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NY judge wrestles with legal issues surrounding long-running MASN dispute

A New York Supreme Court judge signalled he was “genuinely struggling” whether he could overturn a Major League Baseball arbitration ruling in the long-running media rights battle between the Baltimore Orioles and Washington Nationals.

A three-hour court hearing on July 12 in New York centered on oral arguments in the Orioles’ bid as majority owner of the Mid-Atlantic Sports Network to block the ruling by MLB’s Revenue Sharing Definitions Committee granting the Nationals nearly $100 million in additional local media rights money for 2012-16. The Nationals are seeking to have the award confirmed after a state appeal court vacated a similar league ruling in the club’s favor.

But Justice Joel Cohen said during extensive questioning of attorneys for both clubs that he was trying to demarcate issues of fairness surrounding the arbitration – representing the actual legal issue before him – versus retrying the case itself.

“I’m genuinely struggling,” Cohen said. “Where is the line between second-guessing sort of normal procedural decisions?”

Cohen later said his purview was not to call “balls and strikes” on the media rights themselves.

The Orioles and MASN, as they did in their written opposition brief, sought to make the broader case the RSDC hearing was a deeply rigged affair from the start, pointing in part to a now-repaid $25m (€22m) loan made by MLB to the Nationals. Similar issues of evident partiality led to the vacatur of the first RSDC ruling. 

Nearly half of the oral arguments session centered on Cohen questions surrounding the $25m loan, and the argument of the Orioles and MASN that the funds helped ensure the media rights dispute would return to the RSDC as opposed to a neutral forum. 

Because of that, as well as repeated public comments by MLB commissioner Rob Manfred that the Nationals would ultimately receive the additional rights fees, the Orioles and MASN argued the case rises well beyond the media rights dispute into issues of fundamental fairness surrounding the arbitration process.

“We submit here that the taint got worse [in the second league arbitration], not better,” said David Frederick, counsel for the Orioles and MASN. “The merits were not given a fair shake by the second RSDC panel.”

Stephen Neuwirth, attorney for the Nationals, countered the Orioles and MASN are merely “rehashing” now-settled matters.

“Essentially, what’s happening here is we’re having a relitigation,” Neuwirth said.

Cohen did not rule from the bench and promised a decision as soon as possible. The ownership of both MLB clubs were keeping a close eye on the proceedings, as the hearing was attended by Ed Cohen, the Nationals’ principal owner and brother-in-law of managing principal owner Mark Lerner, and Louis Angelos, Orioles ownership representative and son of lead team owner Peter Angelos.

The 2005 creation of the MASN regional sports network was a key element of compensation for the elder Angelos and the Orioles following the relocation of the Montreal Expos to Washington to become the Nationals. The Orioles retain a supermajority equity interest in MASN. 

Following an initial establishment period for the channel, the Orioles and Nationals have battled for nearly eight years over what are the Nationals’ proper rights fees, representing a highly unusual legal fight between teams existing in the same US sports league.

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