Orioles owe Nationals $55 million-$60 million in fees from MASN, MLB panel ruled

Arnold Weiner
Arnold Weiner, shown in 2010, will represent the Orioles in a Monday hearing on the dispute with the Nationals. (Robb Carr/Associated Press)

Major League Baseball’s arbitration panel determined in its June 30 ruling that the Orioles owe the Nationals roughly $55 million-$60 million in rights fees from the Mid-Atlantic Sports Network, a figure closer to the Orioles’ proposal than what the Nationals asked for, according to court papers filed late Wednesday night that marked the latest chapter in the contentious, ongoing dispute.

The Orioles have challenged the ruling in court on the grounds that it would render MASN virtually insolvent and that the process used by MLB was corrupted. In the court papers filed late Wednesday night arguing for a preliminary injunction to be thrown out, the Nationals pushed back against the Orioles’ arguments, saying the Orioles’ claimed victimhood “verges on the nonsensical.”

In their argument, without directly stating the figure, the Nationals suggested baseball’s arbitration panel, part of the league’s Revenue Sharing Definitions Committee (RSDC), awarded them roughly $55 million-$60 million in rights fees. The Nationals were asking for between $100 million and $110 million. The Orioles wanted to give them $35 million. In the Nationals’ filing, they stated the arbitration panel’s award was “over $38 million closer to what MASN proposed than what the Nationals asked for.”

The key excerpt:

“MASN asserts that the RSDC purportedly was biased in favor of the Nationals, but that assertion cannot be reconciled with the fact that the fair market value of the Nationals’ telecast rights as awarded by the RSDC is on average $58.4 million less per year than the amount requested by the Nationals during the RSDC proceeding – while, at the same time, only $20.1 million more per year on average than the amount MASN advocated. In other words, contrary to any bias in favor of the Nationals, the RSDC award is over $38 million closer to what MASN proposed than what the Nationals proposed.”

The Orioles would contend that the amount awarded matters less than the method used, which they assert did not conform with industry standards.  The Nationals also attacked that assertion, made in a series of court filings, that MLB’s ruling should be vacated based on the method used to determine the rights fee award. The Orioles and MASN based their proposal on a formula used by firm Bortz Media & Sports Group, which baseball has frequently employed. The Nationals insisted it doesn’t matter because an arbitration decision should be binding.

“To the extent that MASN argued that the RSDC should have used the so-called ‘Bortz’ methodology, the RSDC explained in its decision that it had considered the Bortz methodology as advocated by MASN and determined that it is inconsistent with the RSDC’s established methodology.  Any dissatisfaction by MASN with how the RSDC applied its established  methodology is not a satisfactory basis for challenging the RSDC’s arbitration decision. As the U.S. Supreme Court has instructed in applying the Federal Arbitration Act invoked here by MASN, ‘It is not enough for petitioners to show that the panel committed an error – or even a serious error.’ ”

The Nationals also argued that MLB’s ruling provides no existential threat to MASN. The Nationals have attempted to terminate MASN’s license to broadcast Nationals games in response to the Orioles’ refusal to pay the Nationals’ the sum MLB’s panel determined. But the Nationals say if the Orioles complied with the ruling, then it would eliminate their notice of termination. The Nationals’ filing said the Orioles would need only to pay $15 million now and $5 million on Sept. 1.

The Nationals also attempted to invalidate the Orioles’ claims that payments made to the Nationals – reportedly a sum of $25 million – corrupted the panel’s decision. The Nationals said MASN and the Orioles were aware of the payments in the fall of 2013.

The Orioles have raised issue with the Nationals’ legal representation, Proskauer Rose. The firm has represented MLB and many MLB teams in the past. In an affidavit filed Wednesday night, the Orioles revealed a series of e-mails in which they raised concerns about a conflict of interest and objected to the firm’s involvement as far back as January 2012, noting in one that it “is axiomatic that a lawyer cannot represent a client before a tribunal wherein the lawyer also represents the judge and jury.”

In another court document filed Wednesday night, MASN and the Orioles argued to keep the injunction in place based on “pervasive conflicts of interest, intolerable self-dealing and fraud that thoroughly infected and completely undermined any semblance of the fair and objective arbitral process.”

The Nationals said in their filing that the Orioles’ argument about Proskauer “verges on the disingenuous” and said Proskauer’s role “provides no ground to reverse” the arbitration panel’s decision.

The next case step in the case will come Monday in a hearing to determine whether the preliminary injunction stays or goes. Currently, the New York Supreme Court has ruled the Nationals and MLB, at least temporarily, cannot take further action against the Orioles and MASN.

Arguing for the Nationals will be Brendan Sullivan, the high-powered attorney who represented Oliver North after the Iran-Contra scandal.  The Orioles have retained high-profile attorney Arnold Weiner, who has represented them in previous cases pertaining to MASN.

Adam Kilgore covers national sports for the Washington Post. Previously he served as the Post's Washington Nationals beat writer from 2010 to 2014.
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Adam Kilgore · August 14

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