HHP: MASN/Nats/Orioles case (Inside the Courtroom)

[Frobby]

The one competitive advantage the Orioles have, lawyer'ing, and they screwed it up!

MLB has a whole lot on money to freely spend on selling off a team that they owned. David got beat by Gothiath.

I don't really see it this way. The Orioles had no ability to veto a move of the Expos to DC. Angelos created an argument regarding the TV rights and was able to use that to negotiate the MASN deal, which was favorable to MASN/Orioles in many respects. The contract was the best deal he could get, and he took it instead of gambling on a court challenge regarding the TV rights issue, which he was likely to lose IMO. Even if it didn't work out perfectly, it left the franchise in financially stable condition, even taking into account the RSDC decision. The team is worth approximately 4 times what he paid for it. I'm shedding no tears for "David."

[weams]

I don't really see it this way. The Orioles had no ability to veto a move of the Expos to DC. Angelos created an argument regarding the TV rights and was able to use that to negotiate the MASN deal, which was favorable to MASN/Orioles in many respects. The contract was the best deal he could get, and he took it instead of gambling on a court challenge regarding the TV rights issue, which he was likely to lose IMO. Even if it didn't work out perfectly, it left the franchise in financially stable condition, even taking into account the RSDC decision. The team is worth approximately 4 times what he paid for it. I'm shedding no tears for "David."

Of course you would see it that way. And you may be right. We will never know as Angelos never had his opportunity to fight the MLB in court over the move because of the the enticement.

[weams]

I don't really see it this way. The Orioles had no ability to veto a move of the Expos to DC. Angelos created an argument regarding the TV rights and was able to use that to negotiate the MASN deal, which was favorable to MASN/Orioles in many respects. The contract was the best deal he could get, and he took it instead of gambling on a court challenge regarding the TV rights issue, which he was likely to lose IMO. Even if it didn't work out perfectly, it left the franchise in financially stable condition, even taking into account the RSDC decision. The team is worth approximately 4 times what he paid for it. I'm shedding no tears for "David."

As you know Peter Angelos refused to field a replacement team. And all these many years later I feel that it has been fully punished.

[srock]

I don't really see it this way. The Orioles had no ability to veto a move of the Expos to DC. Angelos created an argument regarding the TV rights and was able to use that to negotiate the MASN deal, which was favorable to MASN/Orioles in many respects. The contract was the best deal he could get, and he took it instead of gambling on a court challenge regarding the TV rights issue, which he was likely to lose IMO. Even if it didn't work out perfectly, it left the franchise in financially stable condition, even taking into account the RSDC decision. The team is worth approximately 4 times what he paid for it. I'm shedding no tears for "David."

Seems to me that MASN/Orioles have two big problems in this case:

1. They agreed to let the RSDC be the arbitrators. They really can't complain about their partiality after the fact.

2. They allowed the contract language about "fair market value" to be drafted in a very vague manner. It's a bedrock rule that it is for the arbitrators, not the courts, to interpret and resolve any ambiguities in the contract.

The combination of those two things makes it very tough for MASN and the Orioles. They made their own bed with regard to the wording of the contract, and now they have to lie in it.

This is what I meant by the lawyers screwing it up. Maybe this was a negotiable point and the other side wanted it vague, I don't know. In my world if something is vague and hand wavy its just flat out wrong and the compiler won't allow if . Its a good example of two disciplines (law and computer science) being rooted in the same logical philosophy, but implementing said logic in a very different manner.

Overall I agree, the Orioles have done pretty well with this whole thing.

[Frobby]

This is what I meant by the lawyers screwing it up. Maybe this was a negotiable point and the other side wanted it vague, I don't know. In my world if something is vague and hand wavy its just flat out wrong and the compiler won't allow if . Its a good example of two disciplines (law and computer science) being rooted in the same logical philosophy, but implementing said logic in a very different manner.

Overall I agree, the Orioles have done pretty well with this whole thing.

I think there has been some evidence in the case about the back-and-forth about that clause during negotiations, but I haven't had time to go into the docket and dig it up. I saw a brief mention of it in one of the affidavits, but I think there is more out there that I haven't seen.

[hoosiers]

I am struck by how little mention has been made of the low profit margin ascribed to the Orioles by the RSDC. The low profit margin is nearly a complete outlier when compared to established MLB owned RSNs in my opinion.

I also think it is a leap of faith for the RSDC to decide that MASN should get a low profit margin because it is majority owned by the Os and because the Os contractually should get the same rights fees as the Nats. This decision has consequently taken a wrecking ball to the value of MASN.

As involved as PA was in getting the MASN agreement, there appears to be several profound mistakes made in this contract including the lack of clarity regarding Bortz, the lack of minimum profit margin for MASN, the lack of timing that syncs up potentially major changes in costs (through rights fees) with changes in revenue, etc. Also, the contract was not set up as a win-win for the Os and Nats, but mostly a contract that guaranteed massive MASN profits initially for the Orioles owners, which forced the Nats to all but abandon any value they received as owners of MASN - which has led directly to where we are today.

It is a real shame the judge has plenty of precedence to not overturn the RSDC decision. I think it is a terrible decision (not just from an Os viewpoint). IMO, this decision railroaded the Orioles in an unfair manner, but it looks increasingly like this could have been avoided with a better initial agreement.

[spiritof66]

The transcript of Monday's hearing in New York Supreme Court (all 147 pages of it) is now available:

https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=5hh943EjohZ/4rtZwn78CA==&system=prod

[mdbdotcom]

MASN attorneys (joined by the Orioles) wrote a letter to the judge today stating that Manfred's comments made yesterday prove that MLB is not impartial, and that the Orioles cannot expect to receive fair treatment from them.

[weams]

MASN attorneys (joined by the Orioles) wrote a letter to the judge today stating that Manfred's comments made yesterday prove that MLB is not impartial, and that the Orioles cannot expect to receive fair treatment from them.

I am glad they did that.

[weams]

http://camdendepot.blogspot.com/2015/05/masn-dispute-final-arguments.html

[weams]

Camden Depot

Justice Marks wanted to know why the settlement agreement didn’t explicitly state that the Bortz analysis needs to be used and whether this case is different than other team-owned RSNs due to the Orioles’ control of most of the network. He also asked whether MASN would be happy if the decision was vacated and sent back to the RSDC with a direction to apply the Bortz Methodology.

[spiritof66]

MASN attorneys (joined by the Orioles) wrote a letter to the judge today stating that Manfred's comments made yesterday prove that MLB is not impartial, and that the Orioles cannot expect to receive fair treatment from them.

This letter led to a flurry of additional letters to the judge (four of them, I think). Nothing new or significant in them, so far as I can tell.

[hoosiers]

http://camdendepot.blogspot.com/2015/05/masn-dispute-final-arguments.html

Very informative yet likely slanted to the Os. I do think Proskauer is the best common link at the core of the railroading the Os in the RSDC decision. It is baffling that the RSDC should believe it can justify a 5% profit margin for MASN.

I still would like to see the sides agree on a compromise that makes MASN a win-win for both the Os and the Nats.

[weams]

Very informative yet likely slanted to the Os. I do think Proskauer is the best common link at the core of the railroading the Os in the RSDC decision. It is baffling that the RSDC should believe it can justify a 5% profit margin for MASN.

I still would like to see the sides agree on a compromise that makes MASN a win-win for both the Os and the Nats.

I am glad you liked it. Seems like this will carry on for many years to come.

[Frobby]

I am glad you liked it. Seems like this will carry on for many years to come.

Considering that the next reset period is less than two years away...