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

[hoosiers]

I doubt that MASN distributed substantial profits from the reset years with the dispute going on. I can actually see the case where no profits were distributed. There was likely some profit distribution with a reserve account established to accrue funds for the resolution of the right fees. If I were advising MASN, I would have established a reserve account on the larger side given the demands made by the Nats, which leaves less to distribute in profits. Your suggesting that MASN distributed profits while have a potentially giant unfunded liability on the books. That would be insane on any level of financial accounting. I really doubt the scenario you outlined would come to fruition.

I thought we have had posted on this site, perhaps this thread, that the Lerners had received an $8M equity payment during the reset period. I believe profits were distributed. And why wouldn't they be? As was put out at the time of the adverse ruling, “MASN has honored the terms of the Settlement Agreement, including the formula in that contract for resetting the Nationals’ telecast rights fees and expects all parties will do the same. That contract specifically includes an agreed upon and historically applied formula for resetting the Clubs’ telecast rights fees that has been applied by Baseball to virtually every other club-owned regional sports network. MASN is confident its contract will be honored and looks forward to further discussions with all parties to try and resolve this matter amicably. Our loyal viewers should understand this is a business dispute and will have no impact on the telecast of the Clubs’ games.” Why wouldn't the accounting reflect that historically applied formula use in virtually every other club-owned RSN?

It would not be "insane on any level of financial accounting". Accounting principles require reserves for future costs that are probably and estimable - not worst case - at the time. Additionally, setting up substantial reserves could also be seen as an indication that one knows their treatment of an issue is suspect.

When hints surfaced that MASN could be bankrupted by this decision, it does not sound like an instance where MASN has been withholding distributions and have many tens of millions of $ in reserve and in their bank account.

[Frobby]

I thought we have had posted on this site, perhaps this thread, that the Lerners had received an $8M equity payment during the reset period. I believe profits were distributed. And why wouldn't they be? As was put out at the time of the adverse ruling, “MASN has honored the terms of the Settlement Agreement, including the formula in that contract for resetting the Nationals’ telecast rights fees and expects all parties will do the same. That contract specifically includes an agreed upon and historically applied formula for resetting the Clubs’ telecast rights fees that has been applied by Baseball to virtually every other club-owned regional sports network. MASN is confident its contract will be honored and looks forward to further discussions with all parties to try and resolve this matter amicably. Our loyal viewers should understand this is a business dispute and will have no impact on the telecast of the Clubs’ games.” Why wouldn't the accounting reflect that historically applied formula use in virtually every other club-owned RSN?

It would not be "insane on any level of financial accounting". Accounting principles require reserves for future costs that are probably and estimable - not worst case - at the time. Additionally, setting up substantial reserves could also be seen as an indication that one knows their treatment of an issue is suspect.

When hints surfaced that MASN could be bankrupted by this decision, it does not sound like an instance where MASN has been withholding distributions and have many tens of millions of $ in reserve and in their bank account.

We're all guessing. But the reserve has been "estimable" for a long time. The RSDC informally notified MASN of the expected ruling a couple of years before it issued its final decision. And, another year has gone by since the final decision. As to what is "probable," I don't know the accounting criteria, but arbitration decisions are very rarely overturned in the courts. It could happen here, but betting on that would be very risky.

[mcgraw238]

We're all guessing. But the reserve has been "estimable" for a long time. The RSDC informally notified MASN of the expected ruling a couple of years before it issued its final decision. And, another year has gone by since the final decision. As to what is "probable," I don't know the accounting criteria, but arbitration decisions are very rarely overturned in the courts. It could happen here, but betting on that would be very risky.

I agree with this. Companies established reserves related to litigation all the time as required for financial accounting purposes. This does not necessarily reflects the company's position on the issue as suspect and it is a rather flimsy argument to point to a reserve account as a reason to prevail on the issue. I agree with hoosiers that the information we have seen suggests that some level of profits have been distributed to the equity holders, but my point is that I doubt the majority equity holder will have to cut a big check back to MASN if the RSDC ruling is upheld. Failure to reserve on this issue and carrying this liability as unfunded on its books is insane on any level of financial accounting.

[mdbdotcom]

We're all guessing. But the reserve has been "estimable" for a long time. The RSDC informally notified MASN of the expected ruling a couple of years before it issued its final decision. And, another year has gone by since the final decision. As to what is "probable," I don't know the accounting criteria, but arbitration decisions are very rarely overturned in the courts. It could happen here, but betting on that would be very risky.

So, is MASN's legal strategy to drag this out until the Nats are ready to settle?

[Frobby]

So, is MASN's legal strategy to drag this out until the Nats are ready to settle?

I'd say yes, more or less. They might win the case (which would only require a new arbitration, the court won't decide the rights fees issue itself), but there is no big downside to stringing this along to get leverage for a compromise. I do think the trial judge will rule soon, though I am just guessing.

[BradyBunch]

So, is MASN's legal strategy to drag this out until the Nats are ready to settle?

Not really. Courts are gonna drag it on if Nat's and MLB keep pushing for a reset fee that assessed 5 years too early. Meaning the $60m number was awarded in a time when the Nat's had lower viewership then seats at their stadium at that point. Only a fool would think that's fair or an org trying to to drive up TV money for its smallest markets.... Which sound about right for MLB.

[weams]

What is the next thing we should hear about? Is there any other pleadings or simply a decision?

[Frobby]

What is the next thing we should hear about? Is there any other pleadings or simply a decision?

Just waiting on a decision. I'm slightly surprised the judge hasn't ruled yet, but at the same time, I've had cases where the judge took a year to rule, and there is a lot of paper to plow through here. Nothing to do but wait.

[weams]

Just waiting on a decision. I'm slightly surprised the judge hasn't ruled yet, but at the same time, I've had cases where the judge took a year to rule, and there is a lot of paper to plow through here. Nothing to do but wait.

Thank you very much.

[weams]

MLB paying it's debts to the Arbitration panel.

http://mlb.nbcsports.com/2015/09/25/mlb-is-not-happy-with-that-braves-spring-training-facility-propoal/?ocid=Yahoo&partner=ya5nbcs

“Earlier this week, Major League Baseball and the Tampa Bay Rays learned of the St. Petersburg Sports Park proposal for the first time. Major League Baseball appreciates the support that it has received for the construction of Spring Training facilities throughout the State of Florida. The most pressing need, however, is the construction of a Major League-quality facility for the Rays.

“Major League Baseball is committed to working with the Rays to secure a new ballpark in cooperation with the Tampa Bay region. This can only happen with the support of local political and business leaders.”

[Can_of_corn]

In other words they Rays can't be expected to pay for it themselves.

[weams]

In other words they Rays can't be expected to pay for it themselves.

In other words, you brought the verdict that we asked you to because of our nasty backroom deal and we will support a government bailout for your situation or move you where they will build you a palace.

[sportsfan8703]

Keep the trop. We've played home games there.

[Frobby]

In other words, you brought the verdict that we asked you to because of our nasty backroom deal and we will support a government bailout for your situation or move you where they will build you a palace.

I'm going to have to buy you a tin foil hat. MLB would be supporting the Rays in this under any circumstances.

[weams]

http://www.cleveland.com/tribe/index.ssf/2015/10/cleveland_indians_payroll_not.html

17.7 Billion. B.