Correction: An earlier version of this article misspelled the last name of Joseph Leccese, the chairman of the Proskauer Rose law firm. This version has been corrected.
As Commissioner of Baseball Bud Selig continues to push for an agreement outside the courts, the legal dispute over MASN rights fees between the Baltimore Orioles and Washington Nationals will take another small step Wednesday.
Last week, a New York Supreme Court judge ordered a preliminary injunction against the Nationals and MLB, ruling they could not take any action against MASN nor the Orioles until further notice. On Monday, there will be another hearing to decide whether to continue the injunction.
By midnight Wednesday, the Nationals, Orioles and MLB each will file legal papers. The Orioles will argue the injunction should stay. MLB and the Nationals will argue it should be lifted and therefore make it possible for the Nationals to try to revoke MASN’s right to broadcast their games.
The basis for the Orioles’ argument likely can be found in affidavits obtained by The Post. In one of them, MASN Executive Vice President Michael Haley lays out the Orioles’ primary case: The MLB arbitration panel that ruled in favor of the Nationals did not use the same formula typically applied to determining rights fees.
The “established methodology,” Haley wrote, is the one derived by Bortz Media & Sports Group Inc., which developed a model to value rights fees for MLB’s revenue sharing committee.
In the original agreement between the Nationals and Orioles, Haley writes, the contract “mandates setting every five years the telecast rights fees for the subsequent five years pursuant to [the revenue sharing committee’s] ‘established methodology for evaluating the fair market value of all other related party telecast agreements in the industry.’ ”
On Jan. 4, 2012, according to the affidavit, Haley and Mark Wyche, who developed the Bortz model for MLB, and their lawyers met with a Nationals contingent that included principal owner Ed Cohen, Lerner Sports COO Alan Gottlieb, Joseph Leccese of the law firm Proskauer Rose and media consultant Chris Bevilacqua.
“The meeting lasted only a few moments,” Haley wrote in the affidavit. “Almost immediately after the Bortz-prepared five-years rights fees [proposal] was handed to the Nationals’ representatives, Cohen made a display of literally ripping the [proposal] into shreds. Cohen stated that the Nationals ‘deserved more and would get more.’ ”
According to the affidavit, Cohen “demanded” the sides use an MLB arbitration panel. MASN’s argument also said MLB had a conflict of interest because Proskauer Rose also had represented MLB in several cases and had specifically represented the Pittsburgh Pirates and Tampa Bay Rays, two of the three teams who had a member on the three-person arbitration panel. Haley wrote that MLB failed to disclose the conflict.
Finally, the affidavit said the Nationals intended to use the MASN saga to dissolve MASN and acquire their rights fees.
“During the RSDC appeal on April 3, 2012, I was present when counsel to the Nationals expressed that the Nationals have been ‘waiting seven years to get our rights back,’ ” Haley wrote. “Having received MASN’s quarterly financials, annual audited settlements and other partnership financial documents, the Nationals were aware that if the Nationals were to receive the telecast rights fees demanded at the hearing, MASN would be rendered immediately insolvent, a fact that the Nationals’ counsel acknowledged. The Orioles would have been severely financially harmed.”
In summary, MASN and the Orioles said the MLB panel willfully ignored the established method of determining rights fees, that the panel had a subjective reason to do so and that the Nationals are willfully trying to kill MASN as an entity to attain their own broadcasting rights.
It sounds as if neither side is close to meeting Selig’s wish for a settlement outside a courtroom.