Nationals Ask Court to Modify Injunction in MASN Dispute
The legal sparring between the Washington Nationals and Mid-Atlantic Sports Network continued last week, with the Nationals asking the presiding judge in the case to modify the preliminary injunction issued last August. As background, the dispute centers on an arbitration decision issued in 2014 by MLB’s Revenue Sharing Definitions Committee (RSDC), which determined that MASN owes the Nationals roughly $60 million per year in broadcast rights fees (for more on the dispute, click here, here, here, and here).
MASN and the Baltimore Orioles (who own a majority share of the network) appealed this outcome to New York state court, alleging that the arbitration proceedings were biased for a variety of reasons. In August, Judge Lawrence Marks issued a preliminary injunction, blocking MLB from enforcing the arbitration decision until the suit was resolved. This was a modest victory for MASN, allowing the team to continue to pay the Nationals a lower broadcast rights fee pending a final hearing in the lawsuit (a difference of approximately $21 million per year).
Part of the reason that the judge decided to issue the injunction was his belief that the dispute could be resolved “expeditiously.” Originally, the court scheduled a final hearing in the case for December 2014. That date was eventually pushed back to mid-March, and then again recently to May 18, 2015.
The Nationals now contend that this delay has imposed a real hardship on the team, depriving it of the full broadcast rights fee determined by the RSDC for a much longer period of time than the court had originally envisioned. As a result, on Wednesday the team asked the court to order MASN to pay the Nationals the first quarterly installment of the full RSDC-approved broadcast rights fee (an installment of around $15 million, rather than the roughly $10 million MASN intends to pay). Washington justified its request in part by contending that because it is “not receiving fair market value for [its] broadcast rights,” it is being “placed at a competitive disadvantage compared to other teams, and [is] hamstrung in [its] ability to invest in efforts to improve the team and the stadium.”
MASN responded to the Nationals’ request later that same day. The network offered to increase the size of the bond it had secured to ensure that the Nationals would receive the additional broadcast revenues should the court eventually rule in Washington’s favor. But MASN argued that it should continue to be allowed to pay a reduced sum to the Nationals pending a final resolution of the lawsuit. The network also contested the claim that Washington was unable to fully invest in its team’s roster due to the injunction, citing the Nationals’ recent $210 million contract with Max Scherzer as proof that the lawsuit was not hampering the team financially.
Considering that the court was willing to issue a preliminary injunction last August, the odds that the judge will set that ruling aside now to allow the Nationals to collect the full broadcast rights fee authorized by the RSDC are relatively low. However, the court will likely take MASN up on its offer to provide an additional bond to ensure that the extra funds will be available for Washington should the Nationals prevail in the case. In any event, this latest legal maneuvering indicates that the parties are not any closer to a settlement in the case, despite comments by Rob Manfred last week suggesting that the litigation could be resolved in relatively short order.




