Schmuck Gives a Dose of Financial Reality

[El Gordo]

It would be a pretty good excuse, IMO. But it doesn't excuse anything that happened before 2012, when the rights fees were known.

We weren't close to contending then.

[Redskins Rick]

Because Peter owns the rights to Nationals broadcasts at a 70% level forever, and ever, and ever. I think.

He got that in exchange for selling his rights to the DC market for MLB purposes.

Ah, did not know it was never ending 70%

[TonySoprano]

Because Peter owns the rights to Nationals broadcasts at a 70% level forever, and ever, and ever. I think.

He got that in exchange for selling his rights to the DC market for MLB purposes.

The old expression "deals are made to be broken" may apply. The deal can be changed in whatever new contract he would sign with Fox Sports. If he were to sell out, how could he dictate what FOX Sports pays one and not the other? Therefore, what he is afraid of is Washington being able to sustain a top 10 payroll.

In his favor is that MLB gave away Washington's territory in the post-Senators years. Peter bought that revised territory, and then subsequently sold it back to MLB in exchange for the MASN deal AND a guaranteed $200M minimum profit should he ever decide to sell the team.

[Larry18]

The stalemate is going on two years, nothing in this is cut and dry.

[Frobby]

Because Peter owns the rights to Nationals broadcasts at a 70% level forever, and ever, and ever. I think.

He got that in exchange for selling his rights to the DC market for MLB purposes.

Well, not exactly. The Orioles' share of MASN will never drop below 67%, but MASN still has to pay rights fees to both teams equally, and the Nats have the right to have an arbitration to determine a new rights we once every five years.

Just to put this in its simplest form, let's assume MASN earns revenues of $160 mm and pays rights fees of $30 mm to each team, and has no other costs. That leaves $100 mm to be divided between the O's and Nats. Today, the O's own about 83% of MASN (it lowers by 1% a year until it hits 67%). So, the O's would get $83 mm + $30 mm = $113 mm and the Nats $17 mm + $30 mm = $47 mm. But now assume some arbitrator comes along and decides the rights fees really ought to be $50 mm per team, leaving only $60 mm in profits to divide. Now the O's get about $50 mm in profits and the Nats get $10 mm, but the total including the rights fees is $50 m + $50 mm = $100 mm for the Orioles and $10 mm + $50 mm = $60 mm for the Nats. In that scenario, the Nats are getting 37.5% of the MASN revenues even though they only own 17% of the team. Even in the first scenario, the Nats are getting 29.4% of the revenue while owning only 17% of the team. Once the Orioles' ownership has been reduced to 67% (which doesn't happen until 2030), the Nats would be getting probably 45% of the revenue, plus or minus a few percentage points.

Anyway, it would be easy enough to figure out a percentage split that would mimic how the Orioles and Nats divide the pie, but the pie itself probably would be bigger with a real network like FOX running the show instead of the amateurs at MASN.

[weams]

Well, not exactly. The Orioles' share of MASN will never drop below 67%, but MASN still has to pay rights fees to both teams equally, and the Nats have the right to have an arbitration to determine a new rights we once every five years.

Just to put this in its simplest form, let's assume MASN earns revenues of $160 mm and pays rights fees of $30 mm to each team, and has no other costs. That leaves $100 mm to be divided between the O's and Nats. Today, the O's own about 83% of MASN (it lowers by 1% a year until it hits 67%). So, the O's would get $83 mm + $30 mm = $113 mm and the Nats $17 mm + $30 mm = $47 mm. But now assume some arbitrator comes along and decides the rights fees really ought to be $50 mm per team, leaving only $60 mm in profits to divide. Now the O's get about $50 mm in profits and the Nats get $10 mm, but the total including the rights fees is $50 m + $50 mm = $100 mm for the Orioles and $10 mm + $50 mm = $60 mm for the Nats. In that scenario, the Nats are getting 37.5% of the MASN revenues even though they only own 17% of the team. Even in the first scenario, the Nats are getting 29.4% of the revenue while owning only 17% of the team. Once the Orioles' ownership has been reduced to 67% (which doesn't happen until 2030), the Nats would be getting probably 45% of the revenue, plus or minus a few percentage points.

Anyway, it would be easy enough to figure out a percentage split that would mimic how the Orioles and Nats divide the pie, but the pie itself probably would be bigger with a real network like FOX running the show instead of the amateurs at MASN.

But if the Nationals do not actually earn that type of revenue, or if the Arbitrator sees that MASN is run in an amateur way, it appears that my statement was correct. Other than the three percent of ownership the the National would get at the 2030 mark. Washington has lost several baseball teams. They might lose this one too.

[Frobby]

But if the Nationals do not actually ear that type of revenue, or if the Arbritator sees that MASN is run in an amateur way, it appears that my statement was correct. Other than the three percent of ownership the the National would get at the 2030 mark. Washington has lost several baseball teams. They might lose this one too.

Anything can happen over a long enough period of time. But at present, the Nats appear to be doing just fine. I wouldn't hold my breath waiting for them to move. The original Senators had 4 winning seasons in 25 years before they moved, closing out with 8 losing seasons in a row. The expansion Senators had a losing season 10 times in 11 years. So together, that's five winning seasons in the last 36 years there was a team in DC, before this iteration. Is it really any wonder the fans stopped coming? The O's got a pretty good taste of how that works between 1998 and 2011.

[weams]

Anything can happen over a long enough period of time. But at present, the Nats appear to be doing just fine. I wouldn't hold my breath waiting for them to move. The original Senators had 4 winning seasons in 25 years before they moved, closing out with 8 losing seasons in a row. The expansion Senators had a losing season 10 times in 11 years. So together, that's five winning seasons in the last 36 years there was a team in DC, before this iteration. Is it really any wonder the fans stopped coming? The O's got a pretty good taste of how that works between 1998 and 2011.

Very true. Very. I'm sure they will do great economical and at some point the built in protections will no longer prop up the Orioles to the point that they can be viable that close to them. It is a very sad thought.

[TonySoprano]

But if the Nationals do not actually earn that type of revenue, or if the Arbitrator sees that MASN is run in an amateur way, it appears that my statement was correct. Other than the three percent of ownership the the National would get at the 2030 mark. Washington has lost several baseball teams. They might lose this one too.

C'mon Weams, you're better than this. Baltimore lost two teams named the Colts, the second one in the middle of the night. Should I presume they'll lose the Ravens if they go on an extended losing run? Washington lost two baseball teams. The first was due to a racist owner who didn't like the complexion of the neighborhood. Bob Short traded away a lot of the team in '70 spiking attendance even further for '71 so he could petition to leave town.

[Redskins Rick]

C'mon Weams, you're better than this. Baltimore lost two teams named the Colts, the second one in the middle of the night. Should I presume they'll lose the Ravens if they go on an extended losing run? Washington lost two baseball teams. The first was due to a racist owner who didn't like the complexion of the neighborhood. Bob Short traded away a lot of the team in '70 spiking attendance even further for '71 so he could petition to leave town.

Thanks to Bob Short. Peter Angelos can never be called the worse owner in MLB history.

[Frobby]

Very true. Very. I'm sure they will do great economical and at some point the built in protections will no longer prop up the Orioles to the point that they can be viable that close to them. It is a very sad thought.

I feel both teams can do just fine. The O's would be in a better position if the Nats had never moved to DC, but the MASN deal helps them a lot, and if the deal is restructured at some point so that the TV rights are sold to someone who can generate more total revenue than MASN, I am sure Angelos will find a way for the Orioles to keep more than 50% of whatever the two teams get. As it is, the O's were worth about $365 mm when the Nats moved here, and they are worth a lot more than that today. A lot of that has to do with the O's share of MLB.com and national TV deals, but still, the Orioles aren't exactly hurting.

[weams]

C'mon Weams, you're better than this. Baltimore lost two teams named the Colts, the second one in the middle of the night. Should I presume they'll lose the Ravens if they go on an extended losing run? Washington lost two baseball teams. The first was due to a racist owner who didn't like the complexion of the neighborhood. Bob Short traded away a lot of the team in '70 spiking attendance even further for '71 so he could petition to leave town.

Thanks to Bob Short. Peter Angelos can never be called the worse owner in MLB history.

I just always assumed that Washington was inately unable to support a Baseball team on it's own. And that is why MLB consolidated the territory. I guess I was not better than that.

Interesting light reading.

[weams]

I feel both teams can do just fine. The O's would be in a better position if the Nats had never moved to DC, but the MASN deal helps them a lot, and if the deal is restructured at some point so that the TV rights are sold to someone who can generate more total revenue than MASN, I am sure Angelos will find a way for the Orioles to keep more than 50% of whatever the two teams get. As it is, the O's were worth about $365 mm when the Nats moved here, and they are worth a lot more than that today. A lot of that has to do with the O's share of MLB.com and national TV deals, but still, the Orioles aren't exactly hurting.

Good then everything is fine. Thanks.

[Redskins Rick]

I just always assumed that Washington was inately unable to support a Baseball team on it's own. And that is why MLB consolidated the territory. I quess i was not better than that.

Short was a fool that made extremely stupid decisions, he also didnt have deep pockets like most of the other owners.

Like Irsay did in Baltimore, he played the "card". Fans won't support me and my team, then I will take my guys and go elsewhere.

Neither could be used as evidence that the town did anything wrong.

[Frobby]

Short was a fool that made extremely stupid decisions, he also didnt have deep pockets like most of the other owners.

Like Irsay did in Baltimore, he played the "card". Fans won't support me and my team, then I will take my guys and go elsewhere.

Neither could be used as evidence that the town did anything wrong.

Baseball was very different then. The expansion Senators never drew more than 918,000 in a season (that happened in their one winning season, 1969). They drew under 600,000 fans in five separate seasons. They finished in the bottom 3 teams in attendance in every year but two. Bottom line, the team stank, and DC did not have a fan base that would support a lousy team.