The New York State Supreme Court this morning held a hearing in Manhattan on MASN’s bid to gain a preliminary injunction against a June 30 MLB arbitration decision that would boost the Nationals’ annual TV rights fees from the RSN from about $41M to about $60M per year. MASN earlier this month gained a temporary restraining order keeping the decision from taking effect. MASN has argued the arbitration award is the result of a “corrupted and biased process” that also fails to honor the process laid out in an ’05 agreement between MLB and the Orioles, MASN’s majority owner, to set the Nationals’ right fees. The Nationals conversely, in filings with the court last week, said MASN’s petition was “a waste of judicial resources and an ongoing violation of Major League Baseball’s prohibition on litigation and the ('05 agreement).” MASN also filed with additional material with the court last week in advance of today’s hearing, arguing that if the MLB award for the Nationals is upheld, it would all but eliminate the network’s cash reserves. By terms of the ’05 settlement agreement, MASN must pay the Orioles the same as the Nationals. But the intent of that deal to help facilitate the Expos’ relocation to Washington was a structure that kept the majority equity share of the network with the Orioles in perpetuity. Documents filed with the court last week show that MLB Commissioner Bud Selig intended to hold a sanctions hearing on Aug. 6 with the Orioles and Nationals, advancing upon written threats he made recently to levy significant penalties on both clubs if the long-standing media rights rift between the two reached the courts. The Orioles, however, questioned Selig’s authority to levy sanctions and made known its intent to not appear, and the meeting was ultimately canceled (Eric Fisher, Staff Writer).
WALKING A THIN LINE: In Baltimore, Jeff Barker reported MASN attorney Thomas Hall "told a judge the network's cash reserves would be nearly eliminated and its operating margin dangerously thin" if the June 30 decision stands. MASN indicated that boosting the rights fee "to the level mandated in the June 30 decision would strip away too much revenue." Hall during an Aug. 7 hearing said, "It would cut their cash reserves to virtually zero. It would cut their operating margins as thin as thin could be" (Baltimore SUN, 8/17).
