Fox trying to buy MASN

[CA-ORIOLE]

So. You are saying that the same group of investors are the managing partners of each of these organizations? Because the same group could sell their interest in any of these business and retain their percentage ownership of the others if so.

Yeah, exactly. I guess it could be set up that way but we have no reason to think it is. The idiot with the Dodgers had the team divided up into the parking lot, concessions, surrounding land, and whatever less he could think of. I think he kept some of those interests after the sale.

[apollod]

So. You are saying that the same group of investors are the managing partners of each of these organizations? Because the same group could sell their interest in any of these business and retain their percentage ownership of the others if so.

Err.. not really; there's not really any personal stake in MASN or TCR to be sold (at least nothing of significance from what I can gather)

Right now in order for PA to remove his stake in MASN, he'd have to sell off his stake in the O's; because he only owns MASN via TCR which is owned by the O's.

That's not to say that PA doesn't personally own shares in MASN, but it's not the majority and him selling those off wouldn't have any affect on whether the O's owned MASN. And the MLB settlement stipulated a ownership stake split between the franchises.. not the owners; so I'd have to assume only the franchises hold shares in MASN and nobody else.

In case that isn't clear enough, maybe I can try explaining it via arbitrary numbers:

Lets say for each company there's 1000 shares split up between the shareholders.

So for the Baltimore Orioles LLP:

Peter Angelos owns 900 shares

All other investors own 100 shares.

For TCR:

The Baltimore Orioles LLP own 1000 shares (I'm guessing because there's no hard info; but the O's are definitely the managing partner so they've either been voted that way or they hold the majority of shares). TCR just seems like a "shell" for managing the media piece for the O's; It's been around since at least 96.

For MASN (assuming the 87%/13% split reported via the media is accurate):

TCR owns 870 Shares

Washington Nationals/Some other NATS owned enterprise owns 130 Shares

So PA doesn't own any shares of MASN; but because he owns a controlling stake in the O's; and the O's own a controlling stake in TCR; and TCR owns a controlling stake in MASN.. PA controls MASN, but PA doesn't personally own MASN. Now PA can sell off those 870 shares in MASN to himself or somebody else to divest MASN from the O's/TCR. But from everything I've read/gathered, PA doesn't own any shares of MASN directly.

[BrunoCherrytown]

Yeah, exactly. I guess it could be set up that way but we have no reason to think it is. The idiot with the Dodgers had the team divided up into the parking lot, concessions, surrounding land, and whatever less he could think of. I think he kept some of those interests after the sale.

I think McCourt was able to retain some level of control on a portion of the parking lots. It was a weird setup though.

Below is a pertinent bit of why the Dodgers deal could end up looking like a steal. It also speaks to the true value of MASN.

I posted a tidbit from this article months back, but here are some parts worth digesting and why you don't want to sell MASN separate from the O's...

The greater Los Angeles television market is just under five million homes, but its outlying areas boost that figure to more than seven million[...]

Analysts say a Dodgers network could command a monthly fee of about $3.50 per home beginning in 2014 and reach a market that could stretch as far east as Las Vegas and north to San Luis Obispo.

That could translate into nearly $300 million in revenue annually before the network sells a single ad spot. Another bonus: Proceeds from regional sports networks aren't subject to baseball's revenue-sharing rules, which seek to maintain competitive balance among the MLB's 30 teams.

Here...

So now you are seeing 5-7 million homes and what that can do for your bottom line.

Now, MASN reaches from Harrisburg to Charlotte - just start running the TV households from this link in that area of coverage.

[BrunoCherrytown]

Err.. not really; there's not really any personal stake in MASN or TCR to be sold (at least nothing of significance from what I can gather)

Right now in order for PA to remove his stake in MASN, he'd have to sell off his stake in the O's; because he only owns MASN via TCR which is owned by the O's.

That's not to say that PA doesn't personally own shares in MASN, but it's not the majority and him selling those off wouldn't have any affect on whether the O's owned MASN. And the MLB settlement stipulated a ownership stake split between the franchises.. not the owners; so I'd have to assume only the franchises hold shares in MASN and nobody else.

In case that isn't clear enough, maybe I can try explaining it via arbitrary numbers:

Lets say for each company there's 1000 shares split up between the shareholders.

So for the Baltimore Orioles LLP:

Peter Angelos owns 900 shares

All other investors own 100 shares.

For TCR:

The Baltimore Orioles LLP own 1000 shares (I'm guessing because there's no hard info; but the O's are definitely the managing partner so they've either been voted that way or they hold the majority of shares). TCR just seems like a "shell" for managing the media piece for the O's; It's been around since at least 96.

For MASN (assuming the 87%/13% split reported via the media is accurate):

TCR owns 870 Shares

Washington Nationals/Some other NATS owned enterprise owns 130 Shares

So PA doesn't own any shares of MASN; but because he owns a controlling stake in the O's; and the O's own a controlling stake in TCR; and TCR owns a controlling stake in MASN.. PA controls MASN, but PA doesn't personally own MASN. Now PA can sell off those 870 shares in MASN to himself or somebody else to divest MASN from the O's/TCR. But from everything I've read/gathered, PA doesn't own any shares of MASN directly.

This is really interesting.

So the O's have been able to receive rev share checks and get in the rev share draft lottery this year due to that clause that RSN proceeds aren't counted in Rev Share figures it seems. But the money has been going into the Orioles the whole time. So it's an accounting loophole more than an accounting shuffle between business entities.

[Can_of_corn]

I think McCourt was able to retain some level of control on a portion of the parking lots. It was a weird setup though.

Below is a pertinent bit of why the Dodgers deal could end up looking like a steal. It also speaks to the true value of MASN.

I posted a tidbit from this article months back, but here are some parts worth digesting and why you don't want to sell MASN separate from the O's...

Here...

So now you are seeing 5-7 million homes and what that can do for your bottom line.

Now, MASN reaches from Harrisburg to Charlotte - just start running the TV households from this link in that area of coverage.

I tried to get a figure of the total homes that receive MASN from the ask the orioles thread and was sidestepped.

[BrunoCherrytown]

I tried to get a figure of the total homes that receive MASN from the ask the orioles thread and was sidestepped.

You'd have to get a media kit from their ad sales department. They'd give you all the data you want on their household reach if you were a prospective ad buyer. If you did it through say Comcast, you'd just get Comcast's household reach for MASN.

[Can_of_corn]

You'd have to get a media kit from their ad sales department. They'd give you all the data you want on their household reach if you were a prospective ad buyer. If you did it through say Comcast, you'd just get Comcast's household reach for MASN.

So many different providers in the various States that I decided it wasn't worth the effort just to appease my curiosity.

[BrunoCherrytown]

So many different providers in the various States that I decided it wasn't worth the effort just to appease my curiosity.

Going to MASN directly gets you total reach across all providers. Doing it individually would be a bit cumbersome. It's not really needed though. You get an idea just from looking at the DMA's in the range. Just counting Bmore, DC, Harrisburg and the VA DMA's you are well into 5 million households.

You start counting Charlotte, Raleigh Durham, etc and you are blowing through 7 million and more and more. So regardless of what % of that is in MASN's range - you can see even conservatively ballparking it - it's starting to look like the Dodgers-lite. Just Bmore and DC = Chicago.

This isn't even conspiracy theory kind of stuff, it's literally basic arithmetic. Where we come up short (depending on your side of the conversation) are the monthly dues are short what other people have to pay to their cable providers. They're pegging the Dodgers at possibly $3.50 a month if they had decided to go the RSN route. We're at $2.14.

Not sure what YES and NESN are, but I'd guess they charge more because they have better overall programming and a more expensive product that's on the field every year.

[Frobby]

Wrong..

There's nothing super recent on the MD Dept of Assessments and Taxation; but what is there show that the "BALTIMORE ORIOLES LIMITED PARTNERSHIP" which is in fact the LLP that owns the team (with PA as majority stakeholder/General partner) is the Managing Partner of "TCR SPORTS BROADCASTING HOLDING, LLP" which is the Managing Partner of "MID-ATLANTIC SPORTS NETWORK"

So the teams themselves do in fact own MASN (at least I'm presuming on the Nationals half; but the O's for sure own their 87% of MASN); PA only owns MASN so much in that he owns the Orioles. But if you were to buy the Baltimore Orioles outright, you'd get MASN.

This is pretty interesting, and seems to contradict what the FCC was told by MASN's lawyers several years ago:

MASN is an RSN that owns the rights to produce and exhibit nearly all of the

games of two MLB franchises – the Baltimore Orioles and the Washington Nationals.28 The

network was established in 1996 by the Baltimore Orioles as a holding company for the Orioles’

television production and exhibition rights.29 In 2005, when MLB transferred the former

Montreal Expos to Washington, D.C. to become the Washington Nationals, the Orioles executed

a settlement agreement with MLB whereby the Orioles agreed to share their entire television

viewing territory with the Nationals.30 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.

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-2441A1.pdf

It is certainly better if things are structured the way you suggested they are.

[Can_of_corn]

Going to MASN directly gets you total reach across all providers. Doing it individually would be a bit cumbersome. It's not really needed though. You get an idea just from looking at the DMA's in the range. Just counting Bmore, DC, Harrisburg and the VA DMA's you are well into 5 million households.

You start counting Charlotte, Raleigh Durham, etc and you are blowing through 7 million and more and more. So regardless of what % of that is in MASN's range - you can see even conservatively ballparking it - it's starting to look like the Dodgers-lite. Just Bmore and DC = Chicago.

This isn't even conspiracy theory kind of stuff, it's literally basic arithmetic. Where we come up short (depending on your side of the conversation) are the monthly dues are short what other people have to pay to their cable providers. They're pegging the Dodgers at possibly $3.50 a month if they had decided to go the RSN route. We're at $2.14.

Not sure what YES and NESN are, but I'd guess they charge more because they have better overall programming and a more expensive product that's on the field every year.

I agree, getting a more specific number wasn't important to me and I also agree, and have stated, that MASN makes a huge profit from forced subscription rates.

Any idea why content such as MASN is mandatory for users and not optional?

[BrunoCherrytown]

I agree, getting a more specific number wasn't important to me and I also agree, and have stated, that MASN makes a huge profit from forced subscription rates.

Any idea why content such as MASN is mandatory for users and not optional?

It's a business decision for cable providers. If there were 5 cable providers in any given area, you'd have more choice on a channel basis. But since any area generally has 2 at best - for example with Cable I have Comcast Xfinity and AT&T Uverse down here. I'm a little ignorant here on this but I'm guessing most of Maryland is Verizon Fios and Comcast? Since there is a general lack of competition at the moment, Cable companies put those great cable channel packages together with shows about inbreds hand fishing, 9 shows on gold mining, women not knowing they are pregnant and then giving birth on the toilet, crrrrrazy housewives for just about any profession. Oh and crazy people who clip alot of coupons and then prep for Doomsday.

[TonySoprano]

PA tying payroll to attendance (and not using MASN money) makes a whole lot of sense right now.

I guess it depends upon from which side of his mouth he is talking. He has tied payroll to both.

It could be true. Apparently taxes going up next year is why George Lucas sold The Empire.

Angelos should sell now if he planned to sell sometime in the next five years anyway.

This point was kind of lost in the discussion but I think the taxes are a large incentive to sell now versus later.

Someone in the direct DMA's of MASN pays $2.14 a month to their cable provider regardless of whether they watch MASN or not. I don't know what it is for the outliers say Charlotte or Harrisburg or Raleigh Durham. So by taking 87% of that chunk from the Nats DMA it's a windfall.

I live in South Florida and I see Rays games listed (I don't watch them), but I'm guessing I pay Fox whatever South for the joy of having Rays games.

The value of MASN currently isn't in the ad dollars/ratings - it's in the subscription dues. The John Riggins show isn't a revenue driver or the DAP commercials as much as just MASN running on cable.

So by taking this income stream away from the O's ownership group, you are kneecapping them. The O's rights fees will not be paid on the "potential" of viewership in Charlotte. They'll be looking at the direct DMA because most cable advertising is bought in zones. Tier 3 is local. Tier 2 is regional, Tier 1 is national. Tier 3 is when you see your local car dealer, Tier 2 is when you see your regional Ford dealers offering a sale. Tier 1 is your Lexus December to Remember Event national campaign kind of advertising. Or Coors Light train commercials. But that doesn't mean Tier 3 advertising is not valuable to the owner of the network. It's very valuable. But the O's have not proven a strength lately in drawing from those outlier DMAs. So Tier 3 advertising rates in Charlotte on MASN for an O's games probably aren't that lucrative.

Not sure if I made that any clearer.

Correct me if I'm wrong, and I could be. In short, are you saying, the rights fees paid to the Nats would be significantly higher than the Orioles because of the value of the advertising revenues?

[BrunoCherrytown]

I guess it depends upon from which side of his mouth he is talking. He has tied payroll to both.

This point was kind of lost in the discussion but I think the taxes are a large incentive to sell now versus later.

Correct me if I'm wrong, and I could be. In short, are you saying, the rights fees paid to the Nats would be significantly higher than the Orioles because of the value of the advertising revenues?

More people in the direct Washington DMA paying monthly dues to their cable provider and more households by a long shot. It's a mix. Now if BMore can establish a record of really high TV ratings then you can get some swing but DC has such a ridiculously large edge over BMore here. If the Nats can really start to grow a fanbase watch out.

[Greg]

Angelos is in a position to screw the Nationals, as the Baltimore Sun writes, because the league specifically awarded him the power to do so:

MASN formed when MLB wanted to move the Montreal Expos to D.C. Angelos pointed out how much that would hurt his market and eventually leveraged his complaint into a remarkable deal. He owns most of the network, and his decreasing share will eventually bottom out at 67 percent (it's currently at 87).

So now the Nationals, an up-and-coming young club, want more money to help keep their core together. And Angelos, the owner of a neighboring and competing franchise, doesn't feel like giving them more money. He agreed to accept the team's relocation to Washington in exchange for being granted control of a moneymaking machine—and now, in addition to merely making money, he can protect his own team's regional market share by putting the squeeze on the competition's revenue stream.

In other words, Angelos got exactly what he negotiated for. And now the league is trying to get out of the deal through back channels, by "urging" Fox to buy their way out. But what can Fox offer that's more valuable than what Angelos already has?

[apollod]

This is pretty interesting, and seems to contradict what the FCC was told by MASN's lawyers several years ago:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-2441A1.pdf

It is certainly better if things are structured the way you suggested they are.

I'm on my tablet now and your link refuses to open on here for some reason. However if your quote is any indication, than its not contradictory at all as TCR was founded in 1996 and is a wholly owned subsidiary of the O's; so I think it's fair to say that they're mostly accurate. I'll have to look at the MASN paperwork again, but I'm pretty sure that wasn't filed until the early 2000's. MASN itself could just have been spinoff from TCR for the purposes of handling the whole Nats deal while TCR remains to handle other media stuff for the O's with the O's shares of MASN residing under TCR.

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