Nationals, Orioles reach settlement on 2012-16 MASN rights fees

The Nationals and Orioles have settled their dispute regarding MASN rights fees between 2012-16, as first reported by Chelsea Janes and Ben Strauss of the Washington Post. The agreement comes two months after a New York appellate court ruled in favor of the Nationals and MLB as part of a longstanding legal battle with the O’s.

According to the Washington Post, the network is paying out a little less than $100M to each franchise. (Andy Kostka and Dylan Segelbaum of the Baltimore Banner specify the payment around $99.2M.) As Janes and Strauss note, the deal requires the network to pay equal rights fees to each organization. The payment still represents a win for Washington since the O’s have a much greater ownership stake in MASN.

The Nationals and Orioles jointly own the network, which carries local broadcasting rights for both clubs. The Baltimore organization has a majority share (presently around 76%, dropping to 67% by 2032). That came as part of the agreement between the Orioles and MLB to facilitate the relocation of the Expos from Montreal to Washington — into the Orioles’ territorial range — nearly two decades ago.

As part of that deal, the sides agreed to share telecasting money owed by MASN to the clubs for broadcasting rights. An arbitration panel was created to resolve possible disputes between the franchises in calculating those fees. After the sides failed to come to an agreement for the period covering 2012-16, the issue went to arbitration. 

The panel — a committee made up of representatives from three other MLB teams — ruled closer to the Nationals’ desired number than the Orioles had found appropriate (albeit nearer to the O’s proposed figure than Washington’s). Baltimore and MASN appealed, questioning the league’s impartiality.

A court found in the Nationals’ and league’s favor on that issue back in 2019. The court ruled the network owed the Nationals roughly $105M in unpaid rights fees. The Orioles appealed that decision, but the appellate court agreed there were no grounds for contesting the arbitration panel’s findings.

However, the appellate court found the lower court had overstepped its authority in awarding the $105M in past damages. That put the onus back on the franchises to calculate damages. They have apparently found the approximate $99.2M figure mutually agreeable.

To be clear, this does not permanently resolve the dispute between the organizations. They’re still divided on fees for the 2017-21 period. Janes and Strauss report that MLB is preparing to put that issue before its revenue sharing committee. The sides negotiate rights fees every half-decade, so they’ll also have to figure out the 2022-26 numbers in due time.

Finding a long-term solution could be especially welcome for the Washington franchise. The Lerner family announced in April 2022 they were looking into selling the team. Negotiations with a group led by Ted Leonsis were put on pause over the winter, in large part on account of the TV rights uncertainty.