MLB seeks creative solution to MASN rights fees dispute between Nationals, Orioles

[sevastras]

An arbitration process is not going to bankrupt a billion $ company. If they rule in favor of the Nats it is going to court for a very long and painful time. MLB isnt going to mess with Pete too much, because Pete has a better chance of bankrupting MLB than they do of "fixing" this. I am with Petey on this one, the deal was made, not his problem. I dont care how much he makes, it is his and the Nats are going to be hard pressed to take it away. I see the Nats going after MLB for unscrupulously allowing them to get themselves into a bad business dea.

[eddie83]

To me there are alot of variables here. A big reason some of these teams are getting such big money like the Angels and Dodgers is because people like FOX don't want them starting their own network like the Orioles have done with MASN. Some teams are partners with FOX or Comcast in their regional sports network. Those huge companies are paying such big dollars to control the local sports tv rights. To me it is very hard to compare one market to another. Around here Comcast is the big cable provider. In some cities there are multiple cable companies. If Comcast got their hands on MASN they would controll all the local sports rights and be a the dominant provider of content. Baseball is the best sport of all because it plays so many games and is the only sports option in the summer. That is why baseball is so important to tv people because it provides alot of hours of live tv.

MLB has realized for along time the importance of RSN's. I think even baseball though didn't think that the TV rights would go this crazy. I read alot of stories that keep coming back to the DVR effect on advertisers. Advertisers love sports because people watch it live and don't fast foward through the commercials.

However this ends it better be good for the Orioles. Angelos was right to fight for the rights he got in his agreement.

[Frobby]

An arbitration process is not going to bankrupt a billion $ company. If they rule in favor of the Nats it is going to court for a very long and painful time. MLB isnt going to mess with Pete too much, because Pete has a better chance of bankrupting MLB than they do of "fixing" this. I am with Petey on this one, the deal was made, not his problem. I dont care how much he makes, it is his and the Nats are going to be hard pressed to take it away. I see the Nats going after MLB for unscrupulously allowing them to get themselves into a bad business dea.

The perceptions around here of Angelos' legal skills are pretty funny, like he's the only good lawyer in the world. He made his money on asbestos and tobacco cases, not complicated contract disputes. I guarantee you there are plenty of lawyers who can go toe-to-toe with him on an issue of this nature.

[REDMAN]

To me there are alot of variables here. A big reason some of these teams are getting such big money like the Angels and Dodgers is because people like FOX don't want them starting their own network like the Orioles have done with MASN. Some teams are partners with FOX or Comcast in their regional sports network. Those huge companies are paying such big dollars to control the local sports tv rights. To me it is very hard to compare one market to another. Around here Comcast is the big cable provider. In some cities there are multiple cable companies. If Comcast got their hands on MASN they would controll all the local sports rights and be a the dominant provider of content. Baseball is the best sport of all because it plays so many games and is the only sports option in the summer. That is why baseball is so important to tv people because it provides alot of hours of live tv.

MLB has realized for along time the importance of RSN's. I think even baseball though didn't think that the TV rights would go this crazy. I read alot of stories that keep coming back to the DVR effect on advertisers. Advertisers love sports because people watch it live and don't fast foward through the commercials.

However this ends it better be good for the Orioles. Angelos was right to fight for the rights he got in his agreement.

Television sports is in big demand because in the future you will be paying high dollars to watch sporting events,how many of you orioles fans will be fans when your paying ten dollars a game to watch!!!!!!!!!!!!!!!!!I remember when they said pay television was going to be better because there would be no commercial,look what we have now!It all come down to max profits and the PA knows, he is in the driver seat with the television rights to both teams!!!!!

[eddie83]

Here is an article about the Dodgers. It explains alot of the revenue sharing aspects. I find it interesting that MLB said $84 million was a fair value for the Dodgers TV rights increasing 4% a year.

http://espn.go.com/blog/playbook/dollars/post/_/id/2565/confusion-over-dodgers-endless-money

[Roll Tide]

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

Craig Calcaterra

Dec 14, 2012, 11:02 AM EST

29 Comments

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

So MLB is going to get a company to buy/take the Nats rights and start a new Nationals baseball network? How in the hell does that benefit the O's??? Angelos got this deal to allow baseball in DC and losing the benefit would water down the value of the TV market to the Orioles. Not that we see the profits being spent on the team. Which leads me to the point back them... Angelos was stupid for not fighting this back them. As a lawyer he should've fought this bad move for the Orioles. The price for selling the Nats rights should be billions of dollars.

[Br10n]

The contract that created MASN and was agreed upon by the Orioles, Major League Baseball and the Nationals is pretty much ironclad. It is believed to even include language that would prevent Selig from exercising his "best interests" powers to make any changes in it ? not that he has indicated any intention to do that.

The current dispute has arisen because the parties are in a "reset" period during which the rights fees have to be increased based on a specific formula called for in the contract. The Nationals feel that amount does not represent fair value for their television rights and are demanding much more. Not surprisingly, the Orioles like the current arrangement just fine and have no reason ? or legal motivation ? to compromise.

http://www.baltimoresun.com/sports/orioles/bs-sp-schmuck-orioles-column-1216-20121215,0,234407.column

So, you have an iron clad contract with a specific formula for the rights fees....good luck MLB and the Nats. The Os are not backing down.

[jabba72]

Is it possible that MLB by owners vote can force Angelos to sell? The articles says.... "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."

It sounds as though MLB wants MASN to be owned by someone other than Angelos.

[sevastras]

The perceptions around here of Angelos' legal skills are pretty funny, like he's the only good lawyer in the world. He made his money on asbestos and tobacco cases, not complicated contract disputes. I guarantee you there are plenty of lawyers who can go toe-to-toe with him on an issue of this nature.

I know full well how he made his money. I am not saying he would go toe to toe with anyone. His legal resources are endless. I would rather go into a fight with an army than toe to toe. When it comes to legal, you dont have to do it by yourself. He doesnt have to be the best at anything to make this cost more than MLB could feasibly absorb.

[Br10n]

I know full well how he made his money. I am not saying he would go toe to toe with anyone. His legal resources are endless. I would rather go into a fight with an army than toe to toe. When it comes to legal, you dont have to do it by yourself. He doesnt have to be the best at anything to make this cost more than MLB could feasibly absorb.

It also helps to have an iron clad contract on your side.

[baltfan]

The perceptions around here of Angelos' legal skills are pretty funny, like he's the only good lawyer in the world. He made his money on asbestos and tobacco cases, not complicated contract disputes. I guarantee you there are plenty of lawyers who can go toe-to-toe with him on an issue of this nature.

Only issue that I have with what you say is to the extent that you are implying the areas where he made his money are somehow less complicated than what you have characterized as complex contract disputes. I would venture to say the issues in the cases he litigated are far more complex than the issues in this dispute over a contract. Don't underestimate the capabilities of Angelos; it isn't like they didn't bring in the best of the best to litigate against him in those asbestos and tobacco cases. The tabacco litigation was an especially uphill battle against the best of the best.

Still, I agree there are other formidable lawyers that he couldn't just bowl over. Any litigation is always risky.

[Frobby]

Only issue that I have with what you say is to the extent that you are implying the areas where he made his money are somehow less complicated than what you have characterized as complex contract disputes. I would venture to say the issues in the cases he litigated are far more complex than the issues in this dispute over a contract. Don't underestimate the capabilities of Angelos; it isn't like they didn't bring in the best of the best to litigate against him in those asbestos and tobacco cases. The tabacco litigation was an especially uphill battle against the best of the best.

Still, I agree there are other formidable lawyers that he couldn't just bowl over. Any litigation is always risky.

This is all I meant. I'm certainly not saying that Angelos and his legal team can't do a great job in a contract case, just that he doesn't have a monopoly on excellent legal teams.

Anyway, I don't think MLB and the Orioles are in an adverse position. I think these efforts to "shop" MASN are just a prudent step to see if there is a "win-win" scenario where both the Orioles and the Nats benefit by getting more value for their equity interests and rights fees than they are getting by running their own stand-alone network.

[Frobby]

The Dodgers’ grabs only underline the dawdling irresponsibility of Commissioner Bud Selig in allowing the Nats to be held hostage to Orioles owner and MASN owner Peter Angelos for a full year (and counting) beyond any reasonable deadline for settling their dispute over the value of the Nats’ local TV rights.

MLB anointed a three-team fairness committee to study the issue — interminably. According to a reliable source: “Baseball has ruled on it. Both sides didn’t like the valuation. Washington hated it.” Who didn’t know that in advance? So the time was mostly wasted. Thanks.

Now, MLB has asked a private investment bank to seek potential new owners for all of MASN, which would, in theory, take Angelos out of the picture. What a great idea, Bud — for 18 months ago.

For now, the most likely potential buyer would be Fox. Would Angelos sell? Normally, I’d say no, or only under threat of “best interests of the game” powers that Selig is loath to use for fear of a court case that might prompt Angelos to go all Al Davis and embarrass MLB with dirty laundry.

However, irony never sleeps. Someone once said, “Sell high.” And MASN may never again be worth what it is now with Fox about to close on the $6 billion Dodgers deal — the bonanza swung by Kasten’s group.

http://www.washingtonpost.com/sports/nationals/dodgers/2012/12/14/8d81d5ce-45ff-11e2-8061-253bccfc7532_story.html

So, if this article is to be believed, the rights fee "reset" decision has already occurred.

[TonySoprano]

http://www.washingtonpost.com/sports/nationals/dodgers/2012/12/14/8d81d5ce-45ff-11e2-8061-253bccfc7532_story.html

So, if this article is to be believed, the rights fee "reset" decision has already occurred.

What's the point of having a commission where the decisions are non-binding? Speaking of which....

Let's keep in mind that the panel looking at this isn't three retired judges with no stake in the outcome. The panel is three other MLB owners and they have a huge stake in the outcome, because they want the market for rights fees to be robust. It doesn't help them to have MASN paying the Nats and Orioles a below-market rights fee.

Those three owners apparently voted on the low end of the scale if "Washington hated it." By going for an outside bidder, Bud's trying to find another way for the Nats to get their money.

[Absltgreek]

http://www.washingtonpost.com/sports/nationals/dodgers/2012/12/14/8d81d5ce-45ff-11e2-8061-253bccfc7532_story.html

So, if this article is to be believed, the rights fee "reset" decision has already occurred.

Sounds like higher than the O's wanted, way lower than the Nats wanted it, but overall way in Baltimore's favor.