Schmuck Gives a Dose of Financial Reality

[Art Wing]

Well, I am not sure what you mean by it. Angelos does not own MASN. It is owned 83% by Baltimore Orioles LP and 17% by WN Partner, the Nationals' ownership vehicle. If MASN issues dividends, 83% goes to the Orioles. So where is the ethics issue here?

Originally Posted by Frobby

According to filings made with the FCC (which I consider pretty reliable), it is the owners of the Orioles and Nationals who own MASN. Remember, the Orioles have a bunch of minority owners, they are not 100% owned by Angelos. From what I saw in the FCC filings, all the Orioles owners appear to have an ownership stake in MASN, not just Angelos, though it wasn't crystal clear.

There could be terms in the ownership documents that require owners of MASN to sell in the event that they sell their Orioles/Nationals shares. We really don't know.

The Secretary of State's Website shows that MASN is owned by TCR SPORTS BROADCASTING HOLDING, LLP.

http://sdatcert3.resiusa.org/ucc-cha...+++++&TabNum=1

Which lists PA as the agent. A filing in 2001 shows his signature as the President of TCR Sports Broadcasting.

http://sdatcert3.resiusa.org/ucc-cha...20LLP&source=1

I'm typing on my phone so sorry if the pasting job isn't good but here's a segment of your conversation with Fan4Life.

MASN profits should be synonymous with the Orioles financial workings in my opinion. I'll be the first to admit I'm not an expert but will we ever see the "real" numbers in order to determine exactly what's happening? Probably not so we're forced to make assumptions based on what we're able to see.

[Flosman]

CoC the O's were worth a hell of a lot more than 250 million in 2009. The Nats deal guaranteed 360 and Forbes valued the franchise at 398 in '08. MLB established the value of MASN at around 750 million dollars by what they actually paid for their initial stake which became the Nats stake. So I don't think your numbers compute. Your quote valuing the O's 100 to 150 million under what the guaranteed value is really calls the entire quote into question.

Not slamming you I understand you are just providing someone else's views but they are clearly and provably incorrect.

[Art Wing]

How is the Baltimore Orioles LP arrangement different with MASN than with the Orioles? Does Angelos own the same percentage of each? While I get that the Nats get 17% and growing of the MASN profits, that leaves a healthy percentage for Angelos and pals to divide. The question I have is which entity has more profits, the Orioles MLB, or the Orioles share of MASN. I don't think we can get the answer to that one. There was supposed to be some sharing of the MASN money with the franchise, that is, if you choose to believe what Angelos had initially assured he would do.

Must spread rep. Well said my friend.

[weams]

I think we can all agree that all the Angelos family members are wealthy. I think we can agree that the Orioles and Masn are both profitable investments. I think everyone here that is not a Nationals fan at heart would agree that we want the Orioles to spend enough money to be good. So that we see winning baseball with a chance at the playoffs and if fortunate, the World Series.

[hoosiers]

MASN profits should be synonymous with the Orioles financial workings in my opinion. I'll be the first to admit I'm not an expert but will we ever see the "real" numbers in order to determine exactly what's happening? Probably not so we're forced to make assumptions based on what we're able to see.

The Orioles and MASN are two separate entities which involved separate investments/risk and each should be entitled to be run at a profit.

However, IMO, both are being run at substantial/excessive profits while the on-field investment in the Orioles has been - for several years - below optimal - especially relative to similar sized franchises and relative to franchise profits (as estimated by independent analysis like that done by the good folks at Forbes).

MASN appears to send the Orioles at least $20M less than the fair market value of the local TV rights.

[Frobby]

Originally Posted by Frobby

According to filings made with the FCC (which I consider pretty reliable), it is the owners of the Orioles and Nationals who own MASN. Remember, the Orioles have a bunch of minority owners, they are not 100% owned by Angelos. From what I saw in the FCC filings, all the Orioles owners appear to have an ownership stake in MASN, not just Angelos, though it wasn't crystal clear.

You have a good memory, but I was subsequently proven wrong by another poster. Here's a document showing the correct ownership of TCR Broadcasting (which is the real name of MASN): http://www.bizapedia.com/wv/TCR-SPORTS-BROADCASTING-HOLDING-LLP.html

General Partner

Baltimore Orioles Limited Partnership

333 W. Camden Street

Baltimore, MD 21201

Partner

Baltimore Orioles, Inc.

333 W. Camden Street

Baltimore, MD 21201

Partner

Wn Partner, LLC

333 W. Camden Street

Baltimore, MD 21201

Baltimore Orioles, LP is the entity that does business as the Baltimore Orioles. http://www.brownwelsh.com/HPLowry_archive/baltimoreorioles.com_DECISION.pdf

Now, I am not sure whether "Baltimore Orioles, Inc." is owned by Baltimore Orioles, LP or by the owners of Baltimore Orioles, LP.

[mrbraswel3]

This year isn't a good example, I have convinced myself that the Rays' are going for it this season.

Theory could be true, but mine currently is the trade market is just not there for such deals in most cases right now. The value of the cost controlled prospect has increased enormously making such trades less enticing for both sides.

This could switch quickly with injury, or maybe in-season with the trade deadline and a team seeing the light at the end of the tunnel in a much more realistic and immediate view.

[Can_of_corn]

Theory could be true, but mine currently is the trade market is just not there for such deals in most cases right now. The value of the cost controlled prospect has increased enormously making such trades less enticing for both sides.

This could switch quickly with injury, or maybe in-season with the trade deadline and a team seeing the light at the end of the tunnel in a much more realistic and immediate view.

Very true, but I was also factoring in the Bell trade and Balfour signing.

That and the new Mayor.

[SteveO]

I have at times been critical of the lack of substantial moves to improve/add to the solid base of talent that this team possesses this offseason. Most my ire is directed at Scrooge McAngelos but I will admit to being annoyed at times with plodding pace and methodical pace of a DD offseason. Its kinda like being a kid at Christmas, you know uncle Dan is prob not going to give you that XBox one you wanted but he is likely going to come up with some things to give you that end up being far more useful and fun than you thought at first glimpse. I expect Dan will still make a solid move or two. He is just playing the cards he has and trying to stretch his resources as much as possible. I get that. Its frustrating and should not be happening to this extent IMO but that's not his fault obviously. That belongs in the wheelhouse of he who shall not be named.

Far as what DD said ....what's wrong with it? EVERY team should aspire to develop and maintain a solid developmental pipeline. Lets be real here, even if the O's spent what many of us think they should on payroll (would make a cool poll IMO to measure what peoples expectations actually are) they would never be able to compete with the likes of Boston and NY in terms of resources. This by definition implies that DD is a million percent correct in his assertions. Given what resources he has if he is not successful developing talent he will never have enough resources to compensate for that. We can argue if the O's need to invest more in FA at strategic times but I think we can all agree that for this organization to be successful long term they must draft, trade for and develop young cheap controllable talent. I love that DD gets that and does not bother to blow smoke up our wazoos and tells us exactly how it is.

[Going Underground]

Firstly, the MASN front has been quiet. There is nothing new to report now. This is an incredibly complicated dispute between two teams. An unhappy team could sue, perhaps the worst of outcomes for MLB, so I can imagine the league is being even more thorough. Could you imagine the discovery period of a trial between two teams and what guarded information, such as detail financial records, could be exposed? And, remember, this is Bud Selig’s final season as commissioner. He, and MLB, take their time, especially on complex issues.

But, to answer the question: The Nationals are supposed to receive compensation during these disputed years as prescribed by the existing MASN contract and compensation formula. So, as we’ve reported before, the rights fee was $29 million in 2011, $34 million in 2012 and $37 million in 2013. There was an equity stake payment of $8 million in 2013. In 2014, those numbers should rise. The Nationals’ stake in the network rises by one percent each season, but capped at 33 percent, will be at 15 percent for 2014.

http://www.washingtonpost.com/blogs/nationals-journal/wp/2014/01/02/nationals-qa-masahiro-tanaka-bryce-harper-danny-espinosa-masn/

[Redskins Rick]

I think we can all agree that all the Angelos family members are wealthy. I think we can agree that the Orioles and Masn are both profitable investments. I think everyone here that is not a Nationals fan at heart would agree that we want the Orioles to spend enough money to be good. So that we see winning baseball with a chance at the playoffs and if fortunate, the World Series.

Well said! Weams!

I would love to see the Nationals make the WS at the same time as the Birds, not so I can root for them, but so we can have a Beltway series of our own. How cool would it be, to able to get a ticket to both stadiums and root for the Orioles onto victory in the visiting team stadium!!!!!!!!

[TonySoprano]

But, to answer the question: The Nationals are supposed to receive compensation during these disputed years as prescribed by the existing MASN contract and compensation formula. So, as we’ve reported before, the rights fee was $29 million in 2011, $34 million in 2012 and $37 million in 2013. There was an equity stake payment of $8 million in 2013. In 2014, those numbers should rise. The Nationals’ stake in the network rises by one percent each season, but capped at 33 percent, will be at 15 percent for 2014.

http://www.washingtonpost.com/blogs/nationals-journal/wp/2014/01/02/nationals-qa-masahiro-tanaka-bryce-harper-danny-espinosa-masn/

rep for finding this.

Two things of note:

1)$37M rights fee payment in 2013 up from $29M

2) 2013 Nats equity $8M = 14%. Therefore, the 2013 equity payment to Angelos and pals = $49M. If profits were truly $57M, then under MASN the Orioles and Nats will not see a big spike in rights fees. However, it does show how much MASN money was available to send to the Orioles....if the LLP so desired, and had previously promised. But after all, we know MASN really is just a fantasy, it's not the real thing, but....

<iframe width="420" height="315" src="//www.youtube.com/embed/hhJg1finpyU" frameborder="0" allowfullscreen></iframe>

[Frobby]

rep for finding this.

Two things of note:

1)$37M rights fee payment in 2013 up from $29M

2) 2013 Nats equity $8M = 14%. Therefore, the 2013 equity payment to Angelos and pals = $49M. If profits were truly $57M, then under MASN the Orioles and Nats will not see a big spike in rights fees. However, it does show how much MASN money was available to send to the Orioles....if the LLP so desired, and had previously promised. But after all, we know MASN really is just a fantasy, it's not the real thing, but....

I'm pretty sure the $37 mm figure for rights fees and $8 mm equity stake has been reported a few times, for example, here: http://www.washingtonpost.com/blogs/nationals-journal/wp/2012/11/27/as-the-dodgers-hit-paydirt-the-nationals-masn-talks-remain-in-limbo/ What's unclear to me is, if the rights fees for 2012 and 2013 are in dispute (which I understand they are), then how can MASN even calculate what its profit was for the year to be divided between the two equity stakeholders? I don't have a high degree of confidence in the accuracy of these reports.

[hoosiers]

I'm pretty sure the $37 mm figure for rights fees and $8 mm equity stake has been reported a few times, for example, here: http://www.washingtonpost.com/blogs/nationals-journal/wp/2012/11/27/as-the-dodgers-hit-paydirt-the-nationals-masn-talks-remain-in-limbo/ What's unclear to me is, if the rights fees for 2012 and 2013 are in dispute (which I understand they are), then how can MASN even calculate what its profit was for the year to be divided between the two equity stakeholders? I don't have a high degree of confidence in the accuracy of these reports.

http://forum.orioleshangout.com/forums/showthread.php/137008-New-Summary-of-Os-Nats-MASN-TV-Rights/page3?highlight=MASN

Yes, we have discussed the $8M equity stake before - above. (Tony's repping the wrong guy - story of my life).

Regarding the reports, all we know is the cash that changed hands based on annual profits or cash flow or however the $ gets passed through.

MASN is not a fantasy. If it were properly priced, the Os and Nats would each be getting significantly more $.

[El Gordo]

I'm pretty sure the $37 mm figure for rights fees and $8 mm equity stake has been reported a few times, for example, here: http://www.washingtonpost.com/blogs/nationals-journal/wp/2012/11/27/as-the-dodgers-hit-paydirt-the-nationals-masn-talks-remain-in-limbo/ What's unclear to me is, if the rights fees for 2012 and 2013 are in dispute (which I understand they are), then how can MASN even calculate what its profit was for the year to be divided between the two equity stakeholders? I don't have a high degree of confidence in the accuracy of these reports.

Not a financial wizard here, but if the profits are in dispute then wouldn't it make sense not to spend any of it, until the dispute is resolved?