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MASN dispute update

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1 minute ago, Frobby said:

I think if this award survives all appeals, future debates will be limited to nibbling at the edges.    The award sets the methodology for determining rights fees and any future adjustments in that methodology will be minor.    

To me the big misconception is that “the Nats won.”    No they didn’t.   They had an arbitration, the panel made a compromise award, and the Nats decided to accept it while the Orioles didn’t.    I doubt the Nats liked the initial decision any more than the Orioles did.   But they made the strategic decision to live with it and align itself with MLB.    

Realistically how fast can the appeals get shut down and this judgement finalized?

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2 minutes ago, Can_of_corn said:

Realistically how fast can the appeals get shut down and this judgement finalized?

The appeals will take time, assuming the Orioles pursue them.   Realistically, a minimum of 18 months, a maximum of 3 years (but probably not that long).

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10 minutes ago, Can_of_corn said:

Realistically how fast can the appeals get shut down and this judgement finalized?

Call Ah-nuld 
220px-Terminator2poster.jpg

6 minutes ago, Frobby said:

The appeals will take time, assuming the Orioles pursue them.   Realistically, a minimum of 18 months, a maximum of 3 years (but probably not that long).

Either way, 2012-16 gets settled when the next phase 2017-21 was also supposed to end.

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1 hour ago, Beetlejuice said:

Why would the Nationals be inclined to do so?  I don’t know how bitter the Lerners are, but if they want to stick it to Angelos they’ve got the means to do so by simply pushing for higher broadcast fees to both teams in order to crush MASN.

So they dont have to deal with further appeals and risk losing in court 

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On 8/23/2019 at 9:02 AM, Frobby said:

 

In many cases, arbitration is a quick and efficient way to resolve disputes with little or no court involvement. Stolt-Nielsen S.A. v. Animal Feeds International Corp., 559 U.S. 662 (2010). This is not one of those cases.

This is a dispute between the Washington Nationals Baseball Club ("the Nationals") and the Baltimore Orioles Baseball Club ("the Orioles") and related entities regarding the division of television revenues and profits through their jointly owned television network MASN. As required by their contract, the teams submitted the dispute for resolution by Major League Baseball’s Revenue Sharing Definitions Committee ("RSDC") in January 2012.1

The RSDC issued its decision two years later. It was promptly challenged in court by the Orioles. After three years of litigation, the arbitration award was vacated on the ground that the law firm that represented the Nationals in the arbitration concurrently represented Major League Baseball (MLB) and the three arbitrators’ teams in other matters, resulting in "evident partiality." The Orioles’ request to have the second arbitration shifted to a non-MLB tribunal was denied. Then came another year of arbitration with a different RSDC panel, which rendered an award that was nearly identical in dollar terms to the first one five years earlier.

And now, more than seven years after the arbitration process began, the parties are back in litigation. The Nationals (again) ask the Court to confirm the RDSC arbitration award. In response, the Orioles (again) ask the Court to vacate the award on the ground of MLB and RSDC bias and remand for a third arbitration before a non-MLB arbitration panel.  With a nod to Yogi Berra, it’s like déjà vu all over again.

For the reasons that follow, the Court grants the Nationals’ motion, confirms the RSDC’s award, and terminates this proceeding.

 

Who knew Supreme Court Justices have a sense of humor?

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On 8/23/2019 at 3:56 PM, spiritof66 said:

I haven't read the decision, but here are a couple of thoughts:

1. Sure, the Orioles can appeal the decision to the Appellate Division, First Department (which is obligated to the hear the appeal), and then to the New York Court of Appeals (which will be obligated to hear the appeal only under certain circumstances that are unlikely to occur), and then to the U. S. Supreme Court (if the Orioles want to waste some money).

But there's a critical difference from the last round of appeals. The Nats now have obtained (it appears, though again I haven't read the decision) the New York Supreme Court's confirmation  -- that is, its approval -- of the second arbitration award. They didn't have that before; all the previous court decisions contemplated further arbitration proceedings.

Now, or possibly after waiting for pre-judgment interest to be calculated and added to the amount owed, the Nats have the right to obtain a judgment of a court in New York and then elsewhere compelling MASN (and/or the Orioles) to pay to the Nats the specific amount stated in the judgment (plus interest on that amount). MASN's and the Orioles' appeals will not affect their obligation to pay that amount, unless MASN and the Orioles either (a) provide security in that full amount, plus interest (by obtaining an "undertaking," which is like a bail bond, in which an insurance company or other deep pocket would promise to pay the judgment if MASN and the Orioles don't after they have finished appealing, or putting funds in the amount of the judgment aside in a manner that ensures the Nats they will be readily available to them when the appeals are over), or (b) get the Supreme Court or the First Department to say that payment need not be made while the appeals are pursued. Undertakings of this magnitude are hard to come by and very expensive, and I think MASN and the Orioles would have a tough time prevailing on an argument that their obligation to pay should be deferred after it's been determined in two arbitrations that they have very substantial payment obligations. 

So while MASN and the Orioles can appeal, I think it's likely that pretty soon this arbitration award is going to start costing them real dollars, and lots of them.

2. Insofar as the result of the arbitration is deemed to be unfair or surprising to the Orioles, I believe the blame lies principally with themselves or their lawyers (and it's possible that Peter Angelos or lawyers in his firm played both roles). I prepared a long comment on this topic, which I never posted because it seemed too negative. What follows is, believe it or not, a summary of the two aspects in which it appears the Orioles or their lawyers laid the groundwork for these arbitration decisions. 

First, when the Orioles agreed to the rights fee dispute resolution provision in the 2005 MASN Agreement, they didn't understand, or did understand but chose to ignore, what the RSDC does, and failed to insist on a definition of "[t]he fair market value of the rights" that would have clarified what the RSDC was supposed to decide. While "fair market value" has a standard meaning and therefore ordinarily doesn't require a definition, that standard meaning doesn't logically fit in with the rest of this provision, including the reference to the RSDC's "established methodology." As a result, the rights fee dispute resolution provision, rather than being clear and direct about what the RSDC is supposed to do, is subject to differing interpretations. (Even though I believe that under an exacting legal analysis, only one interpretation works, I understand that others disagree.) Moreover, prescribing a determination of "fair market value" gives the decision-maker wide latitude as to both methodology and result. There is no single "correct" value, and it's hard to say most values are "wrong." So the RSDC was given wide scope in deciding future rights fees.

Second, practically any practitioner or handbook about arbitrations will say that when you agree to have important issues decided by arbitration your most important decision is the selection of the arbitrator(s), since it's virtually certain you'll have to live with their decision even if it's unfair, incompetent, or just plain wrong. There are various recognized methods in which to optimize the likelihood that  arbitrators will have the expertise to decide the issues before them, unbiased and fair. None of them was used here. Instead, the MASN agreement provides what I'd call a "pig in a poke" method: future rights fees would be decided by the three MLB owners who would be the members of the RSDC (which changes membership on a regular basis) at unidentified future times. Those future members might or might not be competent to understand and apply the rights fee provision, and might or might not favor, as a personal or business matter, MLB or the Nats. (Given Angelos's status among MLB owners, I doubt there was much possibility of bias in his favor among RSDC members.) 

When you put these two things together, the Orioles agreed in 2005 that disputes over the amounts of post-2011 rights fees -- an issue of importance to the franchise's long-term financial health -- would be decided by three not-yet-identified MLB owners, who might like or dislike the Orioles or the Nats, and might simply do MLB's bidding. Those three owners would be asked to determine the rights fees by applying their interpretation of a provision whose meaning was  internally incoherent, and the Orioles/MASN would be stuck with their decision. It wouldn't matter what the dispute provision "really" meant, or what the Orioles thought it meant, if the arbitrators -- or their puppet-masters in MLB -- had a different interpretation. That's what the Orioles agreed to, either because they and their lawyers didn't bother to clarify what the rights fee dispute provision meant, or because they decided to sign on to a crapshoot as to how future rights fees would be decided. They are now stuck with the consequences. It could have been worse.   

Great points.    I have two things to say in response.    

1.   If MASN has been holding the money awarded the first time that wasn’t paid to the Nats (which would have been prudent), they should have enough cash on hand to find a way to secure an appellate bond. 

2.   While the agreement contains some terms that might have been more favorable to the Orioles with regard to specificity of the formula to determine rights fees and the forum to resolve disputes, it always has to be remembered that the O’s basis to sue MLB to stop the Expos from moving to DC was a longshot.    They simply did not have that much leverage to push MLB on these kinds of details.    I certainly regard the fact that Angelos got this deal from MLB as semi-miraculous, even knowing the outcome of the arbitrations.

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10 hours ago, Frobby said:

Great points.    I have two things to say in response.    

1.   If MASN has been holding the money awarded the first time that wasn’t paid to the Nats (which would have been prudent), they should have enough cash on hand to find a way to secure an appellate bond. 

2.   While the agreement contains some terms that might have been more favorable to the Orioles with regard to specificity of the formula to determine rights fees and the forum to resolve disputes, it always has to be remembered that the O’s basis to sue MLB to stop the Expos from moving to DC was a longshot.    They simply did not have that much leverage to push MLB on these kinds of details.    I certainly regard the fact that Angelos got this deal from MLB as semi-miraculous, even knowing the outcome of the arbitrations.

1. I assume the Orioles and MASN reserved these amounts (with interest) as an accounting matter. I have no idea whether they also put the cash aside, but I'm pretty sure they have it available on short notice. Nonetheless, a bond in this amount -- and I've lost track of what the total payment amount would be -- is (or used to be) pretty expensive. That is, you pay a premium of millions of dollars to a bonding company even if it's taking virtually no risk. (It hadn't occurred to me until now, but the Nats have an incentive to agree to an alternative security arrangement for MASN's portion of the payment obligations since the Nats would bear a minority portion of the Nats' bonding costs in the form of reduced MASN profits.)

2. I'll take your word about the longshot nature of the Orioles' claim for damages based on the Nats' arrival -- I've never looked into it. The question that I don't know the answer to, and guess I'll never know the answer to, is whether the Orioles understood that they were agreeing to post-2011 rights fee payments in amounts that were poorly defined and would be determined by unknown persons of unknown competence, loyalties and biases, but concluded that they had no better option. The Orioles would have been stuck with the first arbitration award (and, likely, that method going forward) had it not been for MLB's (apparently in the form of future Commissioner Manfred) arrogance and incompetence  in running that arbitration.

 

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On 8/24/2019 at 4:34 PM, Frobby said:

The appeals will take time, assuming the Orioles pursue them.   Realistically, a minimum of 18 months, a maximum of 3 years (but probably not that long).

Thanks for providing your expertise on this, Frobby. Very appreciated.

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At this point do anyone believe the Orioles are gonna purse another appeal? Looks like it would be wasted money given both outcomes. I won't pretend to know what's going on with the lawyer jargon, but sounds like the Orioles are getting mixture of playing themselves and getting finessed.

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2 minutes ago, $Greatness$ said:

At this point do anyone believe the Orioles are gonna purse another appeal? Looks like it would be wasted money given both outcomes. I won't pretend to know what's going on with the lawyer jargon, but sounds like the Orioles are getting mixture of playing themselves and getting finessed.

So the lawyers are the ones making the money, and the Angelos are a lawfirm. Lets say, I am sure, they are not drawing their normal wages.

I think the Orioles feel like they are getting short changed (No pun intended) and keep trying to get things more in their favor.

Its what big businesses do, all the darn time.

 

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1 hour ago, Redskins Rick said:

So the lawyers are the ones making the money, and the Angelos are a lawfirm. Lets say, I am sure, they are not drawing their normal wages.

I think the Orioles feel like they are getting short changed (No pun intended) and keep trying to get things more in their favor.

Its what big businesses do, all the darn time.

 

The Angelos firm does not represent MASN or the Orioles in the dispute.    

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16 hours ago, Frobby said:

The Angelos firm does not represent MASN or the Orioles in the dispute.    

You dont have to respond, but I suspect you have done lawyer work for a laywer friend and did not charge, or did not charge your normal rate.

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1 hour ago, dmvsports410 said:

I said to myself if the Royals can find somebody the Orioles can. 

The Royals are looking for a new owner.

Ive seen nothing outside of wild speculation that the Orioles are seeking a new owner.

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