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

[weams]

Well, I agree with that. But who knows what settlement positions either side has taken since the RSDC decision came down? It's obvious MASN isn't going to settle unless the number is substantially less than what the RSDC came up with, but if they are adamantly sticking to the "Bortz number" they submitted to the RSDC, I don't see the Nats just accepting that.

I think they should compromise on the model and simply amp up the ownership position for the Nationals prematurely. Let them buy in quicker, as it were. That's my grand bargain. Then everyone is happy with profits. Orioles can afford to compete and DC can continue to pay for their large Boras contracts. Taxes get paid. Capitalism flourishes. 'Merica.

[Phantom]

The Commissioner is quite firm in his stance at this point.

Removing yourself from both O's bias and the entire legal agreement, it makes sense that the commissioner wants what is best for the Nationals. They are a bigger market, a higher national profile, and appear to have much better owners. It's a good thing for mlb on the whole for them to get their TV rights.

[weams]

Removing yourself from both O's bias and the entire legal agreement, it makes sense that the commissioner wants what is best for the Nationals. They are a bigger market, a higher national profile, and appear to have much better owners. It's a good thing for mlb on the whole for them to get their TV rights.

I can see that. As An Orioles fan, I reject it.

[Frobby]

Removing yourself from both O's bias and the entire legal agreement, it makes sense that the commissioner wants what is best for the Nationals. They are a bigger market, a higher national profile, and appear to have much better owners. It's a good thing for mlb on the whole for them to get their TV rights.

Disagree. What the Commissioner should want (and I believe, does want) is to have two healthy, competitive franchises. He doesn't need a basket case or perennial cellar dweller on his hands.

Within that parameter, I'd think he'd want the rights fees to be as high as possible, to help other teams when they are negotiating their deals and looking at comps.

Personally, I thought the RSDC decision did a decent job of balancing those two goals, putting aside the legal niceties.

[BohKnowsBmore]

Removing yourself from both O's bias and the entire legal agreement, it makes sense that the commissioner wants what is best for the Nationals. They are a bigger market, a higher national profile, and appear to have much better owners. It's a good thing for mlb on the whole for them to get their TV rights.

Well, removing from the legal agreement is a pretty big jump, though.

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[SpinJr]

Well, removing from the legal agreement is a pretty big jump, though.

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Well said. How can you remove the legal aspect from the context at large. A deal was made and the Nat's don't want to hold to that agreement anymore. Reasons why are irrelevant.

[Todd-O]

Hold on... let's back this truck up.

I, admittedly, haven't been following this too closely. Hoping someone can explain this situation like I'm a 3 yr old.

O's and MLB made an agree pre-Nats that dictated what percentage of TV rights the O's would receive through MASN. Correct?

Every 5 years the two teams revisit the agreement and an arbitration-type panel has the ability to make adjustments to the payout agreement. Correct?

The Nats feel they are severely short-changed. O's want to keep a large part of the pie. Correct?

I'm surrounded by Nats fans in my neighborhood that repeatedly point-out this MASN dispute as one of the Orioles ongoing evils.

What's the quarrel about at this point and who is in the right vs wrong?

[Frobby]

Hold on... let's back this truck up.

I, admittedly, haven't been following this too closely. Hoping someone can explain this situation like I'm a 3 yr old.

O's and MLB made an agree pre-Nats that dictated what percentage of TV rights the O's would receive through MASN. Correct?

Every 5 years the two teams revisit the agreement and an arbitration-type panel has the ability to make adjustments to the payout agreement. Correct?

The Nats feel they are severely short-changed. O's want to keep a large part of the pie. Correct?

I'm surrounded by Nats fans in my neighborhood that repeatedly point-out this MASN dispute as one of the Orioles ongoing evils.

What's the quarrel about at this point and who is in the right vs wrong?

Not quite right. The agreement didn't dictate the percentage of TV rights. It set the rights fees for the first five years, and then every five years the Nats are supposed to negotiate the "fair market value" of the rights for the next five-year period, and if the parties can't agree, then the RSDC is supposed to decide "the fair market value of the Rights...using the RSDC's established methodology for evaluating all other related party telecast agreements in the industry."

MASN claimed that the RSDC was supposed to apply a formula called the "Bortz formula" that had been used in certain other rights fees evaluations by the RSDC, which would have resulted in annual fees of $30-35 mm. The Nats claimed that the RSDC should look at comparable deals received by other teams who were negotiating with independent TV networks like FOXSports, which would have resulted in rights fees of about $120 mm according to the Nats' expert. The RSDC rejected both sides' positions and awarded annual fees in the $60-65 mm range, which they calculated would leave MASN with about a 5% profit margin using conservative projections, or more if they exceeded projections.

The Court, when it reviewed the RSDC decision, didn't find anything substantively wrong with the RSDC's analysis but voided the award because of "evident partiality" created by the fact that the Nats' attorneys had represented MLB in various other matters, creating the potential for bias in favor of the Nats' position. That decision is now on appeal, with MASN still pressing its view that the RSDC was required to apply the "Bortz formula." The Nats got new lawyers that hadn't done work for MLB, and pressed for a new hearing with the RSDC. The dispute just decided by Justice Marks was whether MLB could force MASN to participate in a new arbitration while the appeal is pending. The Judge ruled that no further arbitration proceedings should occur until the appeal was decided.

[weams]

Hold on... let's back this truck up.

I, admittedly, haven't been following this too closely. Hoping someone can explain this situation like I'm a 3 yr old.

O's and MLB made an agree pre-Nats that dictated what percentage of TV rights the O's would receive through MASN. Correct?

Every 5 years the two teams revisit the agreement and an arbitration-type panel has the ability to make adjustments to the payout agreement. Correct?

The Nats feel they are severely short-changed. O's want to keep a large part of the pie. Correct?

I'm surrounded by Nats fans in my neighborhood that repeatedly point-out this MASN dispute as one of the Orioles ongoing evils.

What's the quarrel about at this point and who is in the right vs wrong?

PM or email me.

[foxfield]

Hold on... let's back this truck up.

I, admittedly, haven't been following this too closely. Hoping someone can explain this situation like I'm a 3 yr old.

O's and MLB made an agree pre-Nats that dictated what percentage of TV rights the O's would receive through MASN. Correct?

Every 5 years the two teams revisit the agreement and an arbitration-type panel has the ability to make adjustments to the payout agreement. Correct?

The Nats feel they are severely short-changed. O's want to keep a large part of the pie. Correct?

I'm surrounded by Nats fans in my neighborhood that repeatedly point-out this MASN dispute as one of the Orioles ongoing evils.

What's the quarrel about at this point and who is in the right vs wrong?

:smile11:

Todd, the quarrel is about money and power. The O's and the Nat's are both defending their interests aggressively. MLB has been a bit more than a disinterested bystander and have clearly advocated for the Nat's side. However, at the end of the day, it should be known, that the person at fault here is... Cito Gaston.

[weams]

Not quite right. The agreement didn't dictate the percentage of TV rights. It set the rights fees for the first five years, and then every five years the Nats are supposed to negotiate the "fair market value" of the rights for the next five-year period, and if the parties can't agree, then the RSDC is supposed to decide "the fair market value of the Rights...using the RSDC's established methodology for evaluating all other related party telecast agreements in the industry."

MASN claimed that the RSDC was supposed to apply a formula called the "Bortz formula" that had been used in certain other rights fees evaluations by the RSDC, which would have resulted in annual fees of $30-35 mm. The Nats claimed that the RSDC should look at comparable deals received by other teams who were negotiating with independent TV networks like FOXSports, which would have resulted in rights fees of about $120 mm according to the Nats' expert. The RSDC rejected both sides' positions and awarded annual fees in the $60-65 mm range, which they calculated would leave MASN with about a 5% profit margin using conservative projections, or more if they exceeded projections.

The Court, when it reviewed the RSDC decision, didn't find anything substantively wrong with the RSDC's analysis but voided the award because of "evident partiality" created by the fact that the Nats' attorneys had represented MLB in various other matters, creating the potential for bias in favor of the Nats' position. That decision is now on appeal, with MASN still pressing its view that the RSDC was required to apply the "Bortz formula." The Nats got new lawyers that hadn't done work for MLB, and pressed for a new hearing with the RSDC. The dispute just decided by Justice Marks was whether MLB could force MASN to participate in a new arbitration while the appeal is pending. The Judge ruled that no further arbitration proceedings should occur until the appeal was decided.

According to an Orioles Official, the Bortz method (which had been used in all previous cases) was understood to be the ongoing method for reset in perpetuity. According to legal friends of mine, the documents do not say exactly that.

[sevastras]

So do we know what kind of money the Orioles would get? Say, Nat's get $30m, O's get? And if the Nat's get X does that mean the O's take fluctuates or do they get the same and MASN takes the difference in profits?

[weams]

So do we know what kind of money the Orioles would get? Say, Nat's get $30m, O's get? And if the Nat's get X does that mean the O's take fluctuates or do they get the same and MASN takes the difference in profits?

What I have heard is that a judgement that gives the Nationals what they deem fair bankrupts MASN, makes the RSN a moot point, and allows the Nationals to brand their own rights package with no compensation to the Orioles.

[sevastras]

According to an Orioles Official, the Bortz method (which had been used in all previous cases) was understood to be the ongoing method for reset in perpetuity. According to legal friends of mine, the documents do not say exactly that.

Correct me if I am wrong, but if the Bortz method was used to begin with, MASN could argue that it would be used in perpetuity because that was the implied basis of the agreement, even if not written.

[weams]

Correct me if I am wrong, but if the Bortz method was used to begin with, MASN could argue that it would be used in perpetuity because that was the implied basis of the agreement, even if not written.

I am not a lawyer but yes, that is what they do say when I've asked. They also say that it was absolutely the deal. MLB has told the new Nationals ownership otherwise. The deal was struck between MLB and Orioles. Not negotiated with the Lerners.