The Washington Nationals have won a huge ruling in their ongoing legal dispute with MASN, the RSN minority owned by the team and majority controlled by the Baltimore Orioles.
On Tuesday, the New York State Court of Appeals ruled in favor of the Nationals regarding the value of the team’s media rights. The dispute between the Nationals and MASN/the Orioles has been going on for over a decade, though we “only” first wrote about it in 2014.
To briefly summarize the dispute, as part of the team’s carriage agreement with MASN, the Nationals were supposed to receive “fair market value” for their media rights beginning in 2012. MASN determined the value at $40 million per season, while the Nationals argued for $118 million per season. An MLB panel ruled in favor of the Nationals, which led to various appeals and new hearings before today’s appeal went in favor of the Nationals.
Here’s the Washington Post’s summary of the situation.
The case has been a legal odyssey. Beginning in 2012, the Nationals challenged the rights fee payments they were set to receive for the next five seasons, which MASN determined was around $40 million per year, or $200 million in total. The Nationals asked MASN for far more, around $118 million a year or $475 million in total. An MLB revenue sharing committee settled closer to MASN’s original offer, finding the Nationals should receive about $20 million more annually than MASN agreed to pay, meaning the network owed the team an additional $100 million.
MASN sued, arguing MLB was not an impartial arbiter, and won their case in a New York court at least in part because MLB had given a loan to the Nationals and the entities had shared legal counsel. The dispute was sent back to MLB. The Nationals hired new lawyers, and another MLB committee made an identical ruling, which MASN challenged again, setting the stage for Tuesday’s decision.
The Nationals won’t be paid immediately, and because of various “profit disbursements” from MASN, they likely won’t get the full $100 million owed. An arbitrator will likely rule on the exact amount owed to the team.
Incredibly, this whole mess was about rights fees owed from 2012-16. It doesn’t even begin to take rights fees from 2017 to the present day into account, which will also likely be set by an MLB committee.
Now that this hurdle has been cleared, it should be a little easier for the Nationals to be sold. Capitals and Wizards owner Ted Leonsis is rumored to be interested in purchasing the team, and reportedly offered to buy MASN as well.
MASN’s finances are a question in the era of cord cutting. At the start of 2021, the network cut a swath of on-air talent and slashed shoulder programming for Nationals and Orioles games. The company also started off 2022 by keeping Nationals and Orioles broadcasters off the road, reversing the decision after plenty of negative feedback. Will the network be able to pay the Nationals this chunk of back-owed rights, along with the still to be determined chunks of back rights from 2017-21 and 2022-present? That’s a question that will be answered at a later date.
