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SBD/August 8, 2014/Media
Orioles Get Temporary Restraining Order Against MLB, Nats, Selig In MASN Dispute
Published August 8, 2014
MASN on Thursday successfully petitioned to the New York State Supreme Court to obtain a temporary restraining order against MLB, the Nationals and Commissioner Bud Selig to prevent a recent arbitration award for the Nationals in their ongoing TV dispute from taking effect. A hearing on MASN's bid for a permanent injunction to have the award for the Nationals vacated will be heard on Aug. 18 in N.Y. The legal filing and the granting of a temporary injunction brings the long-running battle over the Nationals' local TV rights fees to a heightened stage and directly defies fervent efforts by Selig, who has threatened sanctions against both the Nationals and Orioles, to keep the conflict out of the courts. MASN, majority owned by the Orioles and Owner Peter Angelos, in its filing to the court called the arbitration award for the Nationals the result of a "corrupted and biased process that failed to honor … the substantive and procedural requirements set forth in the arbitration clause in a settlement agreement among the parties." Judge Lawrence Marks also denied a bid by MLB to seal the case, meaning documents from the proceedings will be part of the public record.
RHETORIC HEATING UP: The MASN petition offers a stinging attack on MLB's internal efforts to settle the matter, saying those efforts were doomed from the start and that the RSN’s viability would be threatened by an arbitration ruling favoring the Nationals. MASN called the three-person Revenue Sharing Definitions Committee that MLB enlisted to arbitrate the dispute -- which involved execs from the Mets, Rays and Pirates -- and its resulting proceedings a "sham," as the Rays and Pirates are two of the industry's largest recipients of revenue sharing and any increased rights fees for the Nationals would be taxed at a 34% rate for revenue sharing. MASN also obtained an affidavit from Media & Sports Group, a consultant long employed by MLB, for use by teams with equity interests in their own TV partners. The affidavit reads in part that the panel "employed assumptions and approaches so far outside the norms of accepted economic standards that the resulting valuation of the Nationals' telecast rights is illegitimate and unreliable." The Nationals received slightly more than $40M in local rights last year, according to industry sources, while the club is seeking more than $100M annually. The arbitration panel is believed to have set the initial yearly figure for the Nationals at about $60M. By terms of the '05 relocation agreement, MASN must pay the Orioles the same rights fees as it pays the Nationals.