21 July 2017
The New York State First Department Appellate Division voted 3-2to allow Major League Baseball owners and executives decide the ongoing dispute between the Washington Nationals and Baltimore Orioles. The teams are divided over how much compensation the Washington Nationals should receive from the Baltimore Orioles and their broadcasting entity, the Mid-Atlantic Sports Network, for television broadcast of the Nationals’ games.
In November 2015, a New York State Supreme Court threw out an MLB arbitration decision granting the Nationals $298 million from the Mid-Atlantic Sports Network (MASN) for the Nationals’ television rights from 2012-2016. MASN and Orioles argued the arbitration, conducted by the MLB’s Revenue Sharing Definitions Committee (RSDC), had “evident partiality,” since the law firm representing the Nationals has previously been hired by the MLB and the teams of the arbitrators.
The Appellate Division’s ruling will allow the RSDC to re-hear the dispute since the panel has a different makeup than in 2015. In addition, the court is upholding the contract the two sides signed back in 2005, vowing to use the RSDC for arbitration. The Nationals are calling this a major win. However, The appeals court did unanimously affirm the lower’s court decision to toss out the previous arbitration decision of $298 million. This allows Baltimore to also claim a small victory, claiming this is the first time an internal MLB arbitration was dismissed by a court.
The outcome of this case could be felt on the field. In the MLB, a team’s base payroll can increase depending on the amount of media money a team generates. The two teams are $100 million dollars apart , which could play an impact in their ability to field a championship line up.
The Orioles and MASN plan to appeal the decision allowing the dispute to be brought back to the MLB’s arbitration process. The Nationals cannot appeal the $298 million arbitration ruling being tossed for a second time, since that decision was unanimous.