Is Baltimore a Viable MLB Market without MASN fees?
The seemingly never-ending MASN lawsuit just got interesting again, on January 12th the Mayor and City Council of Baltimore submitted an amicus brief to the NY State Court of Appeals indicating that the “long-term viability” of the Orioles in Baltimore is at stake in the case (see images below). This is certainly a major development in this ongoing legal drama that has now spanned nearly a decade in time on one core issue that Angelos does not want to pay the Nationals the “fair market value” awarded. These last-minute maneuvers are drastically upping the consequences of the final ruling. Then on January 16th Orioles team owner John Angelos made a statement contradicting the claims as laid out in the brief: “The Orioles are going to be here for the long-term, we have been here and I’ve said many times, publicly, unsolicited, unprompted, we’re never going anywhere”.
And then last night (Feb 1st), the deadline passed for the Orioles to sign their previously negotiated option for a long-term 5-year extension to stay in Camden Yards in exchange for receiving up to $600 million in Maryland taxpayer-funded upgrades. All it needed was an Angelos signature which never happened.
BREAKING: The Orioles won’t exercise the five-year option in their lease, which now officially expires at the end of this year. The team hopes to have a new long-term agreement by midseason, a source told @sunjeffbarker. https://t.co/soTk9w4GKr
— Nathan Ruiz (@NathanSRuiz) February 1, 2023
Instead of signing the deal, the Orioles and the newly-elected Maryland Governor, Wes Moore, who is in his first month in office, had to issue a joint press release. Angelos and Moore jointly detailed their plans to continue to work on a new long-term deal. Why not sign that 5-year option and then tell the Maryland Stadium Authority, the official lessor of the stadium, that their intention is to negotiate a long-term lease? Is this all about business leverage? So what’s the truth? The sworn testimony submitted by the city or the declarative statement issued by the team owner?
MASN Case Recap
This lawsuit dates back to the telecast rights fees from 11-years ago in 2012, and they haven’t resolved any year counting forward. Nothing has been agreed to between the two sides in that timeframe nor has the first award to the Nationals for the period of 2012-2016 with an award of nearly $105 million. But there have been two RSDC awards of fees and the lower courts in the last three appeals have been in favor for the Nationals’ side to pay out the money. But the money sits in an escrow account, and not in the Nats’ hands.
Under the original contract, if either the Nationals or Orioles were unable to agree with MASN on the fair market value of the Club’s telecast fees, the Revenue Sharing Definitions Committee (RSDC) shall arbitrate the dispute by independently by determining the fair market value (FMV) of the Club’s local telecast rights. Seems simple enough, right? Not at all. The dispute here between the Nationals and MASN concerns the FMV for the television rights fees for the five-year period from 2012 to 2016. The Nationals contended at the time that their fair market value of their 2012 rights was roughly $109 million, while MASN valued those same rights at roughly $34 million. The RSDC awarded numbers much closer to what the Orioles’ controlled MASN wanted to pay the Nationals:
Here is the important Exhibit 2 from the original lawsuit presented in 2014: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=66tyxyVbc5j3nEqlV2lvTg==
Fast forward to 2023, and nothing has been settled or paid out, and the Orioles side filed another appeal in which “Oral arguments in the MASN case are scheduled for March 14.”, as first noted by @HalfStreetHeart on Twitter. This is a hearing in front of the NY State Court of Appeals to determine whether the MLB arbitration panel (RSDC) ruling of rights fees should stand, which would require the Orioles to pay the Nationals five years of previously owed rights fees and open the door for additional arbitration hearings to determine the next two resets, or whether the MLB panel was biased against the Orioles and so the terms of the original contract should be changed to require an arbitration panel completely independent of MLB.
The details and dollar values involved in the long and ugly MASN case saga can be found in numerous Talk Nats articles. The constant question has been whether the case is finally coming to a close, which sometimes appears to be a never ending black hole. The answer is that there might be a glimmer of hope. After the hearing on 3/14 it will take some time before a decision is rendered, which will certainly be followed by another round of appeals by the Orioles, but they are running out of options. If the US Supreme Court refuses to hear the case it’s over, the Nats will have prevailed. But remember, nothing has been resolved about 2017-forward, and that is how the Orioles could try to get the next bite at the apple. As you’ve seen, they are tenacious with fighting what they can in the courts.
One common complaint by Orioles fans throughout the court battles has been that the Nationals knew of the MASN contract before moving to DC, and therefore they should live up to the terms of the deal. Actually the Nats have as they accepted that original RSDC award even though it was much lower than they thought it should have been. The misconception is that the dispute is over the original contract as opposed to the contractually mandated MLB arbitration panel to determine the annual rights fees. Absolutely, the Nationals are not happy with the MASN deal, but they have 100 percent lived up to the terms of the contract as written.
It has been Peter Angelos, and now his son, John Angelos, who first and subsequently refused to pay the fees as owed per the amount set by the RSDC, and then Angelos demanded that the NY courts change the terms of the contract in a manner that has no precedent in arbitration law. Individual arbitors can be removed from a case if bias can be proven, but never has an entire forum for arbitration been forcibly set aside by a court. The Angelos family demanded this one-sided deal with MLB back in 2004 and 2005, and now like common deadbeats (writer’s opinion), they won’t pay what they owe, even though the first award of nearly $105 million is still sitting in an escrow account.
In the Nationals response to the amicus brief they refer to Baltimore’s claimed interest as “purely pecuniary“, 100 percent effort motivated by monetary gain for the city rather than adding any legal value to the case. Purely pecuniary, a very interesting phrase, one which could just as easily be applied to John Angelos and family. In the joint statement issued by the Orioles and Maryland tonight they spoke of the need to have a “continued conversation” on the next step for their partnership, but what do they possibly have to discuss other than more money flowing from the state to the team? $600 million is a heck of a lot of money for ballpark improvements at a time when the city is overrun by crime and poverty. Instead of taking the $600 million and saying thank you very much the Angelos family wants more.
Keep in mind, the Orioles revenue sharing dollars as a “small market team” as well as other forms of small market benefits from MLB, and they receive the lion’s share of TV rights from the Nationals with the profits from MASN shielded from the “small market” calculation. Essentially, the Orioles receive corporate welfare from the State of Maryland, and they put a low budget team on the field that gets celebrated for almost making the playoffs. Per The Athletic, the Orioles payroll is only $65 million this year. And yes, it was much less last year.
The question being asked is whether the show of hardship is a prelude to an excuse for moving the team out of Baltimore. The Angelos brothers are currently involved in a messy legal battle over their father’s fortune, one of the allegations from Louis Angelos is that his brother’s ulterior motive all along has been to move the team to Nashville, the city where John Angelos reportedly has a home with his wife since 2016. You know John’s famous wife, Margaret Valentine, from her top hit “Don’t Miss the Magic,” which served as the official anthem of the Baltimore Orioles in 2016 per Valentine’s biography on her company website.
Nashville is a growing city, nice weather, a state tax free landing spot for a lot of newly remote workers, a clear target for MLB expansion. Is that truly the ultimate goal in all of this? Wait until the MASN case requires hundreds of millions of dollars to be paid to the Nationals and then initiate ballpark discussions in Tennessee? Or based on the reluctance for MLB to allow teams to move cities is this all a big bluff to squeeze the city and state just a little harder to put more tax money in the Angelos family bank accounts? Who knows, but maybe in five years some of us will be looking into Orioles ticket plans as we sip whiskey sours while sitting on the back porch of our retirement spots down on the Cumberland River.