Camden Depot: Two New Developments In MASN Dispute

http://camdendepot.blogspot.com/2015/01/two-new-developments-in-masn-dispute.html

The first development is that MASN and MLB (not the RSDC) discussed giving the Nationals a 33% profits interest for years 2014-2016 under the condition that MLB would agree to use the Bortz Methodology to determine rights fees.

MLB tried to convince Angelos to either restructure MASN or sell MASN to Comcast. MLB told the Orioles that if they were willing to give the Nationals 50% equity in MASN that MLB would agree that a rights fee of $44m per Club that grows at 4% thereafter would be fair value. It is questionable why the Orioles would have agreed to such a deal because they wouldn't receive any extra money using this plan instead of the RSDC plan but would lose a considerable amount of equity.

MLB and MASN discussed possible solutions to this situation but weren’t able to come to a decision. It probably didn’t help much when MASN learned that MLB thought that Comcast deserves a reasonable profit but that MASN doesn’t.

Manfred doesn't want his emails read in open court though

I've stayed on the sidelines over this whole mess. What am I missing though? I thought that part of letting Washington have a team was giving the Orioles a chunk of the TV money for a period of time. Why is this all going on? Do the Nationals feel that the deal that they signed wasn't fair or is this just the regular cycle to negotiate a new % with us and the Nationals?

Someone more knowledgeable please enlighten me.

I've stayed on the sidelines over this whole mess. What am I missing though? I thought that part of letting Washington have a team was giving the Orioles a chunk of the TV money for a period of time. Why is this all going on? Do the Nationals feel that the deal that they signed wasn't fair or is this just the regular cycle to negotiate a new % with us and the Nationals?

Someone more knowledgeable please enlighten me.

That was my understanding or misunderstanding too. I have a feeling that there may have been a few meetings behind the scenes that told Washington to accept the provisions (with a wink) and they would deal with it later (now).

I've stayed on the sidelines over this whole mess. What am I missing though? I thought that part of letting Washington have a team was giving the Orioles a chunk of the TV money for a period of time. Why is this all going on? Do the Nationals feel that the deal that they signed wasn't fair or is this just the regular cycle to negotiate a new % with us and the Nationals?

Someone more knowledgeable please enlighten me.

To put it simply, DC was part of Angelos market and the MLB wanted to move the Expos there. To convince PA to let them do it, they helped him form MASN with him and the Orioles having controlling the stake. They all then agreed that the Nationals would be paid a certain amount, with the amount increasing every year based on some formula.

Flash forward and Lerner owns the team. He decides he doesn't like the contract that was agreed upon and the MLB then says "okay Peter, give em more money, and if you don't like it and try to fight then we're going to give you harsh punishments." Angelos ignored them and took them to court.

And thats the story for the most part.

EDIT: It's also important to note that the Expos had to move because the Blue Jays moved into their territory and took a large part of the fan base. Hence why Angelos and the Orioles were adamant about MASN.

Toronto and Montreal aren't all that close geographically.

From what I've read, the Expos previously had rights to all of Canada, and that the Blue Jays coming and the Expos poor management combined to cause the move.

Also, the Nationals are asking for $110MM for rights, and MASN wants to give $35MM based on the formula. In the long run the Nats will receive around $1600MM, while the Nats want between 1500-2400MM. Also, the Nats were sold to Lerner cheaper because of the lower revenue.

OK, so this thread prompted me to take a quick look at the case docket. There have been a ton of court filings in the last two weeks, not just the ones referenced by Camden Depot. Frankly, I do not have time to read them all, much less read them carefully. There have been over 600 motions, briefs, affidavits, exhibits and court orders placed on the court docket since the case began seven months ago, including more than 100 just in the last few weeks.

From my quick look, I gleaned the following:

- The RSDC made its informal determination as to the value of MASN's rights in April or May of 2012. That determination never changed. However, the RSDC did not issue a formal decision until June 2014, while the parties had settlement discussions that were largely initiated by MLB and included the possibility of selling MASN to Comcast. There were many documents comparing the economics of the various structures of selling to Comcast with the economics of MASN under the RSDC's informal decision.

- The decision of MLB to advance funds to the Nats came during the period while these settlement discussions were ongoing, and after the RSDC had made its informal decision.

- MLB says that MASN/the Orioles did not object to the advances when they learned of them. There seems to be a dispute on this point, but if objections were made, it appears they weren't in writing.

- MLB staff largely drafted the text of the RSDC decision once it had been made, subject to review and revision by the RSDC.

I have not read any of this stuff carefully enough to handicap who wins this case. However, anyone who just accepts the version given by MASN and the Orioles is kidding themselves. For example, it's pretty clear that MLB's decision to advance funds to the Nats was after the RSDC had decided the value of the rights fees, and that the RSDC was not consulted about the advance nor did they know about it. So, the whole argument that the RSDC was biased because of the decision to advance funds to the Nats is pretty much bogus.

By the way, Rob Manfred has given three different affidavits during the course of the case, with lots of exhibits. I doubt he is too fazed by the prospect that some of his emails will have to be produced (sorry, weams, but that's my opinion).

I found it very interesting that MLB wants MASN to sell their entire network to Comcast. That could mean Comcast will control their entire regional sports market in the Mid Atlantic area.

I know a lot of people aren't thrilled with Angelos as an owner, but this situation may show why he is exactly the owner the Orioles need right now.

I would really love to see something much closer to the original splits to prevail. I find it wholly disingenuous to rip up the original agreement because it doesn't "work" for everyone now.

Excellent stuff everyone. Thanks for the info!

Threads like these, with the information sans standard Internet refrain add clarity to a complex issue and it is another great reason this is best O's forum on the planet.

Outside of Maryland, folks are painting Baltimore as being greedy, but it makes much better sense in the context of the original deal.

-Don

EDIT: It's also important to note that the Expos had to move because the Blue Jays moved into their territory and took a large part of the fan base. Hence why Angelos and the Orioles were adamant about MASN.

The Expos moved because Jeff Loria destroyed the team and the fanbase.

There are a lot of narratives about what happened to the Expos, but none of them fit too neatly. For reasons that are unclear to me, in 1998, Expos' attendance dropped from 1.498 mm to 915,000, and the next year dropped to 773,000. All that was long after the Blue Jays had won two World Series, and before Jeffrey Loria bought the team. The team certainly didn't thrive under Loria, but it's hard to blame the whole mess on him when attendance dropped by 50% in the two years before he arrived.

Toronto and Montreal aren't all that close geographically.

Montreal to Toronto is about twice the distance between New York and Baltimore.

The Expos moved because Jeff Loria destroyed the team and the fanbase.

Pretty much at the insistence of Bud, who realized he had no political leverage in Montreal to get a new stadium built at taxpayer expense.

There are a lot of narratives about what happened to the Expos, but none of them fit too neatly. For reasons that are unclear to me, in 1998, Expos' attendance dropped from 1.498 mm to 915,000, and the next year dropped to 773,000. All that was long after the Blue Jays had won two World Series, and before Jeffrey Loria bought the team. The team certainly didn't thrive under Loria, but it's hard to blame the whole mess on him when attendance dropped by 50% in the two years before he arrived.

They did trade Pedro, Henry Rodriguez, and Mike Lansing after the 1997 season. Not a whole lot to get excited about in '98. Aside from Vlad.