Schmuck Gives a Dose of Financial Reality

[Frobby]

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).

Or, you could go back to this thread from December 2012. http://forum.orioleshangout.com/forums/showthread.php/128960-MLB-seeks-creative-solution-to-MASN-rights-fees-dispute-between-Nationals-Orioles These numbers have been out there for some time.

I'm skeptical that the new article is anything more than a regurgitation of what the Post reported more than a year ago. I doubt the reporters actually know whether the $8 mm "equity stake" payment actually was paid.

[TonySoprano]

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.

While the rights are in dispute, how were they able to increase them in 2013? I have to assume that while this remains in arbitration the current situation remains in force and the books are closed for 2012 and 2013, as they would need to be for tax purposes. Further assumption that whatever agreement there is, sometime later in the century at this rate, it wouldn't be retroactive.

[Frobby]

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?

That would seem logical to me.

[weams]

While the rights are in dispute, how were they able to increase them in 2013? I have to assume that while this remains in arbitration the current situation remains in force and the books are closed for 2012 and 2013, as they would need to be for tax purposes. Further assumption that whatever agreement there is, sometime later in the century at this rate, it wouldn't be retroactive.

That would seem logical to me.

The Orioles offered the increase based on their interpretation of the legal verbiage. Not the Nationals rights value. MLB accepted that for 2014. I agree. It probably should have stayed where it was.

[El Gordo]

That would seem logical to me.

Wouldn't this be all the excuse PA needs not to invest any MASN money in the team?

[oriole]

Who do you want? Of the top free agents that have signed so far, who should the O's have gotten? I'm not saying they shouldn't spend money. But they need to do it wisely.

There were tons of options this year that the O's passed on that even within current financial restraints would have made sense. Hudson, Morrison, Fister, Crain, Hart...this could have been an awesome off-season but the FO fell asleep at the wheel waiting for super bargains.

[Frobby]

While the rights are in dispute, how were they able to increase them in 2013? I have to assume that while this remains in arbitration the current situation remains in force and the books are closed for 2012 and 2013, as they would need to be for tax purposes. Further assumption that whatever agreement there is, sometime later in the century at this rate, it wouldn't be retroactive.

Maybe the payments that have been made are consistent with the Orioles' position in the arbitration -- we know the payments determined in the arbitration can't be lower than what the Orioles proposed, so they may as well pay out the amount the Orioles proposed, with the arbitrators to decide what additional distributions are required. But that is just a guess on my part. Who knows? Maybe the contract says what they are supposed to do while a dispute is pending. Or, maybe not. It's all a mystery, and the Orioles certainly haven't made any effort to clear it all up.

[Frobby]

Wouldn't this be all the excuse PA needs not to invest any MASN money in the team?

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

[TonySoprano]

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

"Didn't happen" is probably the correct term.

[weams]

Wouldn't this be all the excuse PA needs not to invest any MASN money in the team?

Reason. All the reason. If it is in fact the stifling issue that it may be.

[weams]

"Didn't happen" is probably the correct term.

Very true here as well.

[weams]

Maybe the payments that have been made are consistent with the Orioles' position in the arbitration -- we know the payments determined in the arbitration can't be lower than what the Orioles proposed, so they may as well pay out the amount the Orioles proposed, with the arbitrators to decide what additional distributions are required. But that is just a guess on my part. Who knows? Maybe the contract says what they are supposed to do while a dispute is pending. Or, maybe not. It's all a mystery, and the Orioles certainly haven't made any effort to clear it all up.

Is it not possible that the only real remedy for the MLB is to have MASN sold and to divide the spoils at current percentages. With a Orioles rights fee for Nationals broadcasts in perpetuity?

[Redskins Rick]

Is it not possible that the only real remedy for the MLB is to have MASN sold and to divide the spoils at current percentages. With a Orioles rights fee for Nationals broadcasts in perpetuity?

Why can't Fox sports come in and acquire MASN and provide a separate deal to each team and cover each team separately?

[weams]

Why can't Fox sports come in and acquire MASN and provide a separate deal to each team and cover each team separately?

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.

[Frobby]

Is it not possible that the only real remedy for the MLB is to have MASN sold and to divide the spoils at current percentages. With a Orioles rights fee for Nationals broadcasts in perpetuity?

I don't know that MLB can force that to happen, but economic reality tells me that if (as I suspect is the case) FOX can pay more in combined rights fees for the O's and Nats than MASN can earn in net income (before paying rights fees to the O's and Nats), then it is insanity to keep MASN intact, and there clearly must be a way of dividing the pie that leaves both the Orioles and the Nats in a better position after selling MASN than they are in now.