North Carolina doesn't want MASN or the Orioles [Archive]

Frobby

10-12-2011, 11:18 AM

This case is old (last December), but interesting. Click on the link and then look at the attached brief filed by the FCC, in which it defends its decision not to require a North Carolina cable company to carry MASN. http://www.fcc.gov/document/tcr-sports-broadcasting-holding-llp-v-fcc-usa-no-11-1151-4th-cir

Apparently, in a survey, only 4 of 500 North Carolina residents said they followed the Orioles. The cable companies that do carry MASN in North Carolina get ratings that are 1/15th what they are in Baltimore.

Oh, and the FCC took pains to point out that the Orioles have been terrible for years.

Some of the more intersting details are redacted but the facts in the brief are interesting nevertheless.

My sympathies to the board members who live in NC.

SilentJames

10-12-2011, 11:19 AM

I always felt that NC was a bit of a stretch for "Orioles territory". I figured the Carolinas were always Braves' or Cardinals' country.

jcarm

10-12-2011, 11:22 AM

I always felt that NC was a bit of a stretch for "Orioles territory". I figured the Carolinas were always Braves' or Cardinals' country.

How are the Carolina's Cardinals country?

OFFNY

10-12-2011, 11:31 AM

o
Ehhhhh. I don't know what the Carolinians are thinking. The Orioles are America's team. We have fans as far west as Alaska, and as far east as Maine. We have fans as far north as Rochester, and as far south as Florida. ;)

Get with the program, Tar Heels/Wolfpack/Blue Devils/Demon Deacon country people.

andrewochs615

10-12-2011, 11:35 AM

lovetoaster

10-12-2011, 11:42 AM

SoBo

10-12-2011, 11:47 AM

lovetoaster

10-12-2011, 12:04 PM

You gotta believe that Sternberg would love to put his Rays in Charlotte. it may not be a great pro sports town. But it's gotta be better than what TB has done. I travel to Charlotte quite a bit. Great town. I think over time a baseball team could succeed there.

It is a great city, but it is not a baseball town and I don't think it could sustain a MLB team for 81 home games a year. I know that the AAA team is actually across the state line in SC and that the stadium...well...kinda sucks, but there is not much support for it at all. As much as I hate to say it, Charlotte just is not a great sports city.

I compare Charlotte to Indianapolis. Similar sizes with NFL football, NBA basketball and AAA baseball. I don't think either city would be able to support an MLB team. A friend and I were chatting about relocation when we were leaving the Panthers game on Sunday and I have come to the conclusion that there just are not that many attractive markets for MLB teams that are looking to move or get a stadium deal by threatening to move.

But you are right, I am sure we could do better than Tampa has. I know I would be there quite a bit, especially if they were in the AL East. They have teased moving the AAA team to a new downtown stadium quite a bit and it will happen at some point soon, and there have been rumblings that it will have the capability to expand to MLB capacity. Some people want MLB here, but a lot of people, myself included, are skeptical.

DonnyUnitas

10-12-2011, 12:07 PM

As a Raleigh-ite, this is disappointing news to say the least.

As it is, it's only once in a blue moon that I'm available to catch the O's on TV. That said, there is a relatively strong contingent of O's fans, and this is still very much O's/Braves country.

Looks like I'll be looking to make the move to DirecTV in the near future. Don't they have MASN availability?

For Charlotte, as they can barely keep an NBA team, I don't see an MLB team doing so well. Charlotte is full of Yankees fan transplants, save a small contingent of natives who support the Braves. I don't think a new (or relocated) ballclub would be successful.

lovetoaster

10-12-2011, 12:10 PM

Looks like I'll be looking to make the move to DirecTV in the near future. Don't they have MASN availability?

Yes, in NC MASN is included in Directv for all but the most basic package.

Frobby

10-12-2011, 12:11 PM

Edit: My cable is through a company, Time Warner, that has also refused to carry MASN in N.C.

Yes, Time Warner is the company named in the FCC case.

By the way, in an earlier decision in the case, it is stated: "MASN is now held jointly by the owners of the Orioles and Nationals." From the context of the decision, I believe it is pretty clear that (1) the Orioles themselves do not own the partnership interest in MASN, but (2) the interest is held by all the Orioles' owners, not just Peter Angelos.

lovetoaster

10-12-2011, 12:15 PM

For Charlotte, as they can barely keep an NBA team, I don't see an MLB team doing so well.

As for the NBA though, the team has been really terrible ever since it has been back. And there are a lot of people here are still really bitter about the old Hornets ownership and while the Bobcats have nothing to do with that, the way the Hornets situation went down turned a lot of people off to the NBA in general. When the Hornets were getting better two years ago and made the playoffs, tickets were actually relatively difficult to get down the stretch. And let's be honest, the NBA has not really put out a great product for a while now. There are a lot of arenas that looked half full at best the last few years and probably will again whenever they decide to start playing again. So I would not necessarily use that as a barometer.

lovetoaster

10-12-2011, 12:21 PM

Yes, Time Warner is the company named in the FCC case.

Sorry, I thought this was a different case. Time Warner pretty much dominates cable in North Carolina, and the was this has gone down is pretty frustrating. When I still had cable, I did not care how the case was settled, as long as I could watch the O's. And there was literally no way other than getting Directv. I do know some people that are Orioles fans here that have just stopped caring about the team. Now I am sure that some of that has to do with the losing, but a lot of that also has to do with the fact that so many people have Time Warner and have no access to the Orioles, even if they wanted to pay extra for the PPV package.

I was pretty pissed at both sides until I finally broke down and got Directv.

TGO

10-12-2011, 02:58 PM

There are still a good amount of Orioles fans in this area, but I would not say that it is a huge number. With that being said, the MLB broadcast rules are ridiculous. I got Directv this year, just so I could watch the O's, even though I would have been more than happy to buy Extra Innings on the cable that I got for free, but the O's are blacked out. We have the Braves, Nationals, Orioles and Reds blacked out as our local teams. That...makes...no...sense.

I understand the NFL blackout rules, even thought they are outdated. But the MLB ones are absurd.

Edit: My cable is through a company, Time Warner, that has also refused to carry MASN in N.C.

Yeah, I agree, they absolutely need to change the blackout rules so that if you're within a team's "territory" but no cable provider carries them, you should be able to watch on Extra Innings. Then again, they do it this way to try to force people like you to yell at your cable company to pay the subscription fees so you can watch the games. Nothing like using your fans to try to milk free money out of their neighbors. :rolleyes:

lovetoaster

10-12-2011, 04:28 PM

Yeah, I agree, they absolutely need to change the blackout rules so that if you're within a team's "territory" but no cable provider carries them, you should be able to watch on Extra Innings. Then again, they do it this way to try to force people like you to yell at your cable company to pay the subscription fees so you can watch the games. Nothing like using your fans to try to milk free money out of their neighbors. :rolleyes:

Oh yeah, I spent plenty of time sending nastygrams to my state representatives, Time Warner Cable and MLB with very little response.

SilentJames

10-12-2011, 04:33 PM

TGO

10-12-2011, 05:19 PM

You think Memphis or, dare I say, Louisville could handle an MLB team?

BTW, the only reason I said ST.Louis I was trying to think of southern teams. Its a stretch sure.

Both smaller than Charlotte by about 400k people (w/in their metropolitan statistical areas). Norfolk and Nashville are larger than both, but also smaller than Charlotte.

Can_of_corn

10-12-2011, 05:27 PM

Both smaller than Charlotte by about 400k people (w/in their metropolitan statistical areas). Norfolk and Nashville are larger than both, but also smaller than Charlotte.

I think the window for a team in Norfolk closed with the team going to DC. Also not sure how well would do, the population there is highly military and therefor somewhat transient, it would be hard for them to build up the brand.

TonySoprano

10-12-2011, 05:42 PM

Oh, and the FCC took pains to point out that the Orioles have been terrible for years.
Unlike the Baltimore Orioles, the Atlanta Braves have been one of the most successful MLB franchises over the past two decades, winning 14 straight division titles (an MLB record) and a World Series championship. It is thus not surprising that North Carolinians prefer the Braves over the Orioles and Nationals.

From the context of the decision, I believe it is pretty clear that (1) the Orioles themselves do not own the partnership interest in MASN, but (2) the interest is held by all the Orioles' owners, not just Peter Angelos.Can you point us to where the document points to (2) ?

clapdiddy

10-12-2011, 05:51 PM

Can you point us to where the document points to (2) ?

I found it:

18 This evidence is consistent with the e-mail from TWC executive Tom
Smith, observing in September 2006 that TWC's subscribers in eastern North
Carolina include "a HUGE Atlanta fan base" and "NO Baltimore fans to
speak of." MASN Exh. 13 (JA____). Unlike the Baltimore Orioles, the
Atlanta Braves have been one of the most successful MLB franchises over
the past two decades, winning 14 straight division titles (an MLB record) and
a World Series championship. It is thus not surprising that North Carolinians
prefer the Braves over the Orioles and Nationals.

Click on the link, hit "Expand" and search for the word "Unlike".

Frobby

10-12-2011, 05:56 PM

Can you point us to where the document points to (2) ?

It isn't in the document I linked, it is in an earlier decision in the case. I can't post a link without figuring out how I got the document, but here is a longer quote:

[MASN] was established in 1996 by the Baltimore Orioles as a holding company for the Orioles' television production and exhibition rights. In 2005...the Orioles executed a settlement agreement with MLB whereby the Orioles agreed to share their entire television viewing territory with the Nationals. Consequently, MASN is now held jointly by the owners of the Orioles and Nationals, and maintains the rights to produce and exhibit the games of both teams.

That is from the formal decision of the FCC's Media Bureau, and a footnote cites to MASN's pre-hearing brief in the case as the authority for that statement.

TGO

10-12-2011, 06:00 PM

I think the window for a team in Norfolk closed with the team going to DC. Also not sure how well would do, the population there is highly military and therefor somewhat transient, it would be hard for them to build up the brand.

Ultimately I don't think any city in the southeast is going to get a team, unless for some reason TB wants to move to Orlando, which is the most populous metro in the southeast without a team, though it's smaller than T-SP. I was just pointing out that Charlotte has an edge population wise on those other cities.

In terms of viable locations for ML teams you're basically talking about San Antonio, Portland, and to a lesser degree, Sacramento and Las Vegas.

TonySoprano

10-12-2011, 06:28 PM

I found it:

Click on the link, hit "Expand" and search for the word "Unlike".The quote you cited was included in my earlier post. Frobby's quote below is what I was trying to find, assuming that the "Baltimore Orioles" = Angelos & friends.

It isn't in the document I linked, it is in an earlier decision in the case. I can't post a link without figuring out how I got the document, but here is a longer quote:
MASN] was established in 1996 by the Baltimore Orioles as a holding company for the Orioles' television production and exhibition rights.

Frobby

10-12-2011, 06:49 PM

The quote you cited was included in my earlier post. Frobby's quote below is what I was trying to find, assuming that the "Baltimore Orioles" = Angelos & friends.

So, do you agree with my interpretation that Angelos does not appear to be the only Orioles owner who owns a piece of MASN, but rather that all the people in the Orioles ownership group (and those in the Nationals group) own a piece of MASN? I think it is a relatively important point, because it affects the ability of Angelos to line his own pockets by artificially deflating the rights fees paid by MASN to the Orioles.

TonySoprano

10-12-2011, 11:27 PM

So, do you agree with my interpretation that Angelos does not appear to be the only Orioles owner who owns a piece of MASN, but rather that all the people in the Orioles ownership group (and those in the Nationals group) own a piece of MASN? I think it is a relatively important point, because it affects the ability of Angelos to line his own pockets by artificially deflating the rights fees paid by MASN to the Orioles.After deducting the rights fees from revenues, MASN has a net profit or loss. This cuts both ways. Lower rights fees mean a lower bottom line for the Orioles, but in turn make for more revenue for MASN. The gamesmanship therefore is which company's book do you want to look better? As to Angelos, he owns the majority share of both the Orioles and MASN. It is possible that he owns a larger share of MASN, since he had the deepest pockets from which to draw from for the early investment needed to jumpstart MASN.

mrbig1

10-13-2011, 12:41 PM

Who wants to watch a team get there butts handed to them night after night? I don't blame them at all.

BrunoCherrytown

10-13-2011, 12:47 PM

Maybe to attract more interest in North Carolina between innings they can have people drive golfcarts or gocarts around the base paths in circles over and over again.

Frobby

10-13-2011, 01:07 PM

After deducting the rights fees from revenues, MASN has a net profit or loss. This cuts both ways. Lower rights fees mean a lower bottom line for the Orioles, but in turn make for more revenue for MASN. The gamesmanship therefore is which company's book do you want to look better? As to Angelos, he owns the majority share of both the Orioles and MASN. It is possible that he owns a larger share of MASN, since he had the deepest pockets from which to draw from for the early investment needed to jumpstart MASN.

I guess we are still in the dark in terms of whether the relative shares of MASN among the Orioles ownership group is the same as their split of their ownership of the Orioles. One thing we know for sure is that the Nats group owns about 13-16% of MASN. So, if the Nats (through the arbitration procedure) can force MASN to pay the Nats a fair market price for their TV rights, while MASN continues to pay a below-market price to the Orioles, that in effect is putting extra money from the below-market Orioles' deal into the hands of the Nats' owners. That doesn't seem favorable to Angelos, and if I were one of the Orioles' co-owners, I'd be furious in that situation. Of course, another thing we don't know is what percentage of the Orioles these minority owners own -- if it's a nominal percentage, that's one thing, and if it is a very significant percentage, that's something else entirely.

As to which company's books you'd like to look better, it has been a game for a long time to try to keep revenue off the books of the baseball team and on the books of the RSN. The reason for this is that baseball has revenue-sharing, so the less revenue your team is showing, the better. I understand that MLB has done some things to try to overcome these kinds of accounting tricks, which Steinbrenner pioneered before selling off a large portion of YES.

TonySoprano

10-13-2011, 01:18 PM

As to which company's books you'd like to look better, it has been a game for a long time to try to keep revenue off the books of the baseball team and on the books of the RSN. The reason for this is that baseball has revenue-sharing, so the less revenue your team is showing, the better. I understand that MLB has done some things to try to overcome these kinds of accounting tricks, which Steinbrenner pioneered before selling off a large portion of YES.That's the way I figured it also. The Nats are trying to put more on the team's side of the ledger in the lawsuit. Keeping it in MASN lets Angelos cry poor about payroll.

The problem with that is

Well, I don't like to lose…That's not my game. And then a team was introduced into D.C. along with the disparities I am talking about (with the Yankees it's even greater). [The Yankees and Red Sox are] the two teams of the five in the AL East who are generating the enormous streams of revenue with which Toronto, Tampa Bay and the Orioles have had to deal with for these last seven, eight, nine years. I would really say the past seven years or so we have been, along with the other two teams, at the bottom of the totem pole with New York and Boston at the top…both of which have RSN's (Regional Sports Networks) like we just managed to accomplish, and have had them for years. So, their revenues have been so substantial by comparison to Toronto, Tampa Bay and the Orioles. source - Angelos to Stan Charles (http://www.pressboxonline.com/story.cfm?id=738)

Frobby

10-13-2011, 01:26 PM

That's the way I figured it also. The Nats are trying to put more on the team's side of the ledger in the lawsuit. Keeping it in MASN lets Angelos cry poor about payroll.

If the Nats ownership group owned 50% of MASN, it would be in their interest for both the O's and Nats to have below-market deals. But since they only own 13-16%, they are much better off having the Nats have a market-rate deal, even if that means that the O's will also get a market-rate deal. And of course, they are way better off if the Nats have a market-rate deal and the O's have a below-market deal. No way I see that happening. So, as I see it, the Nats' ability to force a new, higher rights fee on MASN will result in the Orioles getting at least that much, and it will be much harder for Angelos to hide the fact that the Orioles are making a lot of money.

TonySoprano

10-13-2011, 01:39 PM

If the Nats ownership group owned 50% of MASN, it would be in their interest for both the O's and Nats to have below-market deals. But since they only own 13-16%, they are much better off having the Nats have a market-rate deal, even if that means that the O's will also get a market-rate deal. And of course, they are way better off if the Nats have a market-rate deal and the O's have a below-market deal. No way I see that happening. So, as I see it, the Nats' ability to force a new, higher rights fee on MASN will result in the Orioles getting at least that much, and it will be much harder for Angelos to hide the fact that the Orioles are making a lot of money.Since nobody outside of the warehouse has a full look at the books, what is to prohibit the O's from keeping their side below-market?

Frobby

10-13-2011, 02:18 PM

Since nobody outside of the warehouse has a full look at the books, what is to prohibit the O's from keeping their side below-market?

I'm saying it puts money in the Nats' pocket. Just to use a simple example, let's say that for both the Nats and O's, a market price would be $60 mm each, but they are each being paid only $30 mm, so that is a total of $60 mm (2 x $30 mm) in profits from below-market deals being kept within MASN. Well, that's great for PA and the other Oriole owners, because they own 84% of MASN so 84% of that $60 mm is now theirs. But now let's say that MASN is forced to pay the Nats their extra $30 mm for their TV rights. Well now, the extra $30 mm from the Orioles below-market deal is going 84% to the O's owners and 16% to the Nats owners, whereas if that $30 mm was paid to the Orioles, 100% of it would go to the O's owners. So, it is not in the interest of the Orioles' owners for MASN to underpay the Orioles, if the Nats are not being similarly underpaid.

TonySoprano

10-13-2011, 02:50 PM

I'm saying it puts money in the Nats' pocket. Just to use a simple example, let's say that for both the Nats and O's, a market price would be $60 mm each, but they are each being paid only $30 mm, so that is a total of $60 mm (2 x $30 mm) in profits from below-market deals being kept within MASN. Well, that's great for PA and the other Oriole owners, because they own 84% of MASN so 84% of that $60 mm is now theirs. But now let's say that MASN is forced to pay the Nats their extra $30 mm for their TV rights. Well now, the extra $30 mm from the Orioles below-market deal is going 84% to the O's owners and 16% to the Nats owners, whereas if that $30 mm was paid to the Orioles, 100% of it would go to the O's owners. So, it is not in the interest of the Orioles' owners for MASN to underpay the Orioles, if the Nats are not being similarly underpaid.Rights fees are not profit. They are income/expenses, depending on which company, which contribute to, but aren't the only factor in determining profit. Angelos and his partners draw from both wells, MASN and Orioles. If profits/losses are distributed to the Nats and O's based on ownership percentage, then it is in Angelos' best interest to pay market value to the Orioles. That would save him from paying the Nats-MASN (as opposed to Nats-MLB) 13-16% of the rights fees paid by the Orioles. However, that also adds revenue to the Orioles side of the books, which we have said is not in the owner's best interest to do.

Frobby

10-13-2011, 02:58 PM

Rights fees are not profit. They are income/expenses, depending on which company, which contribute to, but aren't the only factor in determining profit. Angelos and his partners draw from both wells, MASN and Orioles. If profits/losses are distributed to the Nats and O's based on ownership percentage, then it is in Angelos' best interest to pay market value to the Orioles. That would save him from paying the Nats-MASN (as opposed to Nats-MLB) 13-16% of the rights fees paid by the Orioles. However, that also adds revenue to the Orioles side of the books, which we have said is not in the owner's best interest to do.

We would need to know more about how baseball is doing its revenue sharing calculations to know whether the adverse revenue-sharing impact of giving the O's a market-rate deal outweighs the impact of leaving the money inside MASN where the Nats' owners get a share of it. I agree that rights fees are expenses to MASN, but there should be a dollar-for-dollar impact on MASN's profit. As usual, there is a lot we don't know here.