New Summary of Os Nats MASN TV Rights

[hoosiers]

http://www.kansascity.com/2013/01/24/4029709/baseball-tv-deals-growing-more.html

http://www.bizjournals.com/cincinnati/print-edition/2012/04/20/cincinnati-reds-may-get-more-tv-green.html?page=all

http://msn.foxsports.com/mlb/story/baseball-officials-will-decide-division-of-MASN-tv-fees-between-baltimore-orioles-and-washington-nationals-041812

Not sure if these articles is new to the board, particularly the one summarizing the TV rights fees by team, but IMO, they allow for some high level calculations to understand how much Peter Angelos has been profiting from MASN as well as some speculation on surrounding issues.

The recent explosion of MLB local tv rights fees in current deals is quite telling. One thing to keep in mind is that not only are the teams achieving substantial increases in fees, but they are also getting shares of ownership in the networks winning the bidding.

Some key data points/very recent deals IMO are the following:

Small market San Diego just signed a deal for $50M annually plus 20% ownership in the network.

Cleveland just sold their network for $230M and annual fees of $40M.

Speculation from one attached article is that the small market Cincinnati Reds should get a comparable new deal to San Diego - around $50M or possibly more.

IMO, these two deals show the Orioles rights to have a market value in the $45M-$50M range.

Among larger market teams, the most recent deals are the Astros and Rangers at $80M each and the Dodgers $250M and Angels $147M. I think the Nats could probably get an annual deal near $80M-$100M.

The article states that teams must share 34% of the revenue from their local tv rights deals. I do not believe I am making a huge leap of logic when seeing the claimed rights fees of NYY ($90M), NYM ($60M), Cubs ($50M) and Braves ($20M) when I say these teams have deliberately set up deals between likely related entities of the teams and their networks (like the Os and MASN) to keep this revenue sharing component artificially low.

IMO, these teams alone could probably obtain well over $200M in market rate deals - costing the other franchises $7M annually. The Cards, Seattle, ChiSox and several other teams would be looking at massive increases as well.

How does this impact the Orioles, Peter Angelos (representing the owners) and our team payroll?

By my general estimation, the MASN $29M annual payment to the Os is $20M below market while the MASN $29M to the Nats is at least $50M below market. I will also point out that these networks presumably make a good PROFIT on their costs (programming fees, rights fees, etc) which MASN is making - which I will estimate conservatively IMO at only $10M per team. So, those numbers would imply MASN has been and is currently generating an annual profit of $90M of which PA is reaping approx. 85% - or north of $75M ANNUALLY with the owners of the Nats getting the rest.

So, there are cross-currents running here:

- PA probably does not want to give out market rates to the Os and Nats in order to avoid sharing 34% of that increase with other teams.

- the Nats are receiving $29M in rights fees and approx. $15M in MASN profits - while this reflects PA allowing the Nats into DC and acknowledging that the Nats also own a decent portion of the MASN network, the Nats are probably netting at least $50M less than they should annually - of which $17M they would share with the league.

- I believe from other articles that PA has a loan to the Orioles. I wonder if the basis of the loan is for PA to provide the Os with some $ that he is pocketing from MASN while shorting the Os on the rights fees.

- the Os and Nats are each being shorted $7M annually from four teams sharing below market $ from their TV deals. This amount is similar to the $ PA would give to the MLB pot for an increase in Orioles local TV rights fees to $50.

- Granting all of the above, it makes me think that folks who believe it is okay for our payroll to go up in the $105M range when the Os will see a $25M increase in fees from the national TV rights while also knowing Os ownership is also probably reaping in the neighborhood of $70M annually from MASN.

$75M is a lot of freaking money - ANNUALLY. A $25M increase in national MLB TV rights.

These two numbers make any discussion of Os ownership allowing an increase in payroll into the $105M range or so bring to my mind one word - GREED. We are talking about an ownership that could add 2 $15M all-star players to our 25 man roster and still achieve profits (not including those earned by the Orioles) near $50M.

[Can_of_corn]

One mistake, the Braves are actually stuck in a very poor deal.

[weams]

http://www.kansascity.com/2013/01/24/4029709/baseball-tv-deals-growing-more.html

http://www.bizjournals.com/cincinnati/print-edition/2012/04/20/cincinnati-reds-may-get-more-tv-green.html?page=all

http://msn.foxsports.com/mlb/story/baseball-officials-will-decide-division-of-MASN-tv-fees-between-baltimore-orioles-and-washington-nationals-041812

Not sure if these articles is new to the board, particularly the one summarizing the TV rights fees by team, but IMO, they allow for some high level calculations to understand how much Peter Angelos has been profiting from MASN as well as some speculation on surrounding issues.

The recent explosion of MLB local tv rights fees in current deals is quite telling. One thing to keep in mind is that not only are the teams achieving substantial increases in fees, but they are also getting shares of ownership in the networks winning the bidding.

Some key data points/very recent deals IMO are the following:

Small market San Diego just signed a deal for $50M annually plus 20% ownership in the network.

Cleveland just sold their network for $230M and annual fees of $40M.

Speculation from one attached article is that the small market Cincinnati Reds should get a comparable new deal to San Diego - around $50M or possibly more.

IMO, these two deals show the Orioles rights to have a market value in the $45M-$50M range.

Among larger market teams, the most recent deals are the Astros and Rangers at $80M each and the Dodgers $250M and Angels $147M. I think the Nats could probably get an annual deal near $80M-$100M.

The article states that teams must share 34% of the revenue from their local tv rights deals. I do not believe I am making a huge leap of logic when seeing the claimed rights fees of NYY ($90M), NYM ($60M), Cubs ($50M) and Braves ($20M) when I say these teams have deliberately set up deals between likely related entities of the teams and their networks (like the Os and MASN) to keep this revenue sharing component artificially low.

IMO, these teams alone could probably obtain well over $200M in market rate deals - costing the other franchises $7M annually. The Cards, Seattle, ChiSox and several other teams would be looking at massive increases as well.

How does this impact the Orioles, Peter Angelos (representing the owners) and our team payroll?

By my general estimation, the MASN $29M annual payment to the Os is $20M below market while the MASN $29M to the Nats is at least $50M below market. I will also point out that these networks presumably make a good PROFIT on their costs (programming fees, rights fees, etc) which MASN is making - which I will estimate conservatively IMO at only $10M per team. So, those numbers would imply MASN has been and is currently generating an annual profit of $90M of which PA is reaping approx. 85% - or north of $75M ANNUALLY with the owners of the Nats getting the rest.

So, there are cross-currents running here:

- PA probably does not want to give out market rates to the Os and Nats in order to avoid sharing 34% of that increase with other teams.

- the Nats are receiving $29M in rights fees and approx. $15M in MASN profits - while this reflects PA allowing the Nats into DC and acknowledging that the Nats also own a decent portion of the MASN network, the Nats are probably netting at least $50M less than they should annually - of which $17M they would share with the league.

- I believe from other articles that PA has a loan to the Orioles. I wonder if the basis of the loan is for PA to provide the Os with some $ that he is pocketing from MASN while shorting the Os on the rights fees.

- the Os and Nats are each being shorted $7M annually from four teams sharing below market $ from their TV deals. This amount is similar to the $ PA would give to the MLB pot for an increase in Orioles local TV rights fees to $50.

- Granting all of the above, it makes me think that folks who believe it is okay for our payroll to go up in the $105M range when the Os will see a $25M increase in fees from the national TV rights while also knowing Os ownership is also probably reaping in the neighborhood of $70M annually from MASN.

$75M is a lot of freaking money - ANNUALLY. A $25M increase in national MLB TV rights.

These two numbers make any discussion of Os ownership allowing an increase in payroll into the $105M range or so bring to my mind one word - GREED. We are talking about an ownership that could add 2 $15M all-star players to our 25 man roster and still achieve profits (not including those earned by the Orioles) near $50M.

Call it greed. Or simply the American way. I am sure that Mr. Angelos wants to win. And wants to profit.

[weams]

Orioles estimated $37 million in rights fees for 2013

[TonySoprano]

Orioles estimated $37 million in rights fees for 2013

That's so Pete can keep his money in his MASN side of the books, and cry poor to MLB.

There won't be two different rights fees. The Nats and Orioles have to be paid the same under the contract.

[Nigel Tufnel]

That's so Pete can keep his money in his MASN side of the books, and cry poor to MLB.

Which makes sense, I guess, if he has to share 34% of the O's rights fees with the rest of MLB.

[TonySoprano]

Which makes sense, I guess, if he has to share 34% of the O's rights fees with the rest of MLB.

Eventually, as in fifteen years from now, he'll have to share that much with the Nationals. Right now they own 18%.

[Nigel Tufnel]

The article states that teams must share 34% of the revenue from their local tv rights deals. I do not believe I am making a huge leap of logic when seeing the claimed rights fees of NYY ($90M), NYM ($60M), Cubs ($50M) and Braves ($20M) when I say these teams have deliberately set up deals between likely related entities of the teams and their networks (like the Os and MASN) to keep this revenue sharing component artificially low.

Eventually, as in fifteen years from now, he'll have to share that much with the Nationals. Right now they own 18%.

I was referring to the above part of Hoosiers's post, which I believe is separate from the O's/Nats MASN split.

[TradeAngelos]

Estimates a year ago were that Pete was reeling in about $50 million a year from the deal. Looks like that was low.

Come on apologists who claim we "can't afford" over $100 million payroll. Step right up. With the $25 million from MLB and what the King is pulling in from MASN in 2014, that covers it right there. Should we get into all the other revenue, soaring attendance, merchandise and associated money from concessions and such? Should we get into all the money from 2006-2013 that is probably about a half a BILLION or so that our fearless leader has pocketed?

Oh I forgot, it isn't going to change so we just have to deal with it and shouldn't DARE complain. Fall in line like the good little soldier fans we are supposed to be, getting ripped off year after year so Pete can put another billion in the bank. Just be quiet, don't rock the boat and try to spin it like the fanbase isn't getting treated like.....nevermind.

You all can continue to line his pockets, but I won't.

[weams]

Estimates a year ago were that Pete was reeling in about $50 million a year from the deal. Looks like that was low.

Come on apologists who claim we "can't afford" over $100 million payroll. Step right up. With the $25 million from MLB and what the King is pulling in from MASN in 2014, that covers it right there. Should we get into all the other revenue, soaring attendance, merchandise and associated money from concessions and such? Should we get into all the money from 2006-2013 that is probably about a half a BILLION or so that our fearless leader has pocketed?

Oh I forgot, it isn't going to change so we just have to deal with it and shouldn't DARE complain. Fall in line like the good little soldier fans we are supposed to be, getting ripped off year after year so Pete can put another billion in the bank. Just be quiet, don't rock the boat and try to spin it like the fanbase isn't getting treated like.....nevermind.

You all can continue to line his pockets, but I won't.

I am sure he could afford to spend as much as he chose to. Several other teams also make profits. Especially those in large markets with FOX deals. And large markets with RSNs.

By the way. Being a baseball fan of any team costs money, and lines someone's pockets. Most rich guys get richer with their money.

[Can_of_corn]

Can you name one apologist on here who claims the Orioles can't afford over a 100 million payroll?

You can complain. It's annoying but it's your right. It's annoying because your complaining won't change anything. It's just reading the same old complaints from the same old people. Don't line his pockets! I guess that means you don't watch any of the games on TV or go to any games, right?

Hope his cable provider doesn't offer MASN, he will be forced to drop it.

[weams]

Can you name one apologist on here who claims the Orioles can't afford over a 100 million payroll?

He might be referring to some here who project next year's budget to be under 110 million. Or people who did not want Pujols and Hamilton when they were up for bid. Or anyone who does not have an anti-Angelos screen name. Or anyone that does not work for a 5000 watt radio station.

[Dark Helmet]

He might be referring to some here who project next year's budget to be under 110 million. Or people who did not want Pujols and Hamilton when they were up for bid. Or anyone who does not have an anti-Angelos screen name. Or anyone that does not work for a 5000 watt radio station.

Pujols and Hamilton weren't the only FA available. There have been plenty of FA the Orioles could have signed that could have helped. I'm not sure why people always mention the most exspensive names. If a poster suggests spending money, its always those names thrown back at them.

[weams]

Pujols and Hamilton weren't the only FA available. There have been plenty of FA the Orioles could have signed that could have helped. I'm not sure why people always mention the most exspensive names. If a poster suggests spending money, its always those names thrown back at them.

Their are plenty of folks I would have liked him to spend money on other than those guys. I was just not on the Victorino train.

[Can_of_corn]

Their are plenty of folks I would have liked him to spend money on other than those guys. I was just not on the Victorino train.

I would have rather had Koji at 4.25 then Johnson at 6.5.