MASN Mess Meanders on: New York Appellate Court Is the Latest to Try to Sort Out the Decade-Old RSN Fee Dispute Between Baseball's Orioles and Nationals
Eighteen years after the erstwhile Montreal Expos moved into the Baltimore Orioles’ TV market and started sharing their regional sports network, the two sides are still trying to figure out revenue-sharing
Major League Baseball’s Baltimore Orioles are 57-48 in the regular-season and playoffs against the Washington Nationals all-time.
But after more than a decade spent in courtrooms and arbitration hearings trying to figure out how to split TV rights fees from the regional sports network they share, the two franchises are still deadlocked in an extra-innings duel.
On Tuesday, the New York Court of Appeals heard oral arguments from both sides, becoming the latest court or arbitrative body to try to determine how much in the way of TV rights money the Nationals should receive from Mid-Atlantic Sports Network (MASN) for the period of 2012-2016.
Also read: MASN To Broadcast Orioles, Washington Nationals; Add HD
The conflict’s chasm remains wide. MASN, which is majority owned by the Orioles, already paid the Nationals what the Orioles proposed for that five-year period: $197.5 million. But the Nationals have argued they should be paid $475 million.
In 2012, an arbitration panel of executives from the Pittsburgh Pirates, Tampa Bay Rays and New York Mets heard the case. And in 2014, it ruled that the Nationals’ five-year total for 2012-2016 should come out to $298.1 million, or $60 million a season.
The Orioles argued that paying the Nationals nearly $60 million a season would wipe out profitability for MASN, for which the Baltimore franchise is the primary beneficiary.
All subsequent attempts to hammer out an agreement led to Tuesday's hearing nine years later. The Athletic has an in-depth summary (opens in new tab) of all that arbitration and litigation that's gone into this.
And even if the New York court’s six-judge panel is able to come up with a number agreeable to both sides, the drama won't be over. There are still rights fees for the five-year periods of 2017-2021 and 2022-2026 to figure out.
Curse of the Expos
The MASN mess started all the way back in 2005, when the financially failing Montreal Expos relocated to Washington, crowding into a Mid-Atlantic TV market that had been exclusively controlled by the Orioles since 1972.
To compensate the Orioles, Major League Baseball gave them majority ownership of MASN, the regional sports network that would show games for both Orioles and the Nationals.
TV rights fees would be split between the two franchises. Initially, the Orioles would own 90% of the RSN, with the Nationals gradually growing their share every year, with 2032 designated to be the year that its ownership tops out at 33%.
Since the Orioles had a greater interest in MASN’s profit, the franchise doesn’t benefit from high team rights fees as much as the Nationals, even though its TV rights fee would be equal under the way the deal is structured. In other words, the Orioles actually make more money when their RSN pays less in total rights fees.
In any event, the 2012-2016 portion of the dispute could be headed to the U.S. Supreme Court, if the New York appellant court can’t hash it out. ■
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Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!