Nationals Ask Court to Modify Injunction in MASN Dispute

[weams]

And no matter which way the MASN case turns out, the Orioles are earning large income from MASN. They'll make less if the Nats earn more in rights fees, but remember that the O's get the same rights fees as the Nats.

No Angelos family member has ever spoken to me about any of these issues.

The Orioles would receive the larger rights fees.

Until MASN is bankrupted, then the Orioles will receive nothing. And the Nationals will be free to market themselves in the Orioles former market. This is the goal.

[weams]

But that money is subject to revenue sharing so effectively the O's get hit twice.

And the fact that the ongoing marketing of the Orioles is of a much smaller and less affluent nature is to be ignored as well I assume. This is a long con here.

[Redskins Rick]

No Angelos family member has ever spoken to me about any of these issues.

The Orioles would receive the larger rights fees.

Until MASN is bankrupted, then the Orioles will receive nothing. And the Nationals will be free to market themselves in the Orioles former market. This is the goal.

I believe this is an opinion you have and feel strongly about. Not sure, what evidence there is, in the media to support this.

MASN issue is as ugly as any high profile divorce case. Both sides want things their way.

[Redskins Rick]

And the fact that the ongoing marketing of the Orioles is of a much smaller and less affluent nature is to be ignored as well I assume. This is a long con here.

Weams, get a grip. Seriously?

While DC has affluent families, as does Baltimore.

DC has too many people below the poverty line, and is #4 on top ten list for people being hungry and of which, Baltimore isn't on that list.

[Can_of_corn]

I believe this is an opinion you have and feel strongly about. Not sure, what evidence there is, in the media to support this.

MASN issue is as ugly as any high profile divorce case. Both sides want things their way.

They want to set the profit rate at 5% right?

It isn't going to take much of a change in the market (folks leaving cable, carriers dropping MASN, advertising rates dropping) to turn 5% into a loss. The Astos thought they were getting a great deal until their partner declared bankruptcy.

[weams]

Weams, get a grip. Seriously?

While DC has affluent families, as does Baltimore.

DC has too many people below the poverty line, and is #4 on top ten list for people being hungry and of which, Baltimore isn't on that list.

You are right. I am still fighting the civil war here.

[Redskins Rick]

They want to set the profit rate at 5% right?

It isn't going to take much of a change in the market (folks leaving cable, carriers dropping MASN, advertising rates dropping) to turn 5% into a loss. The Astos thought they were getting a great deal until their partner declared bankruptcy.

So, the Nationals are making decisions, with their intent to bankrupt MASN and giving them carte blache to do their own deal?

[Frobby]

No Angelos family member has ever spoken to me about any of these issues.

The Orioles would receive the larger rights fees.

Until MASN is bankrupted, then the Orioles will receive nothing. And the Nationals will be free to market themselves in the Orioles former market. This is the goal.

Except that there is nothing about the RSDC ruling that would cause MASN to go bankrupt. According to what the Panel calculated for the next five years:

2013: O's get $38 mm in rights fees after revenue sharing ($56 mm gross) and $17 mm profit from MASN = $55 mm

2014: O's get $40 mm in rights fees after revenue sharing ($59 mm gross) and $18 mm profit from MASN = $58 mm

2015: O's get $42 mm in rights fees after revenue sharing ($63 mm gross) and $20 mm profit from MASN = $62 mm

2016: O's get $45 mm in rights fees after revenue sharing ($67 mm gross) and $24 mm profit from MASN = $69 mm

2017: O's get $48 mm in rights fees after revenue sharing ($72 mm gross) and $25 mm profit from MASN = $73 mm

Note the Orioles' revenue from their share of the profits of MASN are increasing each year even though the Orioles' percentage ownership of MASN decreases by 1% per year. So obviously, MASN will still be profitable even after paying the higher rights fees awarded by the RSDC.

The point is this: the RSDC decision makes the Orioles' revenue from MASN (rights fees plus profit share) less than it was in the previous five year period, and less than the Orioles wanted. It is still a very profitable operation for the Orioles, who (at least by Forbes' analysis) have been turning a profit off their other baseball operations even before you consider their share of the MASN profits.

[Can_of_corn]

So, the Nationals are making decisions, with their intent to bankrupt MASN and giving them carte blache to do their own deal?

That might be the long game. Would be pretty ruthless of them but wouldn't they be better off?

[Frobby]

They want to set the profit rate at 5% right?

It isn't going to take much of a change in the market (folks leaving cable, carriers dropping MASN, advertising rates dropping) to turn 5% into a loss. The Astos thought they were getting a great deal until their partner declared bankruptcy.

The revenue assumptions used by the RSDC were very conservative. They basically used the assumptions given to them by MASN, which of course, are designed to make the number as low as possible.

[Redskins Rick]

That might be the long game. Would be pretty ruthless of them but wouldn't they be better off?

At the risk of pissing off the customers that enjoy watching both MASN channels now?

Not to mention the rest of their customers, which will see an increase in their cable bill to cover the new agreement.

[hoosiers]

But that money is subject to revenue sharing so effectively the O's get hit twice.

No, it doesn't mean anything like that, now, does it?

The Os pay the same local TV rights fees as any other team (and collect the higher shared fees as other teams local TV rights fees increase). Any perception of this "getting hit twice" fallacy is because the Os have kept their local TV rights fees artificially low and have paid lower revenue sharing fees as a result - while earning massive profits through ownership of MASN.

[Can_of_corn]

The revenue assumptions used by the RSDC were very conservative. They basically used the assumptions given to them by MASN, which of course, are designed to make the number as low as possible.

Would you say that the fees paid to local sport franchises for TV right are a bubble? Or do you expect such fees to maintain or even increase going forward?

[Frobby]

Would you say that the fees paid to local sport franchises for TV right are a bubble? Or do you expect such fees to maintain or even increase going forward?

I think there are some networks that have gone overboard. But I think the RSDC's assumptions were pretty realistic and not based on the top of the market deals that the Nats wanted to use as comps. I'm far from an expert in TV economics, so I couldn't say where the market is likely to go from here.

[Frobby]

I think there are some networks that have gone overboard. But I think the RSDC's assumptions were pretty realistic and not based on the top of the market deals that the Nats wanted to use as comps. I'm far from an expert in TV economics, so I couldn't say where the market is likely to go from here.

There was an outstanding article about the state of the cable market for sports programming in fangraphs this week, which I highly recommend: http://www.fangraphs.com/blogs/diamondbacks-billion-dollar-tv-deal-and-the-bubble-that-refuses-to-pop/

The departure point of the article is that the Diamondbacks reportedly have signed a billion dollar deal that will triple their rights fees from the current $31 mm/yr. At the same time, the networks that bought the rights to the Astros and Dodgers are really struggling to yield value from those deals, though perhaps for one-off reasons. I won't try to summarize all the points in the article, but the gist is that the bubble hasn't burst yet though there are signs that it could burst in the not distant future.