HHP: MASN/Nats/Orioles case (Inside the Courtroom)

[Dipper9]

Doesn't the contract read something like "after X amount of time the Nats' fee amount will be reset to a rate set by prevailing market conditions"? And didn't an independent arbitration panel the O's and Nats agreed to then set that rate? And now that they got what they see as an unfavorable result MASN/Orioles/Angelos are saying that it's all screwed up and they're not abiding by the process they agreed to?

No, I believe you have it backwards. The Nats get $40 million a year plus currently 15% market share, that goes up 1% each year up to a max of 33%. That's what the Nats agreed to, and its why Angelos signed off on the Nats going to DC. Its the Nats who are now trying to get more out of the agreed upon deal.

And like others have said, screw the Expos! Had it not been a beneficial deal for the Orioles, the Expos would be playing somewhere else right now.

[gmelson26]

I have a suspicion that this issue is going to affect the 2016 All-Star Game. If I'm Selig, I'd use it as some additional leverage, whatever its worth.

[MurphDogg]

Doesn't the contract read something like "after X amount of time the Nats' fee amount will be reset to a rate set by prevailing market conditions"? And didn't an independent arbitration panel the O's and Nats agreed to then set that rate? And now that they got what they see as an unfavorable result MASN/Orioles/Angelos are saying that it's all screwed up and they're not abiding by the process they agreed to?

There is no prevailing market rate when one entity pays itself for broadcasting rights.

[Mayor McCheese]

Doesn't the contract read something like "after X amount of time the Nats' fee amount will be reset to a rate set by prevailing market conditions"? And didn't an independent arbitration panel the O's and Nats agreed to then set that rate? And now that they got what they see as an unfavorable result MASN/Orioles/Angelos are saying that it's all screwed up and they're not abiding by the process they agreed to?

I may have misremembered the facts...

Screw the nats. That is all.

[DrungoHazewood]

No, I believe you have it backwards. The Nats get $40 million a year plus currently 15% market share, that goes up 1% each year up to a max of 33%. That's what the Nats agreed to, and its why Angelos signed off on the Nats going to DC. Its the Nats who are now trying to get more out of the agreed upon deal.

No, I'm pretty sure the agreement had a reset of the fees in there, and the O's and Nats and MLB ended up with arbitration to decide what that fee will be. I don't know all the details, but I'm sure others will chime in.

And like others have said, screw the Expos! Had it not been a beneficial deal for the Orioles, the Expos would be playing somewhere else right now.

The monopoly giveth, the monopoly taketh away. The O's only had territorial rights to the entire DC metro area because MLB decided that was a good idea, and had previously allowed teams to leave DC. And, for that matter, allowed the Browns to encroach on the Senators' territory in '54. Then MLB decided it was a good idea to move a team without political leverage to a very rich city where they could get a free $600M stadium.

These are all just internal MLB machinations, the league is doing what it sees as best for the overall bottom line. It's not like it's a natural thing for a sports team in Baltimore to claim DC like they're some kind of conquistadors.

[DrungoHazewood]

There is no prevailing market rate when one entity pays itself for broadcasting rights.

I won't argue with that, but I'm pretty sure the agreement had words to that effect.

[gmelson26]

No, I believe you have it backwards. The Nats get $40 million a year plus currently 15% market share, that goes up 1% each year up to a max of 33%. That's what the Nats agreed to, and its why Angelos signed off on the Nats going to DC. Its the Nats who are now trying to get more out of the agreed upon deal.

And like others have said, screw the Expos! Had it not been a beneficial deal for the Orioles, the Expos would be playing somewhere else right now.

This is my understanding of the deal as well. It worries me that while the deal clearly and rightfully benefited us, that baseball will eventually railroad it as we get further away from the original conditions that dictated the deal. Obviously, the Orioles are in the right, but it doesn't always work out that way. If the dust settles (even if it's, say, 10-15 years from now) and the Nationals eventually come out on top, we're in a relatively screwed position. We lose a ton of broadcast territory- if not non-defined geographical territory- with the original intent of having a broadcast contract in place to protect this massive loss and then short memories wipes it out.

Frankly, why place a team so close to a team that already has to try and keep up with the Joneses' (MFY and Red Sux). Seems unfair.. as I type this last part, it occurs to me that keeping a MFY and Sux competitor down was probably part of the calculation.

[Dipper9]

No, I'm pretty sure the agreement had a reset of the fees in there, and the O's and Nats and MLB ended up with arbitration to decide what that fee will be. I don't know all the details, but I'm sure others will chime in.

The monopoly giveth, the monopoly taketh away. The O's only had territorial rights to the entire DC metro area because MLB decided that was a good idea, and had previously allowed teams to leave DC. And, for that matter, allowed the Browns to encroach on the Senators' territory in '54. Then MLB decided it was a good idea to move a team without political leverage to a very rich city where they could get a free $600M stadium.

These are all just internal MLB machinations, the league is doing what it sees as best for the overall bottom line. It's not like it's a natural thing for a sports team in Baltimore to claim DC like they're some kind of conquistadors.

Pretty sure DC is one of the reasons we have NO chance at an NBA or NHL team. So why can they claim Baltimore but we can't claim DC?

[gmelson26]

No, I'm pretty sure the agreement had a reset of the fees in there, and the O's and Nats and MLB ended up with arbitration to decide what that fee will be. I don't know all the details, but I'm sure others will chime in.

This is the understanding I've been thinking off of..

According to the Baltimore Sun: “The Nationals and Orioles each received $29 million for their TV rights in 2011, but that number increased to $34 million in 2012 and is expected to reach about $46 million over the first five-year reset period. The teams share the profits from MASN, but the Nationals currently hold only a 14 percent stake in the network. That will increase by 1 percent per year until the Nationals’ equity share reaches 33 percent.”

So, the teams get the same dollar amount from the deal directly, but the O’s get more profits because they own a bigger share of the network. So the question now is, how much money does MASN clear every year.

[DrungoHazewood]

This is my understanding of the deal as well. It worries me that while the deal clearly and rightfully benefited us, that baseball will eventually railroad it as we get further away from the original conditions that dictated the deal. Obviously, the Orioles are in the right, but it doesn't always work out that way. If the dust settles (even if it's, say, 10-15 years from now) and the Nationals eventually come out on top, we're in a relatively screwed position. We lose a ton of broadcast territory- if not non-defined geographical territory- with the original intent of having a broadcast contract in place to protect this massive loss and then short memories wipes it out.

Frankly, why place a team so close to a team that already has to try and keep up with the Joneses' (MFY and Red Sux). Seems unfair.. as I type this last part, it occurs to me that keeping a MFY and Sux competitor down was probably part of the calculation.

From the Nats' court filing Frobby linked to yesterday:

...The deal did, however, provide a critical protection to the Nationals. The express terms of the Telecast Agreement unambiguously require that MASN must pay the Nationals ?fair market value? for the Nationals? telecast rights beginning in 2012.

3. But when the time came to negotiate a ?fair market value? of the Nationals?

telecast rights in 2012, MASN and the Nationals were unable to agree through negotiation or mediation on the ?fair market value? of the Nationals? telecast rights. Thus, pursuant to the express and unambiguous terms of the Telecast Agreement, the parties submitted their dispute to arbitration before the RSDC, a committee of Major League Baseball...

Part of the agreement between the Nats, Orioles, and MLB was a reset of the telecast rights fees paid to the Nats in 2012 to whatever "fair market value" is. The Nats and O's couldn't agree on that number, so the process outlined in the agreement was to go to arbitration. That's what happened. The O's/MASN didn't like the outcome, so that's where we are, with the O's/MASN challenging the process they signed up for.

[DrungoHazewood]

Pretty sure DC is one of the reasons we have NO chance at an NBA or NHL team. So why can they claim Baltimore but we can't claim DC?

I have no idea how territorial rights work in other sports. And I think that if Baltimore can support an NBA or NHL team they should have one. Every city and town should have the opportunity to have whatever sports teams they can support.

[pccp82]

Baltimore, Your hubris is showing.

I think what it boils down to or not, is the arbitrators think that there will be more nats fans than orioles fans going forward in the dc market.

29 million seems too low, and 100 million seems too high.

im curious what the orioles broadcast numbers actually are in places that aren't in Balt metro.

[waroriole]

I have a suspicion that this issue is going to affect the 2016 All-Star Game. If I'm Selig, I'd use it as some additional leverage, whatever its worth.

This is a lot bigger than an All Star Game.

[Redskins Rick]

I have no idea how territorial rights work in other sports. And I think that if Baltimore can support an NBA or NHL team they should have one. Every city and town should have the opportunity to have whatever sports teams they can support.

Baltimore couldn't support the Bullets, which is why they ended up in DC and then Landover and then back in DC.

As for the NHL, like you said, if the town would have been able to support them, they would have already been there.

[MurphDogg]

Part of the agreement between the Nats, Orioles, and MLB was a reset of the telecast rights fees paid to the Nats in 2012 to whatever "fair market value" is. The Nats and O's couldn't agree on that number, so the process outlined in the agreement was to go to arbitration. That's what happened. The O's/MASN didn't like the outcome, so that's where we are, with the O's/MASN challenging the process they signed up for.

Part of the reason that the Orioles are challenging the process is because prior to the arbitration hearing, The Nats went to MLB to complain that they weren't getting enough money and MLB gave them an additional $30 million to tide them over until the arbitration decision was reached. Shockingly MLB's arbitration panel sided with the team that they had just given a lump sum of money to. Hence the Orioles complaint that the arbitration panel's finding was invalid because MLB had a fiduciary interest in the Nationals receiving more money. Setting aside the $30 million, MLB has a fiduciary interest in claiming that local television rights values are higher than they actually are because it increases franchise values, so they cannot be truly impartial.