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MASN says reserves would dip to 'virtually zero' if league decision stands

A lawyer for the Orioles-controlled Mid-Atlantic Sports Network told a judge the network's cash reserves would be nearly eliminated and its operating margin dangerously thin if a June 30 decision by a league committee is allowed to stand, according to court documents.

Documents — including affidavits, memorandums, transcripts and exhibits — describe from MASN's perspective a worst-case scenario in the television rights fee case pending before a New York judge.

MASN has asked the judge to extend a temporary restraining order issued Aug. 7 blocking the panel's decision from being enforced. A decision is expected as soon as Monday, when a hearing is scheduled in New York.

"I'll resolve the motion for a preliminary injunction on the 18th," New York Supreme Court Judge Lawrence K. Marks told attorneys at the Aug. 7 hearing, according to a court transcript. "You will have a decision that day."

The ruling by the league committee would boost the TV-rights fees that MASN pays to the Washington Nationals to about $60 million a year from about $40 million. MASN and the Orioles share the network, and the Baltimore team currently gets 85 percent of the profits under a 2005 agreement intended to compensate the Orioles for losing exclusive rights to the Washington market when the Nationals arrived.

The Nationals have argued that $40 million a year is nowhere near fair market value.

MASN says increasing the rights fees to the level mandated in the June 30 decision would strip away too much revenue.

"It would cut their cash reserves to virtually zero," MASN attorney Thomas J. Hall told the judge Aug. 7. "It would cut their operating margins as thin as thin could be."

By the end of the year, MASN would owe the club about $19 million if the decision is sustained, the Nationals have said in court documents. That is the difference between what MASN now pays and what the committee said should be paid.

Documents in the case are publicly available because Marks declined a request by Major League Baseball to seal the record. Attorneys for the league argued that the documents contain commercially sensitive information.

"In New York, there's a very strong policy in favor of open court proceedings," Marks said, according to the transcript. He ordered the record kept open, though portions of documents have been redacted.

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