for the Orioles in front of the RSDC? That's what the Orioles are hoping. The Orioles are either very confident that an independent panel would rule in their favor, or they'd simply be willing to accept a less favorable ruling as long as it's not baseball forcing it upon them.

Eric Fisher, a baseball-focused writer for the Sports Business Journal, noted that this appeal process could drag the case out for another year or more as it heads to a higher court. In some ways, every day they aren't required to pay the Nationals is a win for the Orioles. Not that the Nationals seem to be hurting without all of this MASN money to begin with, since they signed a $200 million man last year and made another $200 million offer to a free agent this year - but that's neither here nor there.

One final thing to remember. All of this arguing is over a difference of about $100 million in MASN rights fees for the 2012-2016 seasons. The two sides have to turn around and negotiate over all of this yet again for the five year period starting in 2017. This case might not even be decided by then, so you can imagine another round of fighting awaits. Maybe the real winners are everybody's lawyers.