Orioles Score a Run in TV Rights Lawsuit, But the Game Isn’t Over

The Baltimore Orioles and Washington Nationals are both in first place in their divisions, but the Orioles have taken the lead in their legal battle with the Nationals over?broadcast rights.

A New York judge has temporarily blocked Major League Baseball (MLB) from giving the Nationals tens of millions of dollars that the Orioles currently receive from the Mid-Atlantic Sports Network (MASN). ?The Orioles and Nationals share the network, but the Nationals would like to receive a larger share of the proceeds or terminate the arrangement.

For several years, the Nationals have protested that their share does not reflect the team’s fair market value. ?In 2011 (the most recent year for which data was available) they received approximately $35 million. ?They seek over $120 million, comparable to what similar teams receive.

Currently, under a 2005 agreement, 85 percent of MASN’s profits go to Baltimore and 15 percent to Washington, based on their equity in the network. ?Washington’s share increases by 1 percentage point a year, until it reaches 33 percent.

The Orioles maintain that their majority ownership interest is necessary to ensure the team’s viability. ?When the Nationals arrived in Washington, D.C. from Montreal in 2005, they took away a large part of the Orioles following.

Because the Nationals receive a smaller share of profits, they would like to re-classify profits as “rights fees” because, under the 2005 contract, the teams divide those fees evenly.

In June, Commissioner Bud Selig convened a “Revenue Sharing Definitions Committee” to resolve the dispute. ?The Committee, made up of the owners of the Mets, Pirates and Devil Rays, issued a decision in July. ?It gave the Nationals more money by diverting MASN profits into rights fees.

Now a court has, at least temporarily, prevented the Committee’s decision from taking effect. ?The court also ordered the Nationals not to take any steps to terminate MASN’s license to broadcast their games. ?And it unsealed the record, meaning that more details may be forthcoming.

Later this month, there will be a hearing on whether to permanently block the Committee’s plan. ?Whether the Orioles will still be ahead after the final inning remains to be seen.

If you have a contract dispute that threatens the viability of your business, you need an experienced heavy-hitter to go to bat for you. ?The attorneys at Longman & Van Grack handle all types of civil law suits and?commercial litigation. Contact (301) 291-5027?? for civil litigation representation today.