Earlier this week, Mid-Atlantic Sports Network (MASN), which is owned by the Baltimore Orioles and Washington Nationals, agreed to pay the Nationals nearly $100 million to resolve the fees the network owes the team from 2012-2016. One item remains, the network and team must resolve the fees owed from 2017-2021.
When Major League Baseball, which owned the Montreal Expos, proposed moving the team to Washington in 2004, Orioles owner Peter Angelos raised concerns over sharing territory with the Nationals. Thus, Major League Baseball reached an agreement with the Orioles to form MASN, giving the Orioles an initial 90 percent stake in the network and the Nationals a 10 percent stake. After two years, the Nationals’ stake would increase by 1 percent each season until the Nationals’ stake reached 33 percent. Initially, the teams would be paid the same rights fees by MASN, which the parties could revisit every five years.
In 2012, the first year the Nationals could renegotiate rights fees, the team argued that they were not paid fair market value from MASN for their rights. After failing to come to an agreement, the Nationals took the issue to arbitration.
The first arbitration in front of Major League Baseball’s Revenue Sharing Definitions Committee (RSDC) failed due to a New York trial court vacating the award due to the RSDC’s failure to address evident partiality. At the time, the law firm representing the Nationals was currently or previously representing Major League Baseball and the teams employing the members of the RSDC. The Orioles requested that the RSDC preclude the firm from the proceedings, but the RSDC declined, and the proceeding continued.
In 2019, a second RSDC panel awarded $105 million to the Nationals. MASN appealed the award to the New York appellate court, arguing that the panel was not impartial and that the dispute required a new forum.
In April, a New York appellate court upheld the $105 million arbitration award, finding that by replacing the panel members, the first proceedings did not taint the second RSDC panel.
To resolve the award, the network has agreed to pay nearly $100 million to the Nationals. Now, MASN and the team must determine the fees owed to the Nationals from 2017-2021. Once finished, the Lerner family may move forward with selling the team.
Landis Barber is an attorney at Safran Law Offices in Raleigh, North Carolina. You can connect with him via LinkedIn or via his blog offthecourtdocket.com. He can be reached on Twitter @Landisbarber.
