- The Washington Times - Tuesday, June 14, 2005

The bitter legal battle between the Baltimore Orioles and Comcast SportsNet (CSN) deepened yesterday as the team and Major League Baseball moved to dismiss CSN’s breach of contract lawsuit against them.

CSN sued the Orioles and MLB in April in Montgomery County Circuit Court, claiming the two entities breached the regional sports network’s contract with the Orioles by publicly announcing the development of the Mid-Atlantic Sports Network (MASN). CSN said the Orioles’ plan to move its local pay television games to MASN, of which the team holds a majority equity stake, violated key provisions of its contract to air Baltimore’s games.

In separate responses yesterday, the Orioles and MLB fired back, arguing they did not breach CSN’s right to match contract offers from a third party for the team’s TV rights. The pair insist MASN is not a third party but rather a registered trade name of TCR Inc., the Orioles subsidiary that actually signed the television pact with CSN.

“The third-party claim is the problem with the whole case,” said Arnold Weiner, a Lutherville, Md.-based attorney representing the Orioles. “Comcast went running off on the assumption that TCR licensed out the Orioles’ rights to somebody else, and they didn’t. MASN is TCR, and because of that the whole case is bogus.”

The case has ensnared the Washington Nationals because MASN produces and distributes Nationals telecasts, and Comcast Corp., CSN’s parent company, refuses to show MASN on its cable systems while the litigation is ongoing. When MLB sells the Nationals later this year, the new team owner also likely will purchase baseball’s minority stake in MASN.

A hearing on the motion to dismiss is set for July27. But over the next several days, the Orioles will shift their legal activity against CSN from defense to offense. The team is considering a complaint with the Federal Communications Commission arguing CSN is in violation of federal program access rules by refusing to carry MASN.

A countersuit is possible at a later date, with the Orioles claiming CSN is interfering with efforts to get distribution with other cable and satellite TV providers. Comcast is by far the largest provider of cable TV service in the region.

“MASN, being jointly owned by the Orioles and Major League Baseball, clearly is a third party,” said Comcast spokesman D’Arcy Rudnay. “By filing this motion to dismiss, the Orioles are attempting a subterfuge to avoid discussing what is a clear violation of their contractual rights with us.”

After MLB and the Orioles ended more than six months of negotiations to establish MASN, an MLB press release referred to “forming a joint venture” to air games of both the Nationals and Orioles. The Orioles called that statement “inartfully drafted.” But MLB did commit to give $75million to the Orioles for the minority equity stake in MASN, which begins at 10 percent and ultimately rises to 33 percent.

CSN, which also claimed tortious interference in its lawsuit, seeks an unspecified amount of punitive and compensatory damages of more than $100,000 and a halt to MASN’s operations. The Orioles-CSN contract extends through the 2006 baseball season.

The TV dispute and the resulting reduction of TV exposure represents a sour point in an otherwise dreamlike season for the Nationals, who rode a just-completed 12-1 homestand to first place in the National League East and an average attendance of 31,912 that ranks as MLB’s 12th best. CSN, meanwhile, continues to show Orioles games.

Surprisingly, MLB’s efforts to sell the Nationals have continued to proceed and by many accounts have accelerated despite the lawsuit. A new owner could be selected in less than two months. In the last six weeks, MASN was able to get distribution of Nationals games on DirecTV and RCN Cable.

MASN executives have argued CSN’s lawsuit is motivated by a unsuccessful attempt last fall to acquire the Nationals’ TV rights and a desire to avoid a second regional sports network entering the Mid-Atlantic market. Comcast denies those claims and argues MASN’s development will result in price increases to cable and satellite TV subscribers.

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