As the Washington Nationals were locking up starting pitcher Stephen Strasburg for the next seven seasons, they were simultaneously engaged in a legal dispute with the Baltimore Orioles over how revenue from the Mid-Atlantic Sports Network. While the extension may make a lot of sense for Washington on the field, it may weaken their performance in the courtroom.
In case you’ve forgotten about this lawsuit over the course of the four years it has been ongoing, here’s a refresher: when the Nationals moved to Washington, D.C., they technically entered Baltimore’s territory as the map is drawn up by Major League Baseball. The Orioles gave Washington permission to relocate to the capitol city of the United States of America and share MASN – along with the revenue from the broadcasting network – with the Nationals.
The original agreement stated that the two teams would negotiate how much money Baltimore (the Orioles are the principal owner of MASN) would pay Washington for the rights to its games. Those negotiations failed for the 2012-2016 time frame, and the dispute went to MLB’s Revenue Sharing Definitions Committee, who gave the Nationals a generous $60 million annual royalty.
In response to this, MASN and Baltimore sued Washington, and won the suit. Judge Lawrence Marks overturned the ruling by the RSDC, stating that the legal counsel that the Nationals hired had previously worked for the RSDC and created an appearance of bias. As you would expect, Washington has appealed Judge Marks’ decision and now we wait for the court of appeals to hear the case.
In the meantime, Washington has acted like anything but a franchise which is strapped for cash. During the period of 2012-2016, we have seen the Nationals make several moves in trades and on the free agent market that upped their payroll significantly.
After the 2013 season, Washington acquired starting pitcher Doug Fister and the last two years of his contract which carried a price tag of $18.6 million. In July of 2015, the front office acquired relief pitcher Jonathan Papelbon despite his hefty price tag, $11 million for this season.
Starting pitcher Max Scherzer was inked to a seven-year, $210 million contract just two months after Judge Marks handed down his ruling. During this past off-season, the Nationals traded for Ben Revere and his $6.25 million 2016 salary, in addition to signing infielder Daniel Murphy at a cost of three years, $37.5 million.
Now add Strasburg’s $175 million extension, which is the largest extension that any pitcher has ever gotten after having undergone Tommy John’s surgery. In their efforts to strengthen their roster, Washington may have also strengthened the case of MASN and Baltimore against it.
According to Nathaniel Grow, MASN and the Orioles’ contentions are that because the Nationals own part of MASN, they have been receiving profit shares in the amount of tens of millions of dollars completely separate from broadcast rights fees. Baltimore and MASN also contend that Washington isn’t hurting financially, pointing to the high-dollar deals that the Nationals have been able to make.
It’s probably going to be a while yet before this is resolved, and that’s why business as usual must go on for both teams. Strasburg would have been eligible for free agency after this season, hence the timing of the extension for Washington. In terms of getting a maximum share of the revenue from MASN, however, extending Strasburg may end up costing the Nationals much more than $175 million.
