INDEX NO.

652044/2014

FILED: NEW YORK COUNTY CLERK 05/27/2016 12:32 PM

NYSCEF DOC. NO. 739

RECEIVED NYSCEF: 05/27/2016

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
TCR SPORTS BROADCASTING HOLDING, LLP,

Index No. 652044/2014

(IAS Part 41; Marks, J.)

Petitioner,
(Motion Sequence No. 020)
-againstWN PARTNER, LLC; NINE SPORTS HOLDING, LLC;
WASHINGTON NATIONALS BASEBALL CLUB, LLC;
THE OFFICE OF THE COMMISSIONER OF BASEBALL;
and ALLAN H. BUD SELIG, AS COMMISSIONER OF
MAJOR LEAGUE BASEBALL,
Respondents,
-andTHE BALTIMORE ORIOLES BASEBALL CLUB and
BALTIMORE ORIOLES LIMITED PARTNERSHIP, in its
capacity as managing partner of TCR SPORTS
BROADCASTING HOLDING, LLP,
Nominal Respondents.

REPLY IN FURTHER SUPPORT OF MOTION FOR ORDER COMPELLING

ARBITRATION BEFORE REVENUE SHARING DEFINITIONS COMMITTEE
AND MEMORANDUM IN OPPOSITION TO CROSS-MOTION FOR STAY
QUINN EMANUEL URQUHART
& SULLIVAN LLP
51 Madison Avenue
New York, New York 10010
212-849-7000 (voice)
212-849-7100 (fax)
Attorneys for Respondent
Washington Nationals Baseball Club, LLC
May 27, 2016

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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT .....................................................................................................1
ARGUMENT...................................................................................................................................5
I.

II.

THE MOTION FOR AN ORDER COMPELLING ARBITRATION BEFORE

THE RSDC SHOULD BE GRANTED...............................................................................5
A.

MASN And The Orioles Are Contractually Obligated To Arbitrate The

Instant Dispute Before The RSDC But Have Refused To Do So............................5

B.

MASNs And The Orioles Remaining Objections To An Order

Compelling Arbitration Before The RSDC Are Irrelevant And Meritless. .............8

THE CROSS-MOTION FOR A STAY OF PROCEEDINGS SHOULD BE

DENIED.............................................................................................................................10
A.

MASN And The Orioles Fail To Carry Their Burden To Justify A Stay Of
Judicial And Arbitral Proceedings. ........................................................................11

B.

Further Delay Will Significantly Prejudice The Nationals And Unfairly

Benefit The Orioles................................................................................................18

CONCLUSION..............................................................................................................................25

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TABLE OF AUTHORITIES
Page
Cases
Alter v. Oppenheimer & Co. Inc.,
8 Misc. 3d 1008(A) (N.Y. Cnty. 2005)....................................................................................12
Arciniaga v. Gen. Motors Corp.,
460 F.3d 231 (2d Cir. 2006).....................................................................................................12
Asher v. Abbott Labs.,
307 A.D.2d 211 (1st Dept 2003) ............................................................................................13
Aviall, Inc. v. Ryder Sys., Inc.,
913 F. Supp. 826 (S.D.N.Y. 1996) ..........................................................................................16
Aviall, Inc. v. Ryder Sys., Inc.,
110 F.3d 892 (2d Cir. 1997)..............................................................................................15, 16
Bd. of Educ. of Bloomfield Cent. Sch. Dist. v. Christa Const., Inc.,
80 N.Y.2d 1031 (1992) ............................................................................................................12
Benihana, Inc. v. Benihana of Tokyo, LLC,
784 F.3d 887 (2d Cir. 2015).....................................................................................................12
Chimart Assocs. v. Paul,
66 N.Y.2d 570 (1986) ..............................................................................................................16
Crystal Pool AS v. Trefin Tankers Ltd.,
2014 WL 1883506 (S.D.N.Y. May 9, 2014) .............................................................................7
Da Silva v. Musso,
76 N.Y.2d 436 (1990) ........................................................................................................11, 15
De Shazo v. Hirschler,
282 A.D.2d 257 (1st Dept 2001) ............................................................................................13
Denney v. BDO Seidman, L.L.P.,
412 F.3d 58 (2d Cir. 2005).........................................................................................................5
Downing v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
725 F.2d 192 (2d Cir. 1984).......................................................................................................7
E.E.O.C. v. Waffle House, Inc.,
534 U.S. 279 (2002).................................................................................................................12

ii

3 of 31

Emery Air Freight Corp. v. Local Union 295,

786 F.2d 93 (2d Cir. 1986).......................................................................................................14
Emilio v. Sprint Spectrum, L.P.,
315 F. Appx 322 (2d Cir. 2009) ...............................................................................................7
Erving v. Virginia Squires Basketball Club,
349 F. Supp. 716 (E.D.N.Y. 1972) ..............................................................................15, 16, 17
Founders Ins. Co. v. Everest Nat. Ins. Co.,
41 A.D.3d 350 (1st Dept 2007) ..............................................................................................14
G Builders IV, LLC v. Madison Park Owner, LLC,
84 A.D.3d 694 (1st Dept 2011) ..............................................................................................15
Gov't Employees Ins. Co. v. Arciello,
129 A.D.3d 1083 (2d Dept 2015) ...........................................................................................12
Greater Miami Baseball Club Ltd. P'ship v. Nat'l League of Prof'l Baseball Clubs,
193 A.D.2d 513 (1st Dept 1993) ..............................................................................................5
Herbert v. City of New York,
126 A.D.2d 404 (1st Dept 1987) ............................................................................................15
LAIF X SPRL v. Axtel, S.A. de C. V.,
390 F.3d 194 (2d Cir. 2004).......................................................................................................7
Leong v. Goldman Sachs Grp. Inc.,
2016 WL 1736164 (S.D.N.Y. May 2, 2016) ...........................................................................12
Merit Ins. Co. v. Leatherby Ins. Co.,
714 F.2d 673 (7th Cir. 1983) ...................................................................................................17
Morris v. N.Y. Football Giants, Inc.,
575 N.Y.S.2d 1013 (N.Y. Cnty. 1991) ........................................................................15, 16, 17
Natl Football League Mgmt. Council v. Natl Football League Players Assn,
2016 WL 1619883 (2d Cir. Apr. 25, 2016) .........................................................................3, 17
Natl Hockey League Players Assn v. Bettman,
1994 WL 738835 (S.D.N.Y. Nov. 9, 1994).............................................................................17
Natl Union Fire Ins. Co. of Pittsburgh, PA v. Chopper Exp., Inc.,
2013 WL 3062533 (S.D.N.Y. June 19, 2013) ...........................................................................7
Nationwide Gen. Ins. Co. v. Invrs Ins. Co. of Am.,
37 N.Y.2d 91 (1975) ................................................................................................................12

iii

4 of 31

Nezry v. Haven Ave. Owner LLC,

28 Misc. 3d 1226(A) (N.Y. Cnty. 2010)..................................................................................12
PaineWebber Inc. v. Faragalli,
61 F.3d 1063 (3d Cir. 1995).......................................................................................................7
Piller v. Schwimmer,
135 A.D.3d 766 (2d Dept 2016) .........................................................................................4, 17
Olympia & York OLP Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
214 A.D.2d 509 (1st Dept 1995) ............................................................................................13
Rice Co. v. Precious Flowers Ltd.,
2012 WL 2006149 (S.D.N.Y. June 5, 2012) ...........................................................................14
Robert Stigwood Org., Inc. v. Devon Co.,
44 N.Y.2d 922 (1978) ..............................................................................................................11
In re SSL Intl, PLC,
44 A.D.3d 429 (1st Dep't 2007)...............................................................................................11
Sardanis v. Sumitomo Corp.,
279 A.D.2d 225 (1st Dep't 2001) .............................................................................................15
In re Siegel,
40 N.Y.2d 687 (1976) ................................................................................................................4
Telesat Canada v. Planetsky, Ltd.,
2013 WL 592668 (S.D.N.Y. Feb. 15, 2013)..............................................................................7
Valley Nat. Bank v. Spitzer,
31 Misc. 3d 1232(A) (Kings Cnty. 2011) ................................................................................11
Wallace v. Merrill Lynch Capital Servs., Inc.,
12 Misc. 3d 1153(A) (N.Y. Cnty. 2006)..................................................................................12
Warberg Opportunistic Trading Fund, L.P. v. GeoResources, Inc.,
112 A.D.3d 78 (1st Dep't 2013)...............................................................................................16
Weinrott v. Carp,
32 N.Y.2d 190 (1973) ..............................................................................................................13
Williams v. Natl Football League,
582 F.3d 863 (8th Cir. 2009) ...................................................................................................17
Winfrey v. Simmons Foods, Inc.,
495 F.3d 549 (8th Cir. 2007) ...................................................................................................17

iv

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Yonkers Contracting Co. v. Port Auth. Trans-Hudson Corp.,

87 N.Y.2d 927 (1996) ..........................................................................................................3, 17
Statutes and Rules
9 U.S.C. 4..............................................................................................................................1, 5, 8
CPLR 2201......................................................................................................................11, 13, 15
CPLR 5519(c) .............................................................................................................................15
Other Authorities
16 N.Y. Jur. 2d CANCELLATION OF INSTRUMENTS 56.................................................................16
Barry Svrluga, Manfred: Orioles, MASN ignoring fundamentals of revenue share
agreement with Nationals, WASHINGTON POST, May 19, 2016.................................................9

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PRELIMINARY STATEMENT
The issues presented in the two pending motions are narrow and straightforward.
First, the parties unambiguously agreed to arbitrate the underlying rights-fees dispute
before Major League Baseballs Revenue Sharing Definitions Committee (RSDC).

The

Nationals have replaced Proskauer as counsel for the RSDC arbitration with a firm that does not
concurrently represent MLB, the RSDC members, or their Clubsand, pursuant to this Courts
Decision and Order (Nov. 4, 2015) (Dkt. 639) (Decision and Order) and the 2005 Telecast
Agreement, the Nationals are thereby entitled to arbitrate before the RSDC.1 Thus, the only
question the Court need answer prior to granting the Nationals motion for an order compelling
arbitration is whether MASN and the Orioles have failed to comply with their arbitration
obligation. 9 U.S.C. 4. And the answer to that question is as unambiguous as the arbitration
agreement itself, for MASN and the Orioles have repeatedly demonstratedin correspondence,
in their conduct, and in their submissions to this Courtthat they will not willingly participate in
an RSDC arbitration. The prerequisites to an order compelling arbitration are thus met, and the
Nationals motion should be granted.
Second, the equities weigh decisively against MASNs and the Orioles cross-motion for
a stay pending appeal. Exceptionally strong public policies favor arbitration, and deciding the
single, limited question raised by the Nationals motion will not entail significant expenditure of

On May 26, 2016, the MLB Commissioner informed all MLB Club owners, CEOs and
presidents that he selected Mark Attanasio, owner of the Milwaukee Brewers; Kevin Mather,
President and a minority owner of the Seattle Mariners; and Mark Shapiro, President and CEO of
the Toronto Blue Jays, to comprise the RSDC. See Reply Affidavit of Ed Cohen (May 27, 2016)
at 17 at Ex. 2. The Nationals new counsel for arbitration before the RSDC, Quinn Emanuel,
does not represent any of these individuals or teams, See Reply Affirmation of Stephen R.
Neuwirth (May 27, 2016) (Neuwirth Reply Aff.) at 4-5, or Major League Baseball, see
Affirmation of Stephen R. Neuwirth (Jan. 21, 2016) (Dkt. 672) (Neuwirth Aff.) at 13.

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judicial resources.

MASNs and the Orioles mere desire to avoid RSDC arbitration is

insufficient as a matter of law to justify a stay. And on top of being legally insubstantial, any
purported benefits from a stay are entirely contingent on the remote and speculative possibility
that the Appellate Division could reverse this Courts refusal to direct the parties to an arbitration
forum other than the RSDCyet MASN and the Orioles identify no reason to think that the First
Department would undertake to rewrite the parties 2005 Telecast Agreement where this Court
did not. MASN and the Orioles attempt to recast this Courts refusal to direct the parties to a
new arbitration forum as a reluctant decision based solely on a lack of jurisdiction, but the
Decision and Order is clear and correct in finding MASNs and the Orioles effort to obtain a
new arbitral forum meritless and in contradiction of settled law.
In addition, delay in resolving the underlying dispute will cause significant harm to the
Nationals, who continue to be deprived of tens of millions of dollars in market-value rights fees
to which they will claim entitlement in the new RSDC arbitration. And such delay would also
unjustly enrich the Orioles at the Nationals expense. A stay pending completion of the appellate
processwhich will take many months to complete, and perhaps as much as a year or more
would greatly exacerbate these inequities while providing no countervailing benefit. The crossmotion should be denied.
MASN and the Orioles have little of substance to say either in response to the Nationals
motion to compel or in favor of their own cross-motion. Their brief is instead filled with
irrelevancies and naked attempts at misdirection and well-poisoning, none of which should
distract the Court from addressing the two specific issues that are actually presented for decision.

MASN and the Orioles contend that the Decision and Order did not order the parties

to arbitrate before the RSDC.

That entirely misses the point, which is that this Court

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authoritatively construed the 2005 Telecast Agreement to call for a new RSDC arbitration so
long as the Nationals retained new counsel that does not concurrently represent MLB or the
RSDC members or their Clubs. The Nationals fulfilled that condition, and properly demanded a
new RSDC arbitration. Because MASN and the Orioles failed to comply with that demand, the
Federal Arbitration Act (FAA) requires that they be ordered to do so.

MASN and the Orioles assert that the Nationals arbitration demand is premature

because MLB has not yet convened the RSDC. But that is untrue, because the only requirements
for an order compelling arbitration are met: there is a valid contract to arbitrate, but MASN and
the Orioles failed to honor their contractual obligation. MLB, for its part, has indicated that it
will set a hearing date and hold the arbitration once this Court decides the instant motions. That
is a reason for the Court to grant the motion to compel, not to deny it.

MASN and the Orioles attempt to relitigate issues relating to the RSDCs suitability

as a forum for resolving the underlying rights-fees dispute, but the Court already conclusively
rejected those arguments in the Decision and Order. That rejection was correct, not least because
MASN and the Orioles expressly agreed by contract to arbitrate before MLBs RSDC. The
Nationals are not seeking a return to the RSDC because it is unfairly biased, but because the
parties chose a Baseball-industry forum comprised of Club-affiliated arbitrators familiar with
issues like telecast rights fees. Under the FAA, MASN and the Orioleshaving voluntarily
agreed to an inside-Baseball arbitrationcan ask for no more impartiality than inheres in the
method they have chosen. Natl Football League Mgmt. Council v. Natl Football League
Players Assn, 2016 WL 1619883, at *17 (2d Cir. Apr. 25, 2016); see also, e.g., Yonkers
Contracting Co. v. Port Auth. Trans-Hudson Corp., 87 N.Y.2d 927, 929 (1996) (parties to an
arbitration contract are completely free to agree upon the identity of the arbitrators, and New

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York courts have therefore regularly refused to disqualify arbitrators on grounds of conflict of
interest or partiality even in cases where the contract expressly designate[s] a single arbitrator
employed by one of the parties) (internal quotation marks omitted); Piller v. Schwimmer, 135
A.D.3d 766, 768 (2d Dept 2016) (An arbitrator designated by parties to a private contract may
have a preexisting business or social relationship with a party to the contract, and that fact,
without more, is not sufficient to disqualify the arbitrator) (citing In re Siegel, 40 N.Y.2d 687,
690 (1976)). The evident partiality issues previously resolved by this Court are not open to
reargument, and in any event provide no basis either to defer or deny the motion to compel.

MASN and the Orioles spend many pages arguing that the Nationals are not harmed

by being deprived of tens of millions of dollars in current revenue. But it is obvious that a
baseball franchise with large annual salary expenditures is harmed when a direct competitor
withholds funds that could be used to sign players, pay for stadium improvements, and so on.
Regardless of the limited rights-fee and profits-distribution payments the Nationals have
received from MASN, the Nationals are entitled to market-value rights fees far greater than those
that MASN is currently paying. Without those monies, the Nationals (despite operating a strong
business) have been forced to fund payroll and other expenses from the Clubs own cash
reserves, and may soon be forced to seek separate or restructured financing. This is a significant
and ongoing injury that can only be remedied by prompt arbitration in the parties chosen forum.

MASN asserts that it has paid the Nationals the full amount of telecast rights fees

due as calculated under MASNs version of the Bortz methodology, but the Decision and
Order expressly rejected this precise argumentruling that the RSDC was entitled to determine
that MASNs version of the Bortz methodology was inconsistent with the RSDCs standard
methodology. The amount of rights fees due (including how to determine them) is not for

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MASN to decide unilaterally, but is precisely the issue to be arbitrated before the RSDC.
The Nationals respectfully submit that the Court should deny the motion to stay and grant
the motion to compel arbitration, so that the parties may resolve their dispute in the manner they
elected in the 2005 Telecast Agreement.
ARGUMENT
I.

THE MOTION FOR AN ORDER COMPELLING ARBITRATION BEFORE THE

RSDC SHOULD BE GRANTED
A.

MASN And The Orioles Are Contractually Obligated To Arbitrate The

Instant Dispute Before The RSDC But Have Refused To Do So.

As MASN and the Orioles acknowledge (MASN Opposition Memorandum (Dkt. 738)
(MASN Br.), at 12), a court should issue an order compelling arbitration where (1) there is a
binding and applicable agreement to arbitrate a dispute, but (2) one side manifests its intention
not to arbitrate as required by the agreement. See Nationals Opening Memorandum (Dkt. 671)
(Nationals Br.), at 12. Each of these two requirements is met here. MASN and the Orioles
should accordingly be compelled to arbitrate in accordance with the terms of the 2005 Telecast
Agreement, as correctly interpreted by the Decision and Order.
First, MASN and the Orioles do not dispute (see MASN Br. 12-13) that paragraph 2.J.3
of the 2005 Telecast Agreement (5/23/2014 Hall Aff. Ex. 1 (Dkt. 204), at 8) creates a binding
agreement to arbitrate before the RSDC any dispute (such as the present one) regarding the fair
market value of the [Telecast] Rights. MASN and the Orioles must abide by their voluntary
election of the RSDC as the sole forum for resolving this dispute. See, e.g., 9 U.S.C. 4;
Denney v. BDO Seidman, L.L.P., 412 F.3d 58, 68-69 (2d Cir. 2005) (arbitration should be
compelled where dispute clearly falls within arbitration agreement); Greater Miami Baseball
Club Ltd. Pship v. Natl League of Profl Baseball Clubs, 193 A.D.2d 513, 514 (1st Dept 1993)

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(affirming order compelling arbitration pursuant to unambiguous arbitration agreement despite

challenge to tribunals impartiality).
Second, MASNs and the Orioles suggestion (MASN Br. 9; see also id. at 12) that they
have not demonstrated [an] unambiguous refusal to arbitrate is farcical.

The Nationals

requested that an RSDC arbitration be convened (Neuwirth Aff., Ex. 1 (Dkt. 673)), but MASN
and the Orioles did not even gesture towards commencing the new proceeding. Instead, they
unequivocally asserted that they do not and will not accept that the RSDC can fairly arbitrate
this dispute now or at any time in the foreseeable future. Neuwirth Aff., Ex. 2 (Dkt. 674), at 1.
They then went on to expressly dispute that the RSDC is the proper forum for new
proceedings, to assert that the Nationals demand is ill-considered, and to insist that rather
than proceed to an RSDC arbitration, the Commissioner, MLB and the Nationals should meet
and confer with MASN and the Orioles to discuss a fair, neutral and objective forum [other than
the RSDC] for the resolution of this dispute. Id. at 2. In subsequent correspondence, MASN
and the Orioles asserted that their objections to the RSDC procedure are incurabl[e] and that
[i]t is a fiction to suggest that the RSDC can arbitrate a telecast rights fees dispute between
the parties in a fair, neutral and objective matter, reiterating that instead of proceeding to the
RSDC, the parties should agree to meet and confer concerning the submission of this dispute
to a different tribunal. Neuwirth Aff., Ex. 4 (Dkt. 676) (emphasis added).
Even after the parties in-person meeting (held January 20, 2016, Neuwirth Aff. 23)at
which the Nationals expressed openness to suggestions for procedures that might be put in place
at the new RSDC arbitration to allay MASNs and the Orioles concernsMASN and the
Orioles have maintained their position that they will not voluntarily return to arbitration before
the RSDC under any circumstances. Indeed, MASN and the Orioles now insist again that their

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well known position is that the RSDC is fundamentally incapable of fairly resolving the
parties dispute (MASN Br. 13), and continue to contend that this dispute should be arbitrated
before a neutral forum, such as AAA rather than the RSDC (id. at 9; see also id. at 12 (similar)).
MASN and the Orioles do not explain how their opposition to a new RSDC arbitration
repeatedly expressed in correspondence, in person, and in court filingscould be understood as
anything other than an absolute and unambiguous refusal to arbitrate in accordance with the 2005
Telecast Agreement and the Nationals demand.
MASN and the Orioles assert (MASN Br. 12)citing a single case more than three
decades oldthat an order compelling arbitration cannot issue unless they either commence[]
litigation or [are] ordered to arbitrate this dispute by the [RSDC] and fail[] to do so. Downing v.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 725 F.2d 192, 195 (2d Cir. 1984). But as the
Nationals showed (Nationals Br. 12), subsequent case law has made clear that the FAA does not
require the pointless formalism of convening an arbitral tribunal just to issue an order that
inevitably will be disregarded: conduct of any kind that unambiguously manifest[s] an intention
not to arbitrate is sufficient. LAIF X SPRL v. Axtel, S.A. de C. V., 390 F.3d 194, 198 (2d Cir.
2004) (quoting PaineWebber Inc. v. Faragalli, 61 F.3d 1063, 1066 (3d Cir. 1995)); accord
Emilio v. Sprint Spectrum, L.P., 315 F. Appx 322, 325 (2d Cir. 2009) (the district court did not
err in interpreting [partys] behavior as a refusal to arbitrate where it ceased to participate in
ongoing arbitration and sought injunction dismissing arbitration claims).

Thus, failure to

respond to requests for appointment of an arbitrator suffices to warrant an order compelling

arbitration, Crystal Pool AS v. Trefin Tankers Ltd., 2014 WL 1883506, at *3 (S.D.N.Y. May 9,
2014), as does failure to respond to an arbitration demand, Telesat Canada v. Planetsky, Ltd.,
2013 WL 592668, at *3 (S.D.N.Y. Feb. 15, 2013); see also, e.g., Natl Union Fire Ins. Co. of

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Pittsburgh, PA v. Chopper Exp., Inc., 2013 WL 3062533, at *1 (S.D.N.Y. June 19, 2013)
(similar). MASNs and the Orioles failure to arbitrate before the RSDC is even clearer than in
those circumstances.

Beyond simply opposing the Nationals arbitration demand, they

repeatedly and affirmatively refused to participate in a new RSDC proceedinglaying out in

correspondence, in person, and in this Court their baseless objections to the contractually-elected
arbitration forum.
MASNs and the Orioles opposition to the instant motion only confirms their position
that no RSDC arbitration should occur, in plain disregard of the 2005 Telecast Agreement
which the courts lack authority to re-writ[e] (Decision and Order at *13 n.21). This is an
unambiguous and unjustifiable breach of an express agreement to arbitrate, which this Court
should remedy under the authority of 9 U.S.C. 4.
B.

MASNs And The Orioles Remaining Objections To An Order Compelling

Arbitration Before The RSDC Are Irrelevant And Meritless.

MASN and the Orioles raise three other arguments in purported support of their
opposition to the motion to compel arbitration, but none is availing.
First, MASN and the Orioles assert (MASN Br. 9, 10-12) that this Court has not yet
order[ed] the parties back to arbitration in the RSDC.

But MASN and the Orioles

misunderstand the Nationals argument and the import of the Decision and Order. The Nationals
do not contend that the Court has already ordered a new RSDC arbitrationif it had, the instant
motion would be one for a finding of contempt, not one for an order compelling arbitration.
Rather, the Decision and Order held, correctly and authoritatively, that the 2005 Telecast
Agreement binds the parties to arbitrate the rights-fees dispute before the RSDC, rejecting
MASNs and the Orioles objections to that forums propriety. The Court expressly found
unavailing MASNs and the Orioles argument that the matter should be sent to a different
8

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tribunal, explaining that re-writing the parties Agreement is outside [the Courts] authority.
Decision and Order at *13 n.21. The Decision and Order thus establishes, as the law of the case,
that MASN and the Orioles are contractually obligated to arbitrate before the RSDC so long as
the Nationals retain counsel who do not concurrently represent MLB or the individual
arbitrators and their clubs. Id. The Nationals have retained such counsel, dispelling the sole
barrier to RSDC arbitration that the Court identified, and are therefore entitled to arbitrate the
instant dispute before the RSDC pursuant to the 2005 Telecast Agreement. Indeed, as noted
(supra, at 5), MASN and the Orioles do not contest this contractual obligation in their brief.
Second, MASN and the Orioles wrongly complain (e.g., MASN Br. 6 n.6, 21-22) that the
RSDC is purportedly a biased forum. This Court has already rejected those arguments. The
Court found that MLBs $25 million advance to the Nationals was only meant to partially
ameliorate the harms caused by MASNs refusal to pay market-value rights fees, and is no
ground to conclude that the RSDC will favor the Nationals in a new arbitration. See Decision
and Order at *8-9.

And the Courtfully aware of the MLB Commissioners May 2015

statements (on which MASN and the Orioles now again rely)found no misconduct related to
MLBs involvement in the arbitration. See id. at *7; see also Dkt. 619 (MASN Letter to Court
(May 22, 2015), arguing that MLB Commissioners public comments reflected bias). More
recently, the Commissioner has defended the RSDC as a forum, without manifesting any bias as
to the result of an arbitration there, stating: The fundamentals are that the Orioles agreed that
the RSDC would set the rights fees for MASN and the Orioles every five years. The Orioles have
engaged in a pattern of conduct designed to avoid that agreement being effectuated.2 MLBs

Barry Svrluga, Manfred: Orioles, MASN ignoring fundamentals of revenue share agreement
with Nationals, WASHINGTON POST, May 19, 2016, https://www.washingtonpost.com/news/
9

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position has been that MASN will be required to pay what the RSDC determines to be the
market value of the Nationals rights fees, not that the RSDC should issue any particular award.
Furthermore, the Nationals new counsel for RSDC arbitration do not, as noted above,
represent MLB, or any of the RSDC members, or any of their teams. See p. 1 n.1, supra; see
also Neuwirth Aff. 13; Neuwirth Reply Aff. 4-5.
Third, MASN and the Orioles noted (MASN Br. 13) that MLB had not yet set a date for
the new RSDC arbitration. On May 27, 2016, however, outside counsel for MLB notified
counsel for the Nationals and MASN that given that the pending motions to be considered by
Judge Marks will be fully briefed by June 17, please be advised that, absent a judicial order
preventing MLB from convening such proceedings, a hearing to determine the Nationals and
Orioles rights fees for the 2012-2016 period will be held before the Revenue Sharing
Definitions Committee during the first week of August 2016. See Neuwirth Reply Aff. Ex. 1.
II.

THE CROSS-MOTION FOR A STAY OF PROCEEDINGS SHOULD BE DENIED

Unable to show that they should not be compelled to arbitrate under the 2005 Telecast

Agreement, MASN and the Orioles seek to delay the inevitable by requesting a stay of
proceedings pending determination of the appeals. But that process will take at least many
months to complete, and MASN and the Orioles have not carried their heavy burden to justify
such a lengthy stay. This Courts decision of the single straightforward question presented by
the Nationals motion will require no more than a de minimis expenditure of judicial resources,
and any supposed burden of arbitrating in the agreed-upon RSDC forum is not legally
significantand is certainly insufficient to overcome the powerful public interest favoring

sports/wp/2016/05/19/manfred-orioles-masn-ignoring-fundamentals-of-revenue-shareagreement-with-nationals/.
10

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enforcement of unambiguous agreements to arbitrate such as the 2005 Telecast Agreement.

What is more, any purported benefit is entirely contingent on the assumption that the First
Department will reverse this Court and require arbitration of the underlying dispute outside the
RSDC; but MASN and the Orioles identify neither any error in the Decision and Order nor any
reason to believe that the Appellate Division would deviate from New York contract law.
MASN and the Orioles are also wrong to suggest that a stay is appropriate on the ground
that the Nationals and MLB have noticed cross-appeals.

The cross-appeals may yet be

withdrawn, and the Nationals cross-appeal is expressly conditional (see Nationals Br. 3-4 n.3)
the Appellate Division would reach it only in the unlikely event that it were to hold that a new
arbitration should take place in a forum other than the RSDC. Finally, while the Nationals are
under no obligation to prove that a stay would be prejudicialit is up to MASN and the Orioles
to justify a stay of proceedings, not the other way aroundin fact any further postponement of
an RSDC hearing will impose significant additional burdens on the Nationals. MASN and the
Orioles have done nothing to minimize these burdens. The equities weigh heavily in favor of
proceeding with a new RSDC arbitration, and the cross-motion for a stay should be denied.
A.

MASN And The Orioles Fail To Carry Their Burden

To Justify A Stay Of Judicial And Arbitral Proceedings.

MASN and the Orioles have no entitlement to a stay pending their appeals. Da Silva v.
Musso, 76 N.Y.2d 436, 443 n.4 (1990). Rather, they must demonstrate that this is a proper
case for such relief, CPLR 2201, and therefore must bear the burden of establishing the
necessity of a stay in order to avoid prejudice, Valley Nat. Bank v. Spitzer, 31 Misc. 3d 1232(A)
(Kings Cnty. 2011) (citing Robert Stigwood Org., Inc. v. Devon Co., 44 N.Y.2d 922, 923
(1978)); see also, e.g., In re SSL Intl, PLC, 44 A.D.3d 429, 430 (1st Dept 2007) (party seeking
to stay arbitration bears the burden of showing sufficient facts to establish justification for the
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stay); Govt Employees Ins. Co. v. Arciello, 129 A.D.3d 1083, 1084 (2d Dept 2015) (similar).
The question whether a case is proper for a stay is at the courts discretion, Nezry v. Haven
Ave. Owner LLC, 28 Misc. 3d 1226(A) (N.Y. Cnty. 2010), but the court must consider all
factors when determining whether to grant a stay, including any potential prejudice to a party,
Wallace v. Merrill Lynch Capital Servs., Inc., 12 Misc. 3d 1153(A) (N.Y. Cnty. 2006); see also,
e.g., Alter v. Oppenheimer & Co. Inc., 8 Misc. 3d 1008(A) (N.Y. Cnty. 2005) (stay determination
involves a weighing of the equities).
MASN and the Orioles fail to justify their request for a stay. At the outset, since it is
clear that the rights-fees dispute is subject to RSDC arbitration, the effect of granting a stay
would be to enjoin a properly demanded arbitral proceeding. Public policy, both state and
federal, weighs heavily against such a result. As the Court of Appeals has repeatedly explained,
arbitration serves the valuable goals of conserving the time and resources of the courts and the
contracting parties, Nationwide Gen. Ins. Co. v. Invrs Ins. Co. of Am., 37 N.Y.2d 91, 95 (1975),
and is therefore a favored method of dispute resolution in New York, Bd. of Educ. of
Bloomfield Cent. Sch. Dist. v. Christa Const., Inc., 80 N.Y.2d 1031, 1032 (1992). Federal law,
embodied in the FAA, is in accord: it is difficult to overstate the strong federal policy in favor
of arbitration. Arciniaga v. Gen. Motors Corp., 460 F.3d 231, 234 (2d Cir. 2006); see also, e.g.,
Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887, 901 (2d Cir. 2015) (both federal and
New York law favor[] and encourage[] arbitration).
These strong public policies require giving prompt and predictable effect to clear
arbitration agreements. Thus, the public interest is served by enforcing parties agreements to
arbitrate according to their terms. Leong v. Goldman Sachs Grp. Inc., 2016 WL 1736164, at *3
(S.D.N.Y. May 2, 2016) (citing E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 289 (2002)). A

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party to a dispute governed by an arbitration agreement may not unilaterally evade the stipulated
forum, Olympia & York OLP Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 214 A.D.2d
509, 511-12 (1st Dept 1995), and courts should prevent[] parties to [arbitration] agreements
from using the courts as a vehicle to protract litigation, De Shazo v. Hirschler, 282 A.D.2d 257,
258 (1st Dept 2001) (quoting Weinrott v. Carp, 32 N.Y.2d 190, 199 (1973)).
MASN and the Orioles identify no case in which a court issued a Section 2201 stay with
the effect of blocking arbitral proceedings. Nor do they offer anything that could overcome the
powerful public policies favoring enforcement of arbitration agreements and disfavoring
protracted litigation. They instead argue that vague precepts of comity, orderly procedure, and
judicial economy favor a stay (MASN Br. 14, 16 (citing Asher v. Abbott Labs., 307 A.D.2d 211
(1st Dept 2003)), asserting that that their pending appeals and the Nationals motion to compel
converge on the same issue: whether the Court has the authority to direct rehearing before a
forum other than the RSDC, and if so, whether the Court should exercise that authority here (id.
at 15). But that is incorrect. The proceedings cannot converge on that issue, because the only
question raised by the Nationals motion is whether MASN and the Orioles have failed to
arbitrate (see supra, at 5-8). The law of the case is that re-writing the parties agreement to
allow arbitration outside the RSDC is outside of [the Courts] authority. Decision and Order at
*13 n.21.
MASN and the Orioles are also wrong to suggest (MASN Br. 16) that the pending
appeals could dispose of, or reduce, the issues raised by the Nationals Motion. Again, the
only issue presented by the Nationals motion is whether MASN and the Orioles have failed to
arbitrate. Deciding that issue now would not require any substantial expenditure of judicial
resources: the motion to compel is fully briefed, there is no dispute about the governing legal

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principles, and there is neither a need for substantial record review nor any question about what
MASN and the Orioles have said in response to the Nationals arbitration demands. Determining
whether MASN and the Orioles have failed to arbitrate in the RSDC will be swift and easy.
Nor could a stay be justified on grounds that it would prevent duplication of effort and
waste of judicial resources associated with the new RSDC arbitration (see MASN Br. 15).
Conducting a new private arbitration will not entail any duplication of judicial effort or
expenditure of judicial resources. And any costs that MASN and the Orioles might incur in
connection with the new RSDC proceeding cannot justify preventing the arbitration from going
forward, for it is settled that arbitration by itself imposes no [legally recognized] injury to the
resisting party. Emery Air Freight Corp. v. Local Union 295, 786 F.2d 93, 100 (2d Cir. 1986),
cited in Founders Ins. Co. v. Everest Nat. Ins. Co., 41 A.D.3d 350, 351 (1st Dept 2007). See
also, e.g., G Builders IV, LLC v. Madison Park Owner, LLC, 84 A.D.3d 694, 695 (1st Dept
2011) (reversing stay of arbitration; the supposed increased costs of the arbitration are not the
type of irreparable injury that warrant injunctive relief); Rice Co. v. Precious Flowers Ltd.,
2012 WL 2006149, at *6 (S.D.N.Y. June 5, 2012) (it is well settled that [t]he monetary cost of
arbitration ... does not impose [a] legally recognized irreparable harm justifying a stay of
arbitration) (quoting Emery, 786 F.2d at 100). A stay would thus neither materially benefit
judicial economy, nor relieve any party of any cognizable prejudice. Indeed, going forward with
the new arbitration now will in all probability hasten the termination of this litigation, by
allowing the parties to complete their contractually-elected dispute-resolution process.
The purported benefits to be gained from a stay are not only legally insignificant, but are
also remote, highly speculative, and entirely contingent on MASN and the Orioles prevailing on
appeal. Such speculative and contingent grounds cannot support a stay. See, e.g., G Builders, 84

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A.D.3d at 695 (speculative injury could not justify injunction staying arbitration); Sardanis v.
Sumitomo Corp., 279 A.D.2d 225, 231 (1st Dept 2001) (speculative outcome in related
proceeding did not justify stay). Specifically, unless the Appellate Division reverses and orders
the parties to arbitrate outside the RSDC, there is no possible gain to be had from delaying
arbitration. But as this Court explained (Decision and Order at *13 n.21), New York law does
not permit a court to re-write an arbitration agreement. MASN and the Orioles offer no reason to
think that the Appellate Division would conclude otherwise.

[T]he appeal is meritless,

Herbert v. City of New York, 126 A.D.2d 404, 407 (1st Dept 1987), and the motion for a stay
pending its resolution should be deniedregardless of the cross-motions invocation of CPLR
2201 rather than 5519(c). Cf. Da Silva, 76 N.Y.2d at 443 n.4 (the court considering the stay
application may consider the merits of the appeal).3
MASN and the Orioles offer no new or meritorious argument that this Court committed
reversible error in declining to impose a new arbitration forumnor could they, given that an
agreement to arbitrate before a particular arbitrator may not be disturbed, unless the agreement
is subject to attack on general contract principles. Aviall, Inc. v. Ryder Sys., Inc., 110 F.3d 892,
895 (2d Cir. 1997) (emphasis added). MASN and the Orioles do not even attempt to show that
the 2005 Telecast Agreement is in any way subject to attack on general contract principles, but
instead merely recycle (MASN Br. 17-18) the decades-old Morris and Erving cases, of which
this Court is already aware. See Morris v. N.Y. Football Giants, Inc., 575 N.Y.S.2d 1013, 1014
(N.Y. Cnty. 1991); Erving v. Virginia Squires Basketball Club, 349 F. Supp. 716, 719 (E.D.N.Y.

MASN and the Orioles imply (MASN Br. 17) that consideration of the merits of the appeal is
forbidden where a stay is sought under CPLR 2201, but they cite no case so holding. And
here, the purported gains to be obtained from the stay are entirely dependent on the outcome of
the appeals, so the appeals merits are necessarily relevant to the Courts ruling.
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1972). Those decisions are not binding on (or likely to be persuasive to) the First Department,
and are in any event wholly inapposite. For one thing, both cases involved agreements calling
for the league commissioner himself to act as a neutral arbitrator; the courts ordered remand to
different arbitrators because the commissioner in each case was too biased to serve that role. See
Morris, 575 N.Y.S.2d at 1017 (NFL Commissioner could not arbitrate between players and clubs
because he would favor the clubs); Erving, 349 F. Supp. at 719 (NBA Commissioner could not
arbitrate because he had a close direct relationship with one of the parties). Here, by contrast, the
RSDC (not MLB or the Commissioner) will arbitrate the dispute, and MASN and the Orioles
identify no basis to expect that the First Department will conclude that purported bias among the
RSDCs members could foreclose that tribunal as an arbitral forum.4 To the contrary, the
Nationals have already cured the only ground of evident partiality that this Court identified.
Moreover, Morris and Erving turned on the necessity of reforming of the arbitration
contracts, because an intervening event subverted the parties selection of a neutral arbitrator.
Aviall, Inc. v. Ryder Sys., Inc., 913 F. Supp. 826, 834 (S.D.N.Y. 1996), affd, 110 F.3d 892 (2d
Cir. 1997).5 Reformation is an extraordinary remedy under New York law, 16 N.Y. JUR. 2D
CANCELLATION

OF INSTRUMENTS

56, available only on an unambiguous showing, by clear,

positive and convincing evidence, that the parties meant to make a contract other than the one
memorialized in their writing, Warberg Opportunistic Trading Fund, L.P. v. GeoResources, Inc.,
112 A.D.3d 78, 85-86 (1st Dept 2013); see also, e.g., Chimart Assocs. v. Paul, 66 N.Y.2d 570,
574 (1986). MASN and the Orioles have never made and could never make such a showing with
4

Nor indeed has there been any suggestion that MLB itself is biased in favor of anything other
than confirmation of an arbitral award issued under its auspices. See supra, at 9-10.
5

See also Aviall, 110 F.3d at 896 (decisions such as Erving merely manifest the FAAs
directive that an agreement to arbitrate shall not be enforced when it would be invalid under
general contract principles).
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respect to the 2005 Telecast Agreement. There is no evidence that the parties intended to submit
rights-fees disputes to any forum other than the RSDC. The parties were entitled to select such
an inside-Baseball arbitration tribunaland, having done so, MASN and the Orioles can ask for
no more impartiality than inheres in the method they have chosen. Natl Football League
Mgmt. Council, 2016 WL 1619883, at *17 (citing Williams v. Natl Football League, 582 F.3d
863, 885 (8th Cir. 2009); Winfrey v. Simmons Foods, Inc., 495 F.3d 549, 551 (8th Cir. 2007));
see also, e.g., Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 679 (7th Cir. 1983) (Posner, J.)
(similar; industry arbitrator is permitted to be precommitted to a particular substantive
position); Natl Hockey League Players Assn v. Bettman, 1994 WL 738835, at *13, *18
(S.D.N.Y. Nov. 9, 1994) (similar; distinguishing Morris and Erving); Yonkers Contracting, 87
N.Y.2d at 929 (similar; New York law); Piller, 135 A.D.3d at 768 (similar).
Finally, that the Nationals and MLB filed notices of cross-appeal provides no basis to
decline to decide the motion to compel arbitration. Neither cross-appeal has been perfected, and
they may yet be withdrawn. Moreover, as the Nationals explained (Nationals Br. 3-4 n.3), the
First Department need not reach the Nationals cross-appeal except in the unlikely event it rules
that a finding of supposed bias requires appointment of an arbitrator other than the RSDC.
MASN and the Orioles contend (MASN Br. 16) that this position makes little sense, but it is in
fact quite clear: The Nationals desire to re-arbitrate in the RSDC as per the 2005 Telecast
Agreement, and intend to challenge this Courts finding of evident partiality only if the Appellate
Division first holds that the remedy for such a finding must be to order arbitration in a different
forum. Because the First Department is unlikely to so hold in the face of controlling, contrary
New York and federal law, it is unlikely even to consider the Nationals cross-appeal. In any
event, the cross-appeals could not justify a stay for the same reasons that MASNs and the

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Orioles appeals cannot do so: the stay is contrary to public policy (supra, at 12-13) and would
significantly harm the Nationals (infra, at 18-25), but would neither benefit judicial economy nor
avert any legally substantial burden. And any grounds offered by MASN and the Orioles for
granting a stay are speculative and contingent. The Court thus should deny a stay and proceed to
grant the Nationals motion for an order compelling a new RSDC arbitration.
B.

Further Delay Will Significantly Prejudice The

Nationals And Unfairly Benefit The Orioles.

MASNs and the Orioles cross-motion for a stay also should be rejected for the
additional reason that the relief they have requested would produce extraordinarily inequitable
results. Further delay in proceedings will mean further delay in the Nationals receipt of the fairmarket-value telecast-rights fees to which they are entitled under the 2005 Telecast Agreement,
negatively impacting the Nationals ability to compete for free-agent players, to complete
stadium-improvement projects, and otherwise to run a successful baseball Club. Cohen Aff.
(Dkt. 683) 11; Cohen Reply Aff. 4-7.

Conversely, MASNs retention of the difference

between its unilaterally-calculated, Bortz method fees and the market-value fees to which the
Nationals are entitled provides a massive windfall to the Orioles by inflating MASNs profits
to which the Orioles are entitled to a supermajority share.

And these inequities will be

exacerbated if MASN and the Orioles can continue to refuse to arbitrate before the RSDC,
because the time has already arrived to determine the rights fees to be paid the Nationals for the
next five-year period, beginning in 2017. Assuming (reasonably) that MASN and the Nationals
will again dispute the amount of rights fees to be paid over that period, the 2005 Telecast
Agreement again calls for such a dispute to be resolved by arbitration before the RSDC.
As the Nationals have explained, even accounting for the $25 million advance from MLB
to the Nationals in 2013, MASNs unilateral decision to pay the Nationals rights fees for the
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2012-2016 period according to the Bortz-style formula that the Orioles advanced in the first
arbitration (but which the RSDC rejected as inconsistent with its standard methodology) has to
date deprived the Nationals of at least $40 million that they would be due under a fair market
valuation of their rights, with an additional shortfall of at least $20 million by the end of 2016.
See Cohen Aff. 8-10; Cohen Reply Aff. 3.6 Being deprived of these revenues has had
serious negative impacts on the Nationals, and will continue to do so in the future. See Cohen
Aff. at 11-12; Cohen Reply Aff. 4-13. Lacking these revenues, the Nationals have been
forced to fund payroll and other expenses from their reserves, and further delay could require the
Nationals to seek new financingentailing additional unrecoverable costs. Cohen Aff. 11;
Cohen Reply Aff. 6. MASNs contention that a baseball franchise with large annual salary and
other operational expenses is not financially harmed when a direct competitor, year after year,
withholds upwards of $20 million in annual cash payments is not credible.
MASN tries to sidestep this obvious and ongoing injury by arguing (MASN Br. 18-20)
that the rights fees it has unilaterally elected to pay the Nationals represent the full amount of
telecast rights fees due under Section 2.J.3 of the 2005 Telecast Agreement. But the contract
provides that the fair market value of the Nationals telecast rights fees shall be determined
by the [RSDC] using the RSDCs established methodology for all other related party telecast
agreements in the industry (Dkt. 204, at 8 (emphasis added)), and MASN entirely ignores that
this Courts Decision and Order (at *5-6) already rejected MASNs arguments that the 2005
6

MASN cites (MASN Br. 20-21) MLBs $25 million advance to the Nationals in August 2013
to argue that the Nationals cannot claim financial injury, but that payment was only intended to
cover the difference between what MASN paid and what the RSDC was expected to award for
2012-2013, less certain adjustments. See Dkt. 452; 10/20/14 Cohen Aff. (Dkt. 328) 22. The
gap has not been filled even on a temporary basis with respect the remaining three years to be
covered by the RSDC arbitration now at issue, leaving the Nationals at least $60 million short of
the fair market value of their rights fees through 2016.
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Telecast Agreement required the RSDC to adopt MASNs valuation of the Nationals telecast
rights based on MASNs own version of the Bortz methodology.
Moreover, it is implausible to think that the RSDC would adopt MASNs version of the
Bortz methodology in a new arbitration. This is not because the RSDC is in any way biasedits
original award was far closer to MASNs proposal than to the Nationals proposal.7 Rather, as
the RSDCs original award found (Dkt. 330, at 4-8), MASNs version of the Bortz methodology
is not consistent with the RSDCs established methodology, because it wrongly focuses on
protecting MASNs desired 20% profit margin rather than on ascertaining the true market value
of the Nationals telecast rights. And MASNs continued assertion that the Nationals rights fees
are to be determined based on a Bortz method guaranteeing a 20% profit margin to MASN
also cannot be reconciled with (among other things) the 2006 Congressional testimony of
Orioles owner Peter Angelos, offered shortly after the 2005 Telecast Agreement had been
entered. At that time, Mr. Angelos testified that the Nationals rights fees would be determined
using a comparative approach like the one that the RSDC ultimately adopted:
If at any time the Nationals would be dissatisfied with the fee structure, the rights
fee structure, they have a right to complain to Major League Baseball and demand
that a survey be made to guarantee that fair market value payments are being
made for the rights fees for the rights to their games.
Dkt. 338, at 42 (emphasis added). Recent developments show that the Nationals rights are
worth more than what the RSDC originally awarded. See First Bevilacqua Aff. (Dkt. 349) 49-

The RSDC Award, with an average annual value over the 2012-2016 period of $60 million, is
on average only about $20 million more per year than the amount sought by MASN, but is about
$58 million less per year than the amount advocated by the Nationals (and in total, about $290
million less than what the Nationals sought for the full five-year period). Cohen Reply Aff. 14.
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52; Second Bevilacqua Aff. (Dkt. 536) at 50-54; Third Bevilacqua Aff. 15 n.5.8
MASN also wrongly argues that the Nationals are suffering no financial harm,
purportedly because MASN has been paying the Nationals rights fees that fall near the midpoint of telecast rights fees paid to other MLB Clubs (Haley Aff. 6 & Ex. 1; MASN Br. 1920). But the Nationals are entitled under the Telecast Agreement to the market value of their
own telecast rights, irrespective of where that amount falls relative to amounts received by other
Clubs. The Nationals occupy MLBs third-largest media market (Designated Market Area, or
DMA) when the Nationals and Orioles unified Television Territory is taken into
consideration, as required by the Telecast Agreement (Dkt. 204, at 1; id. at 7 ( 2.F)). The fact
that the Nationals are being paid rights fees falling near the mid-point for all thirty MLB Clubs
thus confirms that the Nationals are being substantially underpaid relative to the true market
value of the Nationals telecast rights. Third Bevilacqua Aff. 8.
Contrary to MASNs and the Orioles suggestion (MASN Br. 20), the Nationals are not
made whole by their receipt of profit distributions from MASN. First, the Telecast Agreement
entitles the Nationals to fair-market-value rights fees in addition to any profits distributions that
may be paid. See Dkt. 204, at 7-9 ( 2.I, 2.J, 2.L, 2.N); Third Bevilacqua Aff. 11. In any
event, even accounting for MASNs distributions, the Nationals are receiving tens of millions of
dollars less than what the Nationals would receive under a fair-market valuation of their rights
fees for the 2012-2016 period. Third Bevilacqua Aff. 15. And the Nationals receive by far the
8

MASN and the Orioles contend (MASN Br. 19) that the fees paid to the Nationals from 20052011 were not below market value, but the assertion is not credible. For instance, Comcast
represented in proceedings before the Federal Communications Commission in 2005 that it
would be willing to pay more for the Nationals telecast rights than what MASN paid during the
2005-2011 period. See First Bevilacqua Aff. 27-32; see also Second Bevilacqua Aff. 1823 (noting that the Nationals 2005-2011 rights fees were substantially below those received by
Clubs located in similar markets); Third Bevilacqua Aff. 13 n.4.
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smallest profit distributions of their peer Clubs, belying MASNs claims that the Nationals right
to a minority profit share gives them a competitive advantage. Id. 10.9 The Nationals profit
share also is dwarfed by what the Orioles took home in MASN profit distributions in 2015 (about
$50 million, compared to the $9.6 million that MASN says was paid to the Nationals), and by
what MASN has paid the Orioles in profit shares since 2012 ($200 million, compared to the
Nationals $34 million). Id. 12; Cohen Reply Aff. 11. In any event, whether or not other
Clubs receive similar profit distributions (see MASN Br. 20 n.12), the question whether the
Nationals are harmed by MASNs conduct is not determined by comparison to other Clubs, but
by considering what would be possible for the Nationals with receipt of the RSDC-determined
market-value rights fees to which they are entitled.
The Nationals franchise value, payroll, and on-field success (see MASN Br. 22-23) do
not refute the conclusion that MASNs failure to pay market-value fees causes the Nationals
harm: the indisputable fact is that the Nationals could be doing even better if the team were paid
fair market value for its telecast rights. MASN and the Orioles make the irrelevant assertion (id.
at 23) that the real reason the Nationals have failed to sign certain free-agent players is that the
team is somehow mismanagedbut the argument is in obvious contradiction of MASNs and
the Orioles own reliance (id. at 22-23) on the Nationals success: MASN cannot legitimately
maintain simultaneously that the Nationals have been hugely successful (to argue the Nationals
dont need additional rights fee payments any time soon) but also that the Nationals have been
poorly run (to suggest that their failure to make certain signings was the result of something
other than financial constraints). In any event, MASNs arguments about why certain players

Further, the higher profit distributions other peer Clubs receive from their RSNs are in
addition to market-value payments for those Clubs telecast rights. Third Bevilacqua Aff. 10.
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purportedly didnt sign contracts with the Nationals are predicated on nothing more than
newspaper columns and internet posts. See MASN Br. 23; Hall Aff., Exs. 22-25. Yet recent
developments support an opposite conclusion. For example, the Nationals successful re-signing
of top pitcher Stephen Strasburg reflects players evident desire to play for the Nationals. As the
Washington Posts Thomas Boswell reported, Strasburgs agent, Scott Boras, stated that
Strasburgs decision was driven in large part by [t]he ethics of the franchise. See Cohen Reply
Aff. Ex. 1, at 2. As Boswell concluded, Strasburg didnt merely stay, he gave the franchise and
the city a big baseball hug when, as a free agent in just five months, he could have signed with
anyone else. You dont sign a long-term extension when youre that close to freedom unless you
love where you are. Id. at 1.
Further delay in resolving the underlying rights-fees dispute would be inequitable for the
additional reason that, by withholding the market-value rights fees to which the Nationals are
entitled, MASN and the Orioleswhich already receive vast benefits from the Telecast
Agreement (see Third Bevilacqua Aff. 13)are unjustly enriching themselves at the Nationals
expense. The Nationals are a minority owner of MASN entitled to a share of its profits, but the
Orioles are super-majority owners entitled to a super-majority share (currently 83 percent).
Withholding significant portions of the market-value rights fees to which the Nationals are
entitled inflates MASNs profits and thus the profit distributions to the Oriolesall at the
Nationals expense. See id. 14-15. Specifically, because the Telecast Agreement provides
that the Nationals and the Orioles are to be paid the same rights fees, any dollar used for rights
fees is split between the two teams, meaning that the Orioles get 50 cents on the dollar. But any
dollar not paid in rights fees that instead goes to MASNs profits is split between the teams based
on their respective ownership stakesmeaning that the Orioles currently receive 83 cents of

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each dollar not paid in rights fees, while the Nationals get 17 cents. Thus, by shifting the
economics away from rights fees (which must be shared equally) and into profit distributions
(which get divided 83 to 17), the Orioles benefit at the Nationals expense. The bottom line is
that by year-end 2016, by paying out below-market rights fees, rather than the higher, marketrate fees to which the Nationals are entitled under the 2005 Telecast Agreement, MASN will
have effectively shifted some $70 million from the Nationals to the Orioles. Id.10 The Orioles
incentive to delay payment for as long as possible is obvious. And the harm to the Nationals
directly corresponds to the Orioles gain.
Indeed, reflecting their incentive to delay, MASN and the Orioles to date still have not
perfected their appeals or indicated that they intend to prosecute them promptly. And even when
the appeals are perfected, it could take a year or more for the Appellate Division to render a
decision. If the Court were to grant a stay, the Nationals would be forced to labor under belowmarket rights fees as the appellate process plays out. Nor has MASN done anything to protect
the Nationals financial interestsas by, for instance, placing into escrow funds representing the
difference between the Nationals demand and MASNs unilaterally-determined payments.
MASN has previously claimed that it has insufficient funds to pay the Nationals demands (see
Tr. Oral Arg. (Aug 8, 2014), Dkt. 170, at 24:7-26:19; see also 7/25/2014 Haley Aff. (Dkt. 55)
49), though in fact it had simply distributed all its funds to the Orioles and the Nationals via
profit-sharing (Dkt. 170, at 42:12-45:7). Delay in commencing the new RSDC arbitration will

10

Put differently, by unilaterally deciding to pay the Nationals only rights fees as calculated
using the Orioles Bortz method, MASN will have paid the Orioles at least an estimated $445
million in combined rights fees and equity distributions between 2012-2016, which is about
double the combined rights fees and equity distributions that MASN will have paid to the
Nationals for the same 2012-2016 period. Third Bevilacqua Aff. 15; Cohen Reply Aff. 11.
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give MASN, controlled by the Orioles, further opportunity to divest itself of assets needed to pay
an eventual judgment, creating additional burden on the Nationals when they seek to collect.
CONCLUSION
The Court should issue forthwith an order compelling MASN and the Orioles to comply
with the Courts Decision and Order, by arbitrating the parties rights-fees dispute for 2012-2016
before the RSDC, subject to the Nationals being represented by counsel that does not
concurrently represent MLB, the RSDC members or their Clubs.

Dated: May 27, 2016

New York, New York

Respectfully submitted,
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
By: /s/ Stephen R. Neuwirth______
Stephen R. Neuwirth
Sanford I. Weisburst
Julia J. Peck
Cleland B. Welton II
51 Madison Avenue
New York, New York 10010
212-849-7000
Attorneys for Plaintiff The
Nationals Baseball Club, LLC

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Washington