July 13, 2017- Today the Washington Nationals won a major legal victory when a New York State appeals court ruled the Nationals are entitled to have the amount of rights fees the team is paid for the television broadcast of its games be determined by a committee of Major League Baseball owners and executives.
The decision arises from a long-running dispute between the Nationals and the regional television sports network MASN, which is super-majority owned and wholly controlled by the Baltimore Orioles. MASN broadcasts both Nationals and Orioles games, pursuant to a 2005 agreement entered when MLB moved the former Montreal Expos to Washington. The agreement expressly provides that any unresolved fee disputes between the Nationals and MASN should be decided by MLB’s Revenue Sharing Definitions Committee (the “RSDC”), composed of three MLB team owners and executives appointed by the MLB Commissioner. The RSDC’s membership changes periodically.
In today’s decision, the Appellate Division ruled that MASN and the Orioles are bound by the contractual commitment they made to have rights fees disputes arbitrated before the RSDC. This will allow the Nationals to proceed to a new arbitration before the RSDC of the rights fees for 2012-2016, as well as an arbitration to determine the fees for the forthcoming five-year period of 2017-2021. The disputed amounts exceed more than $100 million for each of these five-year periods.
“The Nationals are gratified that the appeals court recognized the importance of enforcing contractual arbitration agreements,” said Stephen Neuwirth of Quinn Emanuel, who argued the appeal for the Nationals. “We look forward to finally having the rights fees determined in the forum the parties chose.”