Baseball / Sports

Judge rules in favor of Orioles in dispute with Nationals over MASN

NEW YORK -- A judge ruled Monday that Major League Baseball can't immediately compel an Orioles-controlled TV network to pay tens of millions of dollars a year to the Washington Nationals for the rights to show their games.

MASN -- which is owned 85 percent by the Orioles and 15 percent by the Nationals -- won't have to immediately pay the increased rights fees ordered on June 30 by a panel of three major-league owners. An injunction would also block the Nationals from terminating MASN's license to broadcast their games while the dispute continues.

New York Supreme Court Judge Lawrence Marks granted the request of the Orioles and the Mid-Atlantic Sports Network to extend his Aug. 7 temporary restraining order blocking the decision.

Marks said MASN successfully raised question of whether MLB arbitrators were truly neutral in deciding TV rights fees for Nationals.

The baseball panel -- which arbitrated because the neighboring clubs could not agree -- said the market dictates that the Nationals should receive about $60 million per year. Since MASN now pays $40 million annually, the network would owe the Washington team about $20 million for 2014 by the end of the year.

The $20 million would come out of the network's profits, and MASN attorneys told the court Monday that it would have serious difficulty paying, at least right away.

Because of its high expenses incurred during the season, "this is the worst time of year for MASN," MASN attorney Arnold Weiner told the court. "We have $3.5 million in the bank."

But Nationals' attorney Stephen Neuwirth called MASN's claims "frankly outlandish."

"These are very wealthy baseball teams," Neuwirth told Marks. "To suddenly say they don't have money is another example of the ground shifting."

In July, MASN and the Orioles also filed a claim with the American Arbitration Association seeking at least $800 million in damages. The club argued that Major League Baseball breached a previous agreement by using the wrong methodology to establish the rights fees MASN must pay.

Weiner also argued Monday that the same outside counsel -- New York-based Proskauer Rose -- represented the Nationals, Major League Baseball and the three teams whose owners made up the arbitration panel. "Even as of today there has been no affirmative disclosure of what these relationships were," Weiner said.

Neuwirth countered that important information about the relationships was public. "We don't believe first that there was non-disclosure," he said. "They 1/8MASN3/8 decided to proceed with the arbitration."

Procedures for determining rights fees were brokered by baseball when the Nationals, formerly the Montreal Expos, arrived in 2005.

A 2005 agreement was weighted toward the Orioles -- giving the team a bigger ownership stake in MASN and a proportionately larger share of the profits -- after the team argued that the Nationals' arrival into the region deprived Baltimore of a third of its market share.

The Nationals' share of MASN and its profits will climb by 1 percentage point a year up to 33 percent.

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