The battle between the Baltimore Orioles and Washington Nationals over TV rights fees has been ugly and unending. It’s not going to get any less ugly with the news that a Major League Baseball committee ruled the Nationals are owed almost $100 million by the Mid-Atlantic Sports Network (MASN), a network both franchises have stakes in (it’s currently 77 percent owned by the Orioles, 23 percent owned by the Nationals).
According to court filings that were made public this week, MLB’s three-member revenue sharing committee decided that the network owed Washington about $59 million annually in TV rights for each season between 2012 and 2016. That’s around $20 million more per year than was actually paid. Given that the Orioles have a controlling interest in MASN, that creates a whole conflict of interest that implies the network was actively attempting to undercut the Nationals.
The Orioles have already informed the New York State Court that they plan to appeal the decision.
In the meantime, the Nationals are trying to make it clear that they are harmed by the delay in payment, as that’s no small amount of money. However, the Washington Post reports that according to a “person with knowledge of the MASN payments,” the team would receive something closer to $60 or $70 million in total due to accounting adjustments.
The decision came from a hearing held in November that was supposed to end the legal dispute between the two sides. The decision itself isn’t unprecedented either; MLB’s revenue sharing committee reached a similar decision in 2014, awarding the Nationals $298.1 million in total revenue for that same time period. Baltimore had appealed that decision on the grounds that the Nationals were represented by a law firm that also worked with the league.
The Orioles also argued that MLB was in no position to decide the issue because they had loaned the Nationals $25 million in 2013, which meant they had a vested financial interest in the franchise. They won that appeal and sent it back to MLB where the Nationals came back with new lawyers. They also said that initial loan had already been paid back with interest.
The Orioles still say that they were correct in the way they calculated profits from MASN. Even though both teams receive identical rights fees, Baltimore collects a larger share of network profits since they own a larger percentage of it. The Nationals’ argument is that the method in which the fees were determined was not in line with the current market value of MLB TV deals and needed to be adjusted.
This is still just one of the multiple legal issues between the two baseball teams. In a separate case, the Nationals were recently denied a petition that wanted to block an independent arbitrator from hearing whether or not MLB could require MASN to pay out a dividend payment from 2018 to them. The Nationals want the payment while the network says it’s their right to withhold it. A judge had ruled that an independent arbitrator could indeed decide that case.
Both teams have concerns on the field as they’re struggling to keep up with their division rivals. However, the fight to build a winner on the field still pales in comparison to the fight between team owners when it comes to the millions of dollars generated by TV. Unless one of these teams decides to leave the market (which, in theory, has been rumored), expect the battle to keep going until either one splits off their own network.
