Late last month the Baltimore Orioles suffered another loss in their long-running dispute with the Washington Nationals over television rights fees.[2] The decision was handed down by the New York Court of Appeals on April 25th, and confirmed an earlier decision of an MLB arbitration panel that the Orioles must pay the Nationals over $100 million in broadcast rights fees from previous seasons.[3]
The conflict between the two teams goes back more than a decade, and stems from a 2005 agreement between the two teams regarding broadcast rights fees. Back in 2005 when the Montreal Expos relocated to Washington and rebranded as the Washington Nationals, they entered what was at the time the Orioles’ exclusive TV broadcast territory. To remedy the situation, the Mid-Atlantic Sports Network (MASN) was created to broadcast both teams games in the Mid-Atlantic region. However, Baltimore got the far better deal at the time and received a 90% majority stake in the network at it’s inception. Under the terms of the agreement, the Nationals were supposed to receive a higher share of the fees over time. However, the Orioles resisted paying the increased fees to the Nationals after negotiations in 2011, and in 2012 the Nationals brought the dispute before the MLB’s Revenue Sharing Definitions Committee (RSDC). In 2014, the RSDC arbitration committee of baseball executives appointed by the Major League Baseball commissioner said the value of the broadcast rights fees for the Nationals should be set at $297 million total from 2012 through 2016. In 2015 the New York Supreme Court ruled that the original RSDC decision be thrown out, but in 2017 the New York Supreme Court Appellate Division voted to send the case back before the RSDC. In 2019 the RSDC once again found for the Nationals, but this time decided that the Orioles owe the nationals only $105 million in additional rights fees.[4]
The Orioles appealed this decision and argued that the arbitration process used was tainted and that the case should be decided by a different forum, but the Court of Appeals last month decided otherwise. In her 6-0 majority opinion, Judge Madeline Singas stated that “The parties agreed to an industry insider-controlled process with a full understanding of the commissioner’s involvement,” and that “MASN and the Orioles cannot now complain that they received something different than what they bargained for through the insider process they selected.”[5]
Judge Singas further wrote that “While it is unfortunate that our decision may send this protracted litigation into extra innings, that result is necessitated by the settlement agreement’s terms.”[6] The ruling, however, did not require the Orioles or MASN to pay up the required fees immediately, but rather to follow the terms of the negotiation initially laid out in the settlement agreement between the two teams in 2005.[7]
The ongoing dispute between the teams has halted a potential sale of the Nationals that first took shape in April 2022, when Ted Leonsis, owner of the Washington Capitals, Wizards, and Mystics, bid $2 billion for the franchise.[8] The inability of the Nationals to fully profit from their local TV rights has made it much more difficult to complete the sale. MLB Commissioner Rob Manfred put it best by saying, “Look, you would think I was not too bright if I said uncertainty as to your media space [wouldn’t] affect the sale.”[9]
[1] Photograph: https://frontofficesports.com/orioles-dealt-another-loss-in-rights-dispute/
[2] https://apnews.com/article/nationals-orioles-masn-tv-fees-b941c69715bbe30e6a6ab60e51ec0bf6
[3] Id.
[4] https://www.nbcsports.com/washington/nationals/timeline-never-ending-nationals-orioles-masn-dispute
[5] https://apnews.com/article/nationals-orioles-masn-tv-fees-b941c69715bbe30e6a6ab60e51ec0bf6
[6] https://frontofficesports.com/orioles-dealt-another-loss-in-rights-dispute/
[7] Id.
[8] Id.
[9] https://apnews.com/article/nationals-orioles-masn-tv-fees-b941c69715bbe30e6a6ab60e51ec0bf6
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