MASN non agreement may be one of the factors holding up a sale of the Nationals

[spiritof66]

The MASN dispute is before the New York Court of Appeals, New York's highest court. The Court of Appeals traditionally has stinted on providing electronic communication about its cases, and it looks like it still does. 

I spoke on Friday afternoon with the court clerk's office. I learned that the Court of Appeals had scheduled the MASN case for oral argument (the last step before a decision) on February 8, that last week the court granted a request by both sides to put that off, and that no new date has been set. None of that information appears on the court's website.

I couldn't get an explanation of what's going on or a forecast of what will happen next, but from words like "brief" and "soon" I'm guessing that a new date will be set this week or next, and that the argument will be scheduled for March or April. Typically, when a court puts off an argument at the parties' request, the reason is a lawyer's unavoidable scheduling conflict or the parties' statement that they're working towards and nearing a settlement. 

One possible wild card. The Chief Judge of the Court of Appeals resigned last summer. While the governor Kathy ("Go, Bills") Hochul has nominated a successor, there's both political controversy about that choice and a dispute as to what's legally required to confirm the nomination. There's an interim Chief Judge in place, so there's a full (seven-person) Court of Appeals, and I don't think this mess will delay or affect things. But it could.

A couple thoughts about what might be going on. The Angeloses are going to have to sell Peter's (or his estate's) interest in the Orioles, and they are reported to be getting advice from Goldman Sachs about the sale. It seems very likely that uncertainty about MASN rights fees and profits (past, present and future) would affect adversely the price paid for the Orioles, putting pressure on the Angeloses to settle the MASN issues before a sale. And it's logical that the prospects for a settlement have improved since the decision-maker has moved from a pig-headed egomaniac (who probably personally screwed up the MASN agreement in the first place) to an unsophisticated business tyro to a business tyro who's getting sophisticated expert advice.

Reports that the Lerners were interested in selling some or all of the Nats suggested there might be pressure to settle on both sides before selling, but the Nats sales talk has been toned down (maybe just until there's a resolution of the MASN dispute). In any event, there's reason to be optimistic that we're nearing the end of this mess.

Since John Angelos became the face of the Orioles, some have presented a narrative that Mighty Manfred's and MLB's animus toward Peter Angelos as an obstreperous, impossible-to-please non-team player doesn't carry over to Georgia, John and Lou. Maybe there's something to that, but even if there is I doubt it carries any weight. In fact, we've learned (at least, I did) from Lou's lawsuit that for over four years it's been John/Lou/Georgia Angelos, not Peter, who have refused to settle the MASN dispute. To me, that's one more reason why the next owner of the Orioles won't be named Angelos.

 

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[E-D-D-I-E]

I didn't not understand this so maybe someone can make it easy for me. Keep in mind Iay be dead wrong on what I thought was involved.

 

MLB have the O's the rights to the Nats TV viewing for them giving DC a team. Now the Nats want a higher percentage. If this is accurate, I am not sure why this is a case. You signed the contract, you abide by it. What am I missing? 

 

 

 

 

 

[Frobby]

6 minutes ago, E-D-D-I-E said:

I didn't not understand this so maybe someone can make it easy for me. Keep in mind Iay be dead wrong on what I thought was involved.

 

MLB have the O's the rights to the Nats TV viewing for them giving DC a team. Now the Nats want a higher percentage. If this is accurate, I am not sure why this is a case. You signed the contract, you abide by it. What am I missing? 

You are wrong.  The contract says that the O’s and Nats will be paid the same amount by MASN for the rights to broadcast their games, and the amount will be the fair market value as determined every five years.   The dispute is over what the fair market value is.    The Orioles own the majority of MASN so they want the value to be lower so that MASN’s profits are higher.  The Nats want the rights fees to be as high as possible.  The parties couldn’t agree on what the fees should be, so an arbitration panel consisting of three MLB owners made a determination, as provided under the contract in case the parties can’t agree.   The Orioles and MASN are now saying the arbitrators were biased and that the matter should be decided by new, independent arbitrators not appointed by MLB.  That’s the question now before the New York Court of Appeals.

[eddie83]

1 hour ago, Frobby said:

You are wrong.  The contract says that the O’s and Nats will be paid the same amount by MASN for the rights to broadcast their games, and the amount will be the fair market value as determined every five years.   The dispute is over what the fair market value is.    The Orioles own the majority of MASN so they want the value to be lower so that MASN’s profits are higher.  The Nats want the rights fees to be as high as possible.  The parties couldn’t agree on what the fees should be, so an arbitration panel consisting of three MLB owners made a determination, as provided under the contract in case the parties can’t agree.   The Orioles and MASN are now saying the arbitrators were biased and that the matter should be decided by new, independent arbitrators not appointed by MLB.  That’s the question now before the New York Court of Appeals.

Pardon my ignorance but why and how did all of this end up in a NY court? I guess this has been talked about before but this thing has dragged on for so long I don’t recall. 

[Going Underground]

1 hour ago, Frobby said:

You are wrong.  The contract says that the O’s and Nats will be paid the same amount by MASN for the rights to broadcast their games, and the amount will be the fair market value as determined every five years.   The dispute is over what the fair market value is.    The Orioles own the majority of MASN so they want the value to be lower so that MASN’s profits are higher.  The Nats want the rights fees to be as high as possible.  The parties couldn’t agree on what the fees should be, so an arbitration panel consisting of three MLB owners made a determination, as provided under the contract in case the parties can’t agree.   The Orioles and MASN are now saying the arbitrators were biased and that the matter should be decided by new, independent arbitrators not appointed by MLB.  That’s the question now before the New York Court of Appeals.

Is this part still true? That the broadcasting rights fees are subject to revenue sharing but not the MASN profit? An incentive to keep the broadcasting rights fees as low as possible.

.

However, profit from MASN that isn’t paid to the team in broadcast fees is not subject to revenue sharing. This provision that benefits the small handful of teams that get their own RSN and provides clear incentive for the Orioles and for Peter Angelos: keep broadcast fees as low as possible.

[Frobby]

1 hour ago, eddie83 said:

Pardon my ignorance but why and how did all of this end up in a NY court? I guess this has been talked about before but this thing has dragged on for so long I don’t recall. 

The headquarters of MLB, which is a party to the case, is in New York.  Also, I think the contract states that it is governed by New York law.   So, when the time came to challenge the arbitration, MASN/the Orioles chose to do it in NY.

[eddie83]

7 minutes ago, Frobby said:

The headquarters of MLB, which is a party to the case, is in New York.  Also, I think the contract states that it is governed by New York law.   So, when the time came to challenge the arbitration, MASN/the Orioles chose to do it in NY.

Ok. Was wondering if MLB headquarters mattered. Thanks. 

[Frobby]

32 minutes ago, Going Underground said:

Is this part still true? That the broadcasting rights fees are subject to revenue sharing but not the MASN profit? An incentive to keep the broadcasting rights fees as low as possible.

.

However, profit from MASN that isn’t paid to the team in broadcast fees is not subject to revenue sharing. This provision that benefits the small handful of teams that get their own RSN and provides clear incentive for the Orioles and for Peter Angelos: keep broadcast fees as low as possible.

That’s all true.  The actual standing job of the RSDC (the MLB Committee that handled the arbitration) is to look at rights fees charged to team-owned RSNs and determine whether they are arms-length prices, or have been set artificially low to avoid revenue sharing.  If the latter, they are adjusted for purposes of determining the revenue sharing amount.  

[LookinUp]

On 1/13/2023 at 12:16 PM, Frobby said:

To be clear about something, the legal dispute could be over pretty soon.  The case is before New York’s highest court, the New York Court of Appeals, and is fully briefed.   Actually, it appears two amicus (“friend of the court”) briefs were filed this week in support of MASN and the Orioles’ position.  All that remains to happen is an oral argument and a decision. ...

Different type of law and different court, but I was recently involved in a complicated federal appeals court issue and the ruling took just under 18 months after the oral arguments.

This is state and I'm guessing a less heavy type of issue.

[Frobby]

18 minutes ago, LookinUp said:

Different type of law and different court, but I was recently involved in a complicated federal appeals court issue and the ruling took just under 18 months after the oral arguments.

This is state and I'm guessing a less heavy type of issue.

It can take a long time in the NY state courts too.  It would probably be shorter than that because the NY Court of Appeals, as the highest court in that system, has discretion over whether to hear most appeals, unlike the federal courts of appeal, which have to take all comers.