Boswell: MLB Committee will issue a valuation of Nat's MASN rights fees on June 1

[Frobby]

According to Boswell, the decision has been delayed until July 1. Sounds like Angelos might be dusting off the negotiation tactics that worked so well with Mussina and Palmeiro.

It doesn't sound as if Angelos is the cause of the delay by the panel in issuing its recommendation.

[Nigel Tufnel]

It doesn't sound as if Angelos is the cause of the delay by the panel in issuing its recommendation.

You may be right. I was just going by Boswell's 'Nats to MASN: Keep stalling, the price goes up.' line, but maybe that's not entirely accurate.

[BrunoCherrytown]

According to Boswell, the decision has been delayed until July 1. Sounds like Angelos might be dusting off the negotiation tactics that worked so well with Mussina and Palmeiro.

http://www.washingtonpost.com/sports/the-washington-nationals-have-arrived/2012/06/10/gJQAbGPMTV_story_1.html

Thanks for sharing this.

Looks like even more proof that MASN is way more profitable than folks think.

I mean the Nats as minority partners in MASN couldn't ask for a figure that would bankrupt the company, it'd get thrown right out. Of course they are also going in really high trying to hit a lower number, but they wouldn't start with the bankruptcy number I imagine.

I'm guessing "The sport?s revenue fairness committee" would look upon that unfavorably.

So knowing that the Orioles would get a matching figure, the Nats believe that $108million for them $108 million a year for the O's - $216 million in total rights fees a year - would be theoretically, economically feasible at least from an extreme scenario "possible" kind of thing.

Angelos sure has been awesome in reinvesting those profits in the team these last few years.

[TonySoprano]

Angelos sure has been awesome in reinvesting those profits in the team these last few years.

No doubt.

I bet it took arm-twisting to get him to go with new caps and orange jerseys. I'm only half-joking; some of the minors use hand-me-down jerseys from the Orioles re-lettered at a local company.

[olehippi]

I thought there was already an agreement with escalating payments and ownership rights in MASN for the Nats in place that was set up by MLB and agreed upon by Angelos, the Nat's owners. If so, are the Nats trying to void that agreement?

[Frobby]

Thanks for sharing this.

Looks like even more proof that MASN is way more profitable than folks think.

I mean the Nats as minority partners in MASN couldn't ask for a figure that would bankrupt the company, it'd get thrown right out. Of course they are also going in really high trying to hit a lower number, but they wouldn't start with the bankruptcy number I imagine.

I'm guessing "The sport?s revenue fairness committee" would look upon that unfavorably.

So knowing that the Orioles would get a matching figure, the Nats believe that $108million for them $108 million a year for the O's - $216 million in total rights fees a year - would be theoretically, economically feasible at least from an extreme scenario "possible" kind of thing.

Angelos sure has been awesome in reinvesting those profits in the team these last few years.

I don't see this column as proof of anything. Nor do I assume that the Nats' figure of $108 mm is a reasonable position. Nor do I assume that the Nats believe that MASN economically could pay $108 mm to both them and the Orioles. If I were the Nats, I'd argue that their rights fees are more valuable because the DC area population is bigger than Baltimore's, and is wealthier so more valuable to advertisers. And if I were the Orioles, I'd argue that the O's get better TV ratings than the Nats so the Nats' fees should be lower. And, of course, nobody knows if the contract between MASN and the teams requires that the rights fees be equal between the two, which is certainly possible but we don't really know.

As I've said before, we really don't know what the contract says about the standard for setting the rights fees. It may be that the profitability of MASN is totally irrelevant and the market price as estabished by comparable deals could be the sole benchmark. Or, it may be that MASN's profits are relevant. It all depends what the contract says, and none of us know what it says.

So, I'm just going to sit patiently and see what happens, instead of just guessing. I think we all know that the rights fees are going to increase significantly. By how much, and whether it is equal for both teams, we will have to wait and see.

[TonySoprano]

I don't see this column as proof of anything. Nor do I assume that the Nats' figure of $108 mm is a reasonable position. Nor do I assume that the Nats believe that MASN economically could pay $108 mm to both them and the Orioles. If I were the Nats, I'd argue that their rights fees are more valuable because the DC area population is bigger than Baltimore's, and is wealthier so more valuable to advertisers. And if I were the Orioles, I'd argue that the O's get better TV ratings than the Nats so the Nats' fees should be lower. And, of course, nobody knows if the contract between MASN and the teams requires that the rights fees be equal between the two, which is certainly possible but we don't really know.

As I've said before, we really don't know what the contract says about the standard for setting the rights fees. It may be that the profitability of MASN is totally irrelevant and the market price as estabished by comparable deals could be the sole benchmark. Or, it may be that MASN's profits are relevant. It all depends what the contract says, and none of us know what it says.

So, I'm just going to sit patiently and see what happens, instead of just guessing. I think we all know that the rights fees are going to increase significantly. By how much, and whether it is equal for both teams, we will have to wait and see.

The points that he, and I have made previously, about the profits is valid. As Bruno correctly notes, MLB is not going to set them in such a way to nearly bankrupt the company. To do this, it is a safe assumption that they know what the books look like, and if I were the Nats' owner, I'd have them studied in-depth. Funny how all along you argued that this deal would likely end up with the Orioles getting the same rights deal. Now you've come around to my position where the Orioles deal is separate and up to the Orioles accountants to decide what's best for team Angelos.

[Nigel Tufnel]

I don't see this column as proof of anything. Nor do I assume that the Nats' figure of $108 mm is a reasonable position. Nor do I assume that the Nats believe that MASN economically could pay $108 mm to both them and the Orioles. If I were the Nats, I'd argue that their rights fees are more valuable because the DC area population is bigger than Baltimore's, and is wealthier so more valuable to advertisers. And if I were the Orioles, I'd argue that the O's get better TV ratings than the Nats so the Nats' fees should be lower. And, of course, nobody knows if the contract between MASN and the teams requires that the rights fees be equal between the two, which is certainly possible but we don't really know.

As I've said before, we really don't know what the contract says about the standard for setting the rights fees. It may be that the profitability of MASN is totally irrelevant and the market price as estabished by comparable deals could be the sole benchmark. Or, it may be that MASN's profits are relevant. It all depends what the contract says, and none of us know what it says.

So, I'm just going to sit patiently and see what happens, instead of just guessing. I think we all know that the rights fees are going to increase significantly. By how much, and whether it is equal for both teams, we will have to wait and see.

This was from Boswell's chat today. According to him, the O's and Nats are guaranteed the same MASN fees. I hadn't seen that reported before, so I'm not sure if he's right about that or not.

Bos, I read somewhere recently that the Nats are looking for $108M per season from MASN and Angelos for the Nats TV rights. What's the latest on that? I'm thinking now that MLB wishes that they hadn't got involved in that mess in the first place - and let the Nats have their own TV rights. And, I'm thinking Angelos would rather run MASN into the ground than give the Nats north of $100M.

? June 11, 2012 10:07 AM Permalink

A.Thomas Boswell :

The recommendation by the revenue fairness committee (or whatever this super-secret society calls itself) has been pushed back 30 days to July 1. But it's flexible like everything in Bud World.

MASN/Angelos have a contract for a reset that they'll have to live up to. As one ex-Nats exec said he told Ted, "In the end, you're going to GET the money."

BTW, in that contract, the Orioles are guaranteed exactly the same TV rights fee as the Nats! Even though the Washington market is exactly TWICE as big. So, Peter owns both MASN and the O's. If the Nats rights went up to $70M, hypothetically, MASN would have to pay an additional $41M to the O's and another $41M to the Nats. In the case of the O's/MASN, the money would __very broadbrush__ go from one of Peter's pockets (MASN) to the other (O's). So, the O's wouldn't be hurt. But any additional money that goes to the Nats would come out of Angelos MASN pocket and come to Washington.

Hey, it's business, so they fuss. Nobody really knows how or when it will play out __but it will. One possibility is that the Nats get a bigger equity stake in MASN and accept a lower rights fee. Nats are now at 13%. Selig told me such issues __and everything else under the sun__were "on the table."

Being a baseball commissioner is like playing "Wack-A-Mole." As soon as one owner pops his head up to make the commissioner miserable __and gets pounded back into his hole__ another one pops up. Last week, my wife mentioned his analogy to the commissioner of baseball in Japan, Ryozo Kato, Japan's the former ambassador to the U.S. He's a huge baseball fan, great person. He said, "Yes, that sounds familiar. But fortunately I only have 12 owners. Commissioner Selig has 30."

http://live.washingtonpost.com/ask-boswell-120611.html

[Frobby]

Funny how all along you argued that this deal would likely end up with the Orioles getting the same rights deal. Now you've come around to my position where the Orioles deal is separate and up to the Orioles accountants to decide what's best for team Angelos.

No, I haven't come around to your position, I just said we didn't know. And if Tom Boswell is correct (as quoted above), then my previous guess was correct. But, it was just a guess.

[TonySoprano]

Once again, I'm working off assumptions. I can see how the contract was made in order to protect the Nats, because they will always own a minority share in the company. It sets a floor for their rights fees. However, I don't see how it forces the Orioles to take an increase on their side, as much as some might assume it would be a no-brainer to do so.

[Frobby]

Once again, I'm working off assumptions. I can see how the contract was made in order to protect the Nats, because they will always own a minority share in the company. It sets a floor for their rights fees. However, I don't see how it forces the Orioles to take an increase on their side, as much as some might assume it would be a no-brainer to do so.

Well, we will see. I do note that the MLB committee seems to be making a "recommendation" on the rights fees, not a binding decision. So, this may drag on for quite some time even after July 1.

[Frobby]

By the way, the reason you and Bruno gave why it would not be in the Orioles' interests to increase their own rights fees had to do with the revenue sharing rules among the teams. I find it hard to believe that if the O's have a contractual right to have rights fees equal to the Nats', and then voluntarily didn't take it to keep their revenue artificially low, that the other owners would accept that. But again, we will see what happens.

[LookinUp]

So we should all hope that the Nats get a huge windfall from this so the O's do too, otherwise it's just more of PA pocketing $$ and keeping them out of the Orioles coffers. Sort of.

[TonySoprano]

No, I haven't come around to your position, I just said we didn't know. And if Tom Boswell is correct (as quoted above), then my previous guess was correct. But, it was just a guess.

Let's just say you've taken a more definitive position on this in the past than "we didn't know." (example, FWIW)

By the way, the reason you and Bruno gave why it would not be in the Orioles' interests to increase their own rights fees had to do with the revenue sharing rules among the teams. I find it hard to believe that if the O's have a contractual right to have rights fees equal to the Nats', and then voluntarily didn't take it to keep their revenue artificially low, that the other owners would accept that. But again, we will see what happens.

I can see that point. I can also see the Steinbrenner boys, John Henry, Joe Ricketts not opening that can of worms unless they want to have it opened on their side. Finally, I have said before that it will increase the public pressure on the Orioles to apply the MASN resources to the on-field product as promised almost six years ago....if someone in the local media has the "stugots" to report this, that is.

[hoosiers]

I really don't see what is so difficult about this unless the Os/Nats are close to agreeing on something themselves (or alter the MASN ownership %s).

MLB (and the Os/Nats) surely know the annual revenue amounts for 2012-2016 for the five most recent deals along with the size of the market involved in each (as well as probably the expected ratings/eyeballs). I am sure they could get this close enough to a "split the difference" conclusion regarding the fees.

One does get the feeling that a dramatic ramp-up in fees is going to happen soon for both teams which will leave loyal Os fans wondering why Mr. Angelos has been pocketing enormous sums of $ the past few years instead of re-investing in the team.