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A New York judge has delivered a $100 million victory for the Washington Nationals against the Baltimore Orioles in a long-running legal feud over TV money.
The two MLB clubs have been in and out of both arbitration and court in a dispute that dates back to the way the Nationals were relocated from Montreal in 2005. To address the Orioles’ concern over another club moving into its home territory, a deal was worked out whereby both teams’ games would be telecast on the Mid-Atlantic Sports Network. The Orioles would have a supermajority profit interest in that regional sports network and would be obligated to pay the Nationals “fair market value.” The two teams fought over what was “fair,” leading to arbitration before a panel comprising executives from professional baseball.
Dissatisfaction with the initial result led the clubs to fight in open court, and in July 2017, an appellate court vacated the arbitration award because the law firm representing the Nationals was also representing the MLB widely in other matters.
However, the Orioles failed in getting the dispute beyond an MLB arbitration panel, and when a re-do produced a similarly unsatisfying result, the arbitration award again went to an outside court. The case provides an inside look at the economics of televising live baseball games with the parties arguing for different standards — the Orioles looking to a methodology factoring revenue and expenses (one that would lock in a comfortable profit margin); the Nationals putting weight on what other teams throughout professional baseball were getting in their own TV contracts.
In a ruling on Thursday, New York Supreme Court Judge Joel Cohen notes the narrow grounds to vacate under the Federal Arbitration Act and concludes that the Orioles can’t demonstrate “evident partiality,” not from the way that MLB once extended a $25 million advance to the Nationals in its television dispute nor from public statements made by MLB about this case.
Cohen also rules that the Orioles weren’t denied adequate opportunity to present its case. The judge notes the “voluminous record” over seven years and how the arbitration panel considered various discovery requests and rejected them in a reasoned order.
This outcome wasn’t terribly unexpected by the parties. The Orioles have already signaled their intention to take the dispute to an appeals court in New York that was divided during the earlier round. MLB’s alleged bias, its capacity for adjudicating internal disputes and the dictates of the Federal Arbitration Act will very likely continue there. In the meantime, with the expiration of the Orioles’ lease at Camden Yards in 2021, there’s been persistent local talk how the team could be for sale and that a move to Nashville or some other city could be in the cards.
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