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The Nationals-Orioles broadcast rights fees dispute could lead to a new network

Dec 14, 2012, 11:02 AM EDT

old TV

The Nationals and Orioles have had a longstanding dispute over cable rights fees. Both teams have deals with MASN, but Peter Angelos owns MASN, and he and the network have been fighting with the Nats, who claim that they are getting less money for their broadcast rights than they deserve.

So far negotiations haven’t gone anywhere, but Major League Baseball may have a solution:

Major League Baseball has asked a private investment bank to seek potential new owners for the rights that are now held by the regional sports network controlled by Orioles owner Peter Angelos. Allen & Co., a New York-based investment bank, is seeking buyers to acquire the two franchises’ broadcast rights from the Mid-Atlantic Sports Network, according to two people with direct knowledge of the matter who spoke on condition of anonymity.

And once they had them, they’d set up a new Nats-only network.

All of this, by the way, is the result of the dealmaking that MLB did with Peter Angelos when they moved the Nationals into the Orioles’ territory, so it makes sense that MLB step in and try to solve this rather than sit back and take its usual passive approach.

  1. Old Gator - Dec 14, 2012 at 11:16 AM

    Just what we need, another network. The entire universe is filling up with them. Look through your neighbor’s telescope (but don’t let it dawn on you that he’s been using it to watch you and your vinyl doll) and you can see those gossamer broadcast waves, like the parachutes on the touchases of black widow nymphs, crisscrossing the skies like Halloween spray webbing….dear Buddha, pretty soon there won’t be any room left for dark matter.

    • natstowngreg - Dec 14, 2012 at 11:41 AM

      Your comments remind me of the Springsteen song, “57 Channels and Nothing’s On.” Except on my cable system, I have 570 channels and nothing’s on. Except during baseball season, when the Nats are available most every day. And, with Extra Innings(TM), I can listen to Vin Scully on a late-night Dodgers game if I wish.

      Thus, under normal circumstances, I’d agree completely about the proliferation of channels. But under normal circumstances, the O’s and Nats would each have its own network. Or, they would share a network (like the Cubs and White Sox), but also share the revenues more fairly.

      As part of the price for overcoming Angelos’ resistance to the Nats, whomever bought the team had to live with an extraordinarily crappy TV deal. Back when the Nats stunk, it wasn’t as big a deal, because they were watched by me and a few thousand of my closest friends. With the boom in the team’s fortunes, as well as in rights fees generally, that is unacceptable.

      Bud has indicated that he understands this, and that the dispute should have been resolved long ago. Don’t know why he expected that, since Angelos has the leverage and no incentive to share with the Lerners. However, it appears Bud has, in his quiet, behind-the-scenes way, begun to move. And once Bud begins to move, stuff happens. Granted, not always good stuff. In this case, it should be good stuff.

      • Old Gator - Dec 14, 2012 at 12:20 PM

        At this point in Bud’s decrepit existence, any movement would be a cause for rejoicing. This all sounds like a digital version of the Jints-A’s territorial pissing contest.

  2. tcostant - Dec 14, 2012 at 11:28 AM

    This is the passive approach, the deadline to resolve the dispute was suppose ne something like June 1st 2012. At the All-Star game the commish said he wanted to resolve it “yesterday”. Fox had contracted MASN a few months back and Peter Angelos said he wasn’t interesing in selling. What has changed is the MLB has likely wispered in Peter Angelos ear that the three team panel will award the Nationals a rights fees in the $100M/year range based on the current market. Peter Angelos says that would bankrup MASN because a clause in the contract says the O’s must be paid the same rights fees at the Nationals.

    I think this is the best way to resolve, sell to Fox get a pile of cash and let them deal with the rights fees.

    It makes to much sense it can’t possiblt happen././

  3. psuravens19 - Dec 14, 2012 at 11:34 AM

    The thing I find interesting is that Angelos is the one who owns MASN and brings in the most revenue, but the Nats are the ones spending money on the team.

    • natstowngreg - Dec 14, 2012 at 11:49 AM

      True. Though, while the two markets overlap somewhat, the Nats’ market is bigger. No excuse for Angelos’ failures as an owner, but that’s the reality.

      The Nats are emerging as a big-market team. After being middle-of-the-pack in payroll (mid-$80 millions; not that much different from the O’s payroll), they’re moving into the $100M range. And they have a lot of young talent who will get paid over the next 3 seasons. The Lerners have shown they’re willing to spend to get a contending team. They want want the kind of revenue that other contending, big-market teams get. Of course, it’s up to Mike Rizzo to make sure the Lerners spend their revenues wisely.

      • psuravens19 - Dec 14, 2012 at 1:41 PM

        I agree with you Natstowngreg and you hit the nail on the head with your comment about the Lerners have shown they are willing to spend, which is the exact opposite of Angelos. Yes they recently signed Jones, which was great, but all we Oriole fans hear in the offseason, is who they aren’t interested in because of their pricetag.

        And Chill – as much as I want to agree with you, I really don’t see how the O’s are going to improve. They won 93 games and had an amazing record in 1-run games and extra inning games, but there is no way one can expect that to happen again. Hope I’m wrong, but I just don’t see them improving that much more.

      • natstowngreg - Dec 14, 2012 at 3:36 PM

        It’s funny because, in their early years as owners, it looked like the Lerners might not be willing to spend. Then came a few signs to the contrarry, here and there. Ryan Zimmerman’s first extension; the big offer to Mark Teixeira; the Jayson Werth contract. They told the baseball world, we’re willing to spend.

        I’m sure Rizzo doesn’t have an unlimited budget, and has to justify spending on players to Mark Lerner (Ted’s son, and the Lerner who actually runs the team). Rizzo also understands clearly that he needs to save some of the Lerners’ money for the future, when the core youngsters’ salaries will skyrocket. But my initial doubts about the Lerners’ willingness to behave like a big-market ownership have gone away.

    • chill1184 - Dec 14, 2012 at 11:50 AM

      Dont you just love irony? However I do see the Orioles improving from last season’s campaign.

  4. dowhatifeellike - Dec 14, 2012 at 11:41 AM

    But that was the deal to get a team in D.C.

    Due to a lack of teams between MD and GA, the Orioles fanbase stretched all the way down to NC. The Nats were allowed to move in and soak up some of that fan base and the O’s received the majority of the TV money in return. That was the deal.

    The broader issue, which was mentioned here a few weeks ago, is that the Nats receive 1/8 of the MASN money and the Orioles get the other 7/8. The Orioles don’t actually get 7/8, though; they get the same as the Nats, and Angelos puts the other 3/4 in his pocket.

    • someguyinva - Dec 14, 2012 at 12:00 PM

      That was the deal, but the deal was based on a fiction.

      “There are no real baseball fans in Washington, D.C. That’s a fiction.” – Peter Angelos, 2004

      • someguyinva - Dec 14, 2012 at 12:09 PM

        My point being that Angelos can’t on one hand say that putting the Expos in DC cuts into his fanbase while at the same time saying there are no baseball fans in DC.

      • natstowngreg - Dec 14, 2012 at 12:17 PM

        Well, he can say that, if he has no shame.

        At the time, Angelos was also saying that those non-existent DC-area baseball fans must root for his team (which many were doing already). Never mind that he had gutted his team.

      • dowhatifeellike - Dec 14, 2012 at 2:26 PM

        Sure he can. A very large part of the D.C. population is not native; they don’t have the hometown allegiance. I see the same thing now that I live in Denver– half of Denver’s residents are not from Colorado. I’ll take in a Rockies game now and then but I have no vested interest in the outcome of the game. We have a bar that gives us the back bar for Ravens games and sometimes we outnumber the Donkey fans. We have the bartenders (also not CO natives) wearing purple on Sundays.

        Wasn’t it earlier this year that the WaPo ran an article about some bars not showing Nats games because of a lack of demand?

        Northern Virginia was a strong market for the Orioles 10 years ago – they called in to the radio shows in Baltimore all the time. Very few make the 75 minute drive up from “NOVA” to Camden Yards anymore.

      • natstowngreg - Dec 14, 2012 at 3:46 PM

        It’s true that many in the National Capital Region are from somewhere else. This is the capital of the United States, after all. But some of us adopted the local team when it arrived, even while rooting for other teams.

        Ex., I root for the Nats (not having had any real allegiance to naother team when the Nats arrived), but not the Redskins or Capitals. My allegiance is still where it has always been, with the teams in Buffalo. The other guys in our (half) season ticket group are a born-and-raised Cards fan from Southern Illinois; and a Twins fan from Connecticut.

        In this day and age of a mobile American population, sports allegiances are more complicated than where someone is from.

  5. scoutsaysweitersisabust - Dec 14, 2012 at 12:39 PM

    I am by no means an Angelos fan, especially as all this television revenue is running in and he’s still crying about how the team can’t afford to raise payroll to improve the team.

    However, that being said why on earth should Angelos sell off the rights to the Nats games? The deal was that to get a team in D.C., that Angelos would be given the rights to broadcast Nats games on his television network. Now a few years later, MLB and the Nats are trying to cry foul? MLB and the Nats made a terrible deal at the time in their haste to move a team into a new market and build yet another publicly funded ballpark. You made your bed, now lie in it. Why should Angelos be punished for having some foresight, and in the end, showing why he’s such a successful lawyer with a brilliant bargaining tactics. A lot of people mocked him during the negotiations, but considering how much money he’s making now, obviously it worked.

    • kkolchak - Dec 14, 2012 at 12:53 PM

      The Nats’ ownership did NOT make that horrible deal. It was done when the team was still owned by MLB.

      Angelos took a storied franchise with a cool new retro stadium that was sold out nearly every game in the early and mid-1990s and ran it into the ground. He should not be allowed to continue to vulture off the Nats’ success.

      • DJ MC - Dec 14, 2012 at 1:15 PM

        OK then, make the case that will pass muster in a court of law for why a legal, agreed-to contract should be voided.

        Oh, and the Nationals’ ownership did agree to the arrangement. By buying the club.

      • natstowngreg - Dec 14, 2012 at 3:51 PM

        This isn’t a legal issue. The Nats aren’t trying to violate the contract. The contract gave the Nats a window for seeking renegotiation of the fees. The renogation of the fees is stuck. MLB is seeking an alternative way around the impasse.

    • tcostant - Dec 14, 2012 at 1:21 PM

      You asked: Why on earth should Angelos sell off the rights to the Nats games?

      The answer is he can’t afford it or so he says. The Nats have a reset in that MASN deal every 5 years for rights review. Last year they got under $30M, while the market says they deserve over $100M ( Angelos thinks under $40M is the right number). Because the MASN seal has a clause that the O’s can’t be paid less than the Nats, they would have to give the O’s that same market value number the Nats get (over $100M per). Angelos has said this would bankrup MASN, so that is why he should sell.

      • DJ MC - Dec 14, 2012 at 1:51 PM

        That doesn’t matter, though. MLB gave the television rights for the Nationals to Peter Angelos for the territorial rights to Washington–or, to put it more accurately, for the Orioles forfeiture of their claim to those rights.

        If MASN goes bankrupt, he doesn’t have to do anything with those rights. As far as I know, he can just sit on them if he wants and Washington will see how Montreal felt the last few years of the Expos when they couldn’t get their games televised.

        MLB can try and break the contract if they want, but they surely know they face TWO long legal battles: one over the contract itself, and a resumption of the original one over the rights to the market.

      • tcostant - Dec 14, 2012 at 2:44 PM

        Hey DC –

        MLB can tell him selling is a good deal. If he refuses they can just award the Nats rights fees over $100M/per based on the current market (which he would have to match for the O’s according to the MASN deal) and let him deal with it, He a laywer, he quickly could firgure out if it’s worth selling or paying both the Nationals and the O’s over $100M/per

      • tcostant - Dec 14, 2012 at 2:49 PM

        Just to be clear, the MASN deal has a reset of rights fees every 5 years. So if he does as you suggest, just don’t show game, he would have to pay the Nationals $100M or so and not get any return revenue from showing the games.

        Wouldn’t it just be easier to take Fox’s money and sell the Network for a billion dollars and make more money than it cost to buy the O’s in the first place???

      • DJ MC - Dec 14, 2012 at 4:09 PM

        @tcostant

        I said if MASN goes bankrupt, which is what is being reported would happen if MLB awards the massive increase the Nationals want. That wouldn’t happen without a reason.

  6. Todd Boss - Dec 14, 2012 at 12:50 PM

    Baltimore-Washington isn’t the same as San Francisco-Oakland. To anyone who thinks that they’re the same market, or that somehow thinks that its straightforward for a Washington DC-area resident to get to a Baltimore Orioles game, i’d challenge you to do the following: Depart from the heart of the Northern Virginia suburbs (aka, the main area of draw for a typical family who represents the bulk of the Nationals fanbase) and attempt to drive to the Baltimore stadium on a week night in typical DC rush hour traffic to see how long it takes you.

    I’ll tell you how long it would take; 2.5 hours. You have to leave before 5pm to have any shot at making a 7:05 start. Considering that Philadelphia is roughly a 2 hour drive from New York, its like saying that Philly and NY are the same markets. The fact is that DC traffic has made Baltimore game attendance a non-starter.

    I know this has nothing to do with the TV negotiations, just a thought about the logistics involved in this area right now. 15-20 years ago this wasn’t the case, and you could make a larger argument (as Angelos made at the time) that moving a team into DC would do more to Baltimore’s fanbase.

    • DJ MC - Dec 14, 2012 at 1:33 PM

      So you can drive from New York to Philadelphia in rush hour in two hours? Especially having to get across the Delaware and Hudson rivers?

      From the center of DC (the Capital) to Camden Yards is just over 30 miles. From the center of Philadelphia (City Hall) to either New York ballpark is 89 miles. That’s a far more significant distance.

      • lessick - Dec 14, 2012 at 4:59 PM

        Well, I can say this, as a Baltimore resident. Although Philadelphia is twice as far from Baltimore in distance, it is more convenient for me to attend a game in Philadelphia than it is in DC. The traffic is easier, CBP is actually south of Philly so I never have to go as far as Center City, and parking is easy.

        Most importantly, traffic can indeed be brutal in the DC area.

  7. dlgdc - Dec 14, 2012 at 4:13 PM

    If Angelos is going to sell it might be worth more to wait until after the 2013 season. My assumption is that people around here might actually start watching the Nats this coming season. The Nats have about a 2.5 market share (O’s 4.6). Yes, this is a top 10 market but it’s kind of crazy to think the Nats want $100M a year for the rights to show their games that only 50,000 people watch (and this is a huge increase over the previous season).

  8. schmedley69 - Dec 14, 2012 at 5:10 PM

    It’s hard to believe that any businessman would want to buy the rights to televise Nats games, unless they came dirt cheap. The Nats ratings on MASN have been dismal over the years. At one point MLB thought about investigating because the ratings were so unbelievably low. I’m sure the ratings increased last year, but anyone wanting to shell out huge money for their rights would have to think twice after seeing how low their ratings were when the team was bad.

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