Orioles-Nationals Television Dispute Reaches Litigation
AUGUST 18: The presiding judge has awarded MASN a preliminary injunction that will prevent the Nationals from acting to enforce the arbitration award for the time being, according to a tweet from James Wagner of the Washington Post. The immediate effect is that Washington will not be able to demand the increased rights fees while the litigation plays out.
More broadly, the order would appear to be a promising development for the Orioles’ side of the dispute, indicating that the court could be inclined to allow the case challenging the arbitration award to move forward. (See the last paragraph of this post for further explanation.) But even that still must be briefed and argued before the sides engage in any discovery or reach the merits of the immediate dispute — which is, itself, a step removed from the ultimate question of the rights fee amount.
JULY 29: The Orioles and Nationals have a long-running dispute over the distribution of broadcast fees from the jointly-owned Mid-Atlantic Sports Network. (Wendy Thurm of Fangraphs detailed the background of the dispute here; James Wagner of the Washington Post did the same here.) The sides have been unable to agree to terms on the broadcast fees to be paid to the Nationals, who own a minority share in MASN. According to a report from The Hollywood Reporter, that the disagreement has escalated to the point that it is now in open court.
While the fact that the parties have now filed competing complaints in New York is noteworthy, the real news probably consists in the precursor to those actions. An arbitration hearing occurred in April, with Mets COO Jeff Wilpon, Pirates president Frank Coonelly, and Rays owner Stuart Sternberg composing the panel. The decision was made on June 30, according to THR, with the result landing in the Nationals’ favor. (Details are not known, but the Nationals were said to be seeking somewhere in the realm of $100MM to $120MM annually.)
In a letter, MLB Commissioner Bud Selig issued warnings to the teams’ owners (Peter Angelos of the Orioles and Ted Lerner of the Nationals) to avoid litigation, saying he would impose “the strongest sanctions available” if that occurred. He had strong words for both men, saying that neither “has approached this negotiation with the best interest of the game at heart” and charging the pair with an “unfathomable inability to agree on a fair division of [the rights fee’s] value.”
The legal battle began (or, really, continued) thereafter. Orioles representatives claimed that the arbitral proceeding lacked in procedural fairness. The club has also claimed that MLB was not disinterested because it stood to recoup a cash stipend paid to the club. As Jonah Keri of Grantland reported, a payment was made to help account for the Washington franchise’s lagging revenue as the dispute carried on. According to the Orioles letter cited in the THR piece, at least one $25MM payment was made by MLB to the Nationals.
Attorneys for the Nationals, meanwhile, countered that MASN (which, remember, is majority-owned by the Orioles) was required to begin paying the newly-escalated rights fee, per the arbitration award. The Nationals presented the network with formal notice of defaults, and later petitioned the MLB Commissioner’s Office to confirm and enforce the panel’s decision. (It appears from the report that no action was taken on that request.)
At this point, MASN initiated a legal proceeding in New York state court seeking to modify or vacate the arbitration award, which is the common cause of action in such circumstances. On July 24, the Nationals responded and apparently filed their own petition (presumably, including a counterclaim to enforce the arbitration award).
MLB issued the following comment: “Although certain legal maneuvering has taken place, Commissioner Selig remains hopeful that the parties can reach an agreement in an amicable manner.” As Adam Kilgore of the Washington Post tweets, the Nationals declined comment, the Orioles said that “contracts are meant to be honored,” and MASN declared that there would be “no impact on the telecast of games.”
The actual legal dispute will of course be governed by standard arbitration law (albeit with all the wrinkles of baseball’s unique circumstances). Arbitration awards are routinely upheld by courts except in limited circumstances such as procedural unfairness, and parties seeking to overturn awards face an uphill battle to plead and prove a claim. Barring settlement, it is likely that the parties to this dispute (as any other) will exchange legal briefs regarding whether a court should hear the complaint at all, with the Nationals arguing that the award should be upheld even if everything alleged by the opposition were to be proved. If the dispute is allowed to proceed (if, in other words, it survives a motion to dismiss), then MLB would be faced with the prospect of an open court battle. That would risk the public disclosure of court filings and, potentially, sensitive documents and depositions.
This Date In Transaction History: DeJesus, Castro
It was on or around this date when a couple of interesting transactions occurred over the last two seasons. Together, they show some of the possibilities that we could still see over the last dozen or so days of the month.
Last year, the Nationals completed the acquisition of outfielder David DeJesus from the Cubs on August 19th after claiming him off revocable waivers in the days before. And on today’s date in 2012, the Cubs reportedly reached agreement with shortstop Starlin Castro on a seven-year, $60MM extension.
The DeJesus transaction was somewhat curiously received at the time — there was even a suggestion that it had been a mistake — but makes better sense in retrospect. Though the foundering Nats would go on to make a decent but too-late run at postseason contention, the club was well out of the race at the time. And the veteran DeJesus had roughly $2.5MM in guaranteed money left on his deal (including a buyout of a $6.5MM option for this season). As it turned out, DeJesus was placed back on waivers almost immediately and was claimed by the Rays, who ultimately shipped minor league pitcher Matthew Spann to D.C. for the outfielder.
In various comments, Nationals GM Mike Rizzo explained that he had been making use of the team’s “positioning on the waiver wire,” believing that the club could add a prospect by making the claim. Though Spann was not a major add, Rizzo said that he was pleased to add system depth and believed he might have done better if DeJesus had cleared. He also indicated that the team would have been comfortable keeping DeJesus and intended to pursue him in free agency if his option were to be declined. (DeJesus ultimately had his option picked up and signed an extension with Tampa.) Indeed, Washington went on to sign left-handed hitting outfielder Nate McLouth to a two-year, $10.75MM free agent deal that was nearly identical to the two years and $10.5MM that DeJesus got from the Rays.
Let’s turn to Castro, who was just 22 years of age at the time of his deal and signed away the remainder of his twenties for a nice guarantee. Castro was to qualify for arbitration as a Super Two player at the end of the 2012 season, and the extension covered all of his arb eligibility while also buying up three projected free agent-eligible seasons. That deal looked questionable last year, when Castro slumped to a .245/.284/.347 campaign, but Castro has restored his shine in 2014. Over 528 plate appearances, he owns a .286/.333/.433 triple-slash with 13 home runs. He has been valued at 1.7 rWAR, though a more favorable defensive rating from UZR (as opposed to the Total Zone metric utilized by Baseball-Reference) boosts Castro’s fWAR to a strong 2.6 mark.
As things stand, the contract looks to be a solid asset, and it will be interesting to see whether Chicago ultimately looks to cash it in for an alternative, such as young pitching. Though Castro is still just 24, and could be an important anchor for the team’s hoped-for renaissance, the Cubs also have a much-championed assortment of talented, even younger middle infielders filtering up. Arismendy Alcantara and Javier Baez have already reached the bigs, while the recently-acquired Addison Russell is playing at Double-A. While there is certainly no rush for the team to make any moves, and plenty of options remain for allocating those young bats around the field, Castro’s extended control makes for ample flexibility.
Blue Jays Claim Matt Hague From Pirates
The Blue Jays have claimed first baseman Matt Hague off waivers from the Pirates, Toronto announced via press release. Hague has been optioned to Triple-A.
Hague, 28, has only limited MLB experience but was swinging well this year at Triple-A Indianapolis, slashing .267/.365/.448 with 14 long balls over 386 trips to bat. Pittsburgh designated him for assignment (and ultimately exposed him to waivers) to make roster space for the acquisition of reliever John Axford.
Nationals Sign Nate Schierholtz
The Nationals have inked outfielder Nate Schierholtz to a minor league deal, the club announced on Twitter. The left-handed-swinging 30-year-old was recently released by the Cubs, who will owe him the remainder of his $5MM salary — less whatever he earns in Washington (presumably, at the league-minimum rate).
Schierholtz has had a tough year thus far, posting a meager .192/.240/.300 line with six home runs over 341 plate appearances. But he entered the offseason coming off a string of solid production: his cumulative line over 2011-13 (1,134 plate appearances) stands at a fairly robust .261/.314/.442. He has posted large splits historically, with a lifetime .722 OPS against righties but a .650 mark against same-handed pitchers. Though his batting average and on-base numbers have been similar, much of his pop has come with the platoon advantage.
The move makes sense for a Nationals club that has dealt with some injuries to its outfielding corps. In particular, left-handed-hitting fourth outfielder Nate McLouth has struggled to work his way back from a right shoulder injury, and had largely been ineffective (.173/.280/.237) before going down. The team’s top young call-up options (including Michael Taylor, Steven Souza, Tyler Moore, Eury Perez, and Jeff Kobernus) are all right-handed bats, creating a solid opportunity for the veteran Schierholtz in D.C.
Somewhat ironically, the move comes approximately a year to the day that the Nats added another lefty bat who had spent his season with Chicago. In 2013, the club acquired David DeJesus through a waiver claim, only to flip him days later to the Rays through another August waiver deal. (Earlier that summer, those clubs matched up in another deal for an outfielder, with Scott Hairston heading to D.C.) Of course, the circumstances are quite different: last year at this time, a disappointing Nationals team was sitting at the extreme periphery of the postseason hunt, while the club now owns a six-game lead in the NL East.
Poll: Where Will Rusney Castillo Sign?
We’ve heard a lot of reports recently on Cuban outfielder/infielder Rusney Castillo, who drew most every team in baseball to a showcase before embarking on a series of individual workouts. It remains to be seen, of course, just how good Castillo will be at the major league level. But scouting reports have ranged from solid to fairly glowing (being compared to Ron Gant, for example, is not faint praise).
Rumor has it that, having shown some big tools in his showcase, Castillo could land as much as $50MM in a six-year deal. On top of his ability, Castillo’s appeal lies in the fact that he is expected to be ready for an MLB roster spot virtually right out of the gate and that teams can acquire prime years without sacrificing draft compensation or young talent. That is hardly unprecedented — just this winter, the same was true of Jose Abreu — but Castillo holds special intrigue since he could have near-immediate impact on a postseason race. (Of course, as Joel Sherman recently noted, quick visa work will be necessary to make that possible.)
For those reasons, there is no shortage of plausible landing spots for Castillo. Looking back through the MLBTR archives, 11 teams have been connected with him in some manner beyond simply attending the showcase. (The Orioles and Twins were also said to have interest, but not at his expected price tag.) Ben Badler provides a breakdown of some of the possible fits here. So, will Castillo sign with one of those clubs, or will a mystery team emerge?
Where Will Rusney Castillo Sign?
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Yankees 20% (4,453)
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Red Sox 20% (4,361)
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Mystery Team 12% (2,701)
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Tigers 9% (2,106)
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Cubs 9% (2,010)
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Phillies 8% (1,683)
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Mariners 5% (1,183)
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Blue Jays 4% (943)
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Giants 4% (939)
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White Sox 4% (884)
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Braves 3% (700)
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Astros 1% (328)
Total votes: 22,291
Reactions To Manfred’s Election As Commissioner
Rob Manfred emerged yesterday as Major League Baseball’s next Commissioner, ultimately winning a unanimous election from the game’s owners after a minority group had initially gathered enough votes to stall Manfred’s victory. As Bob Nightengale of USA Today writes, the participants in the day’s proceedings emerged with a positive tone. “While Rob may not have been my initial choice for commissioner, the conclusion of a very good process was to name Rob as the person best positioned to help baseball endure and grow even stronger for the next generation of fans,” said White Sox owner Jerry Reinsdorf, said to have led the opposition. “Everyone wants baseball to flourish. Today’s decision was reached by 30 owners voting separately but speaking, in the end, with one voice.”
- Manfred says he has a clear mandate on the game’s modernization, pointing to “a huge amount of consensus” in that area. Labor may prove a trickier field to navigate, though Manfred certainly has unmatched experience dealing with the MLB Player’s Association — which, in part, may have explained some of the resistance to his assumption of the Commissioner’s chair. “The biggest thing is always labor peace,” said Yankees owner Hal Steinbrenner. “That’s never going to change. These things come around every few years and there’s a lot at stake.”
- The relationship between Manfred and recently-elevated MLBPA executive director Tony Clark appears to be solid, writes Jon Morosi of FOX Sports, who says that bodes well for the future. Many of the things that Manfred will hope to accomplish will require cooperation from the players, of course.
- The new Commissioner-elect will indeed have many priorities to tick through, many of which Ben Nicholson-Smith of Sportsnet.ca lists. Some relate to a theme that many have stressed in recent days: improving the game’s appeal to younger fans. Thorny player contract and competitive issues may also be on the table, with plenty of attention falling on service-time considerations in prospect promotions as well as the function of the qualifying offer system.
- Earlier today, MLBTR’s Steve Adams asked readers to assess whether Manfred was the right choice. A plurality (and near-majority) concurred with the league’s owners, with nearly 30% of respondents saying that an alternative direction should have been pursued rather than Manfred and the other two finalists for the position.
NL Notes: Thornburg, Henderson, Medlen, Phils, Tulo
The Brewers will go the rest of the way without righties Tyler Thornburg and Jim Henderson, according to a tweet from MLB.com’s Adam McCalvy. Thornburg will receive a platelet-rich plasma injection in a bid to avoid surgery on his elbow, while Henderson may need shoulder surgery. Thornburg, 25, tossed 29 2/3 innings before being shut down, while the 31-year-old Henderson (who saved 28 games last season) scuffled through just 11 1/3 frames.
Here’s more out of the National League …
- Braves hurler Kris Medlen is just two and a half weeks away from beginning to throw again after his second Tommy John surgery, and feels confident that he’ll be back on the hill “at some point next season,” David O’Brien of the Atlanta Journal-Constitution reports. But it remains to be seen whether he’ll work his way back with Atlanta, as his current $5.8MM salary and status as a two-time TJ patient makes him a non-tender possibility. “I’m a little nervous about it, just because it’s not in my hands,” said Medlen. “… It’s exciting to be able to pick up a ball in a couple of weeks, but I’m not going to lie, the contract stuff and wanting to come back — I mean, that’s somewhat up in the air this time, so it’s a little nerve-racking, but all I can do is get healthy.” In spite of his uncertain future, the 28-year-old righty should draw plenty of interest around the league if the Braves allow him to hit the open market.
- Were it not for Jonathan Papelbon‘s continued presence at the back of the Phillies‘ bullpen, young righty Ken Giles would likely have moved into the closer’s role, Ryan Lawrence of the Philadelphia Daily News writes. Commenting on the story, Buster Olney of ESPN.com (Insider link) argues that the club should move Papelbon back into a setup role to give Giles an audition as a 9th-inning option and to prevent Papelbon from finishing enough games for his 2016 option to vest at $13MM. While this approach has some facial appeal, I would note that allowing Giles to begin racking up saves now will ultimately raise his price significantly when he ultimately reaches arbitration. (And, of course, there is the question of how to handle Papelbon’s insistence that he continues to close.)
- Yesterday, Phillies GM Ruben Amaro Jr. again discussed his organization’s future, as MLB.com’s Todd Zolecki reports. Declining to give many specifics, Amaro said that the “biggest plan is to make sure we improve offensively and with our pitching overall,” saying he will look to address those (rather broadly-framed) needs “in a variety of ways.” Sitting 14 games back in the division and 11 out of the wild card, the Phillies are nonetheless not entirely ready to give up hope this year. “Right now, we’re trying to win as many games as possible,” said Amaro. “At the same time, at some point, we’re going to have to start looking to the future. … And at some point, we may be looking more at what we have to do for 2015 as far as what’s going on, on the field. … We’re not quite there yet.”
- Though Troy Tulowitzki of the Rockies continues to play shortstop at a very high level, it is time he considered moving to first base, argues Mark Kiszla of the Denver Post. Tulowitzki’s bat is obviously good enough to make the move — he led the league in all three triple-slash categories (.340/.432/.603) when he suffered his season-ending hip injury — but switching to first would obviously sap a good portion of his immense bottom-line value. On the other hand, of course, it is fair to wonder whether playing the least-demanding spot on the diamond might not only help keep Tulowitzki on the field but might also enable him to hit at a top-end level even further into the six years (and $118MM) left on his contract.
Dodgers Acquire Justin Germano
The Dodgers have acquired right-hander Justin Germano from the Rangers for future considerations, Rangers executive vice president of communications John Blake announces (on Twitter). Germano has been added to the Triple-A Albuquerque roster to begin his tenure with the organization.
Germano, 32, has seen only minimal action at the MLB level over the past two seasons but has spent time in the majors in parts of nine years. Overall, he owns a 5.40 ERA with 5.7 K/9 against 2.9 BB/9 over 330 innings, including 48 starts. At Triple-A this year, working as a starter, Germano has pitched to a 4.51 ERA with 5.6 K/9 and 1.5 BB/9 over 131 2/3 frames.
Having only made two appearances for an injury-plagued Texas rotation, Germano will function as organizational depth for Los Angeles. The Dodgers have once again seen a solid pool of arms require some supplementation over the course of the year, with Josh Beckett, Chris Perez, and Paco Rodriguez all on the 15-day DL and Chad Billingsley, Paul Maholm, Chris Withrow, Onelki Garcia, Stephen Fife, and Ross Stripling among those who are down for the season.
Minor Moves: Brad Mills, Ernesto Frieri
Here are the day’s minor moves …
- The Blue Jays have outrighted southpaw Brad Mills to Triple-A Buffalo, according to the team’s transactions page. Mills, 29, was designated for assignment by the Jays on Tuesday and will have the option to elect free agency rather than report to Triple-A, having been outrighted in the past. He has a 9.15 ERA in 20 2/3 Major League innings this season but a sensational 1.81 ERA with 9.0 K/9 and 1.9 BB/9 in 89 1/3 innings between the Triple-A affiliates for Milwaukee and Toronto this season.
- After clearing waivers, righty Ernesto Frieri has accepted an assignment to the Pirates‘ Triple-A affiliate, Chris Cotillo of MLBDailyDish.com reports on Twitter. After starting the season as the Angels’ closer, Frieri was dealt to Pittsburgh and then designated for assignment when he failed to right the ship. Though other clubs might have been willing to take a chance on him, Frieri’s $3.8MM first-year arbitration salary no doubt scared off any claims. It seems all but certain at this point that Frieri will end up being non-tendered in the offseason.
Commissioner Voting In Progress; Manfred Still One Vote Shy
4:33pm: Selig and White Sox owner Jerry Reinsdorf are speaking in private, tweets Nightengale. Reinsdorf has long been a Selig advocate, but his opposition to Manfred as Selig’s successor has been well documented. The ChiSox, as noted below, are one of the teams currently opposing Manfred.
4:05pm: Schmidt tweets that the second vote for Manfred again resulted in a 22-8 split. Heyman tweets that there will be a 30-minute break in the action before any further proceedings resume.
3:48pm: The eight teams currently not willing to join the majority on electing Manfred include the Blue Jays, Red Sox, White Sox, Nationals, Angels, Athletics, Diamondbacks, and Reds, according to reporting from the New York Daily News (via Twitter).
2:43pm: The next stage will involve an up-or-down vote on Manfred, reports Schmidt (Twitter links). Voting has yet to begin at this point.
1:47pm: Manfred was just one vote shy of being selected as commissioner after the first round of voting, tweets Jon Heyman of CBSSports.com.
Michael Schmidt of the New York Times offers some interesting vignettes of the still-ongoing proceedings.
1:32pm: After several votes, there is still not a sufficient consensus to name a new commissioner, tweets Bob Nightengale of USA Today. The meeting has been adjourned for a break at this point.
12:58pm: Major League Baseball’s owners took part in a series of meetings again this morning and are now prepared to hold a first vote on the game’s new Commissioner at approximately 1:30 EST. One of the three finalists, MLB VP of business Tim Brosnan, has dropped out before the voting, Jon Heyman of CBSSports.com reports on Twitter.
That leaves MLB COO Rob Manfred and Red Sox chairman Tom Werner as the two candidates for the Commissioner’s chair (unless a deadlock were to result in a re-opening of the search process, at least). As MLBTR’s Steve Adams explained yesterday, the vote had expected to come down to the pair. The major question has been, and seemingly still is, whether Werner’s backers could draw enough support to hold up the coronation of Manfred, who has been considered the heir apparent to longtime Commissioner Bud Selig. A vote of 23 owners is necessary to elect the game’s new leading executive.
We will keep track of any updates in this post, as they are reported.