The Orioles on Thursday lost their appeal of a decision ordering the team’s regional television network to pay the neighboring Washington Nationals about $100 million more in broadcast rights fees.
The Orioles said through an attorney that they intend to appeal to New York’s highest court.
The Orioles and the Mid-Atlantic Sports Network — which broadcasts both teams' games — had argued that Major League Baseball had a conflict of interest when its arbitration panel awarded the Nationals about $100 million in additional rights fees last year.
But the New York Supreme Court’s Appellate Division said Thursday that MASN and the Orioles failed to establish that the arbitration panel — which is called the Revenue Sharing Definitions Committee and is composed of three MLB club owners — was less than impartial.
“Moreover, we reject petitioner’s arguments that the [panel] otherwise violated its obligations, exceeded its powers or denied petitioner a fair hearing,” the court’s one-page decision said.
The Orioles have long argued that MLB predetermined the outcome of the broadcast rights fee case that dates back more than eight years.
“The Orioles and MASN believe the evidence shows that [the panel] is not a fundamentally fair and neutral forum for this dispute,” attorney Thomas Sosnowski said in a prepared statement on behalf of the team and the network.
Sosnowski said federal arbitration law and New York law “mandate that this dispute be heard before a neutral forum independent of MLB.” The Orioles organization suggested in the past that the American Arbitration Association could be a proper organization to hear such a dispute.
Nationals attorney Stephen Neuwirth did not return a telephone message left at his office late Thursday.
The appellate division issuing Thursday’s decision is an intermediate appeals court, giving the Orioles an appeals option. Sosnowski said the club and MASN “look forward to presenting their case” to the New York Court of Appeals.
The arbitration panel’s 2019 award challenged by the Orioles amounted to about $20 million in additional fees to be paid to the Nationals for each of five years — 2012 through 2016. The money would be on top of the $197.6 million that the Nationals already received from MASN from 2012 to 2016.
The Nationals might not receive that much if they ultimately win the case. That’s because the network might be permitted to restate its financial results for those five years, reducing its profit to pay the higher TV rights fees. The more money MASN pays in rights fees, the less it has available for profit sharing with the clubs.
Last year, MASN placed about $100 million into a private escrow account pending its appeals in the case.
The rights fee dispute dates to 2012, when the Orioles and Nationals could not agree on TV rights fees, which MASN — which is about 80% owned by the Orioles and 20% by the Nationals — pays equally to both clubs. The Nationals, who occupy a larger and more lucrative market than the Orioles, initially contended that their rights were worth more than $100 million.
The Orioles and MASN have long argued that some Major League Baseball owners don’t like the arrangement made with MLB years ago that gave the Baltimore team majority control of the network. The Orioles said it deserved that control because the Nationals moved into a market — Washington and its suburbs — that had long been Orioles territory.
In 2015, the Orioles won a fleeting court victory when a New York judge ruled MASN did not receive an impartial hearing from an earlier MLB arbitration panel of club owners. The judge cited MASN’s argument that the same outside counsel — New York-based law firm Proskauer Rose — represented the Nationals, Major League Baseball and the three teams whose owners were on the arbitration panel during the years when the case was being considered.
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The case continued in the courts after that, with the Orioles seeking to have the dispute heard by an independent body.