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

[TonySoprano]

The ongoing MASN rights fees negotiations should have something to do with the current answer to your question. Historically, I found this article interesting (couldn't find the thread, but remember one on this subject):

From the same article

Angelos then wiped away the financial pressures with what many consider his best and boldest stroke as Orioles owner.

After years of fighting baseball's expansion to Washington, he leveraged the 2005 arrival of the Nationals into a dominant stake in the cable network that broadcasts both teams' games. The network's deals with local cable carriers provide a never-ending stream of cash that should, theoretically, allow the Orioles to compete with television-rich rivals such as the Yankees and Red Sox.

Executives familiar with the business say the Mid-Atlantic Sports Network was immensely profitable from Day 1 and churns out as much as $45 million a year, despite sub-standard advertising sales. Because of long-term deals that force cable providers to pay $2 a household across a huge geographic region, the network is almost impossible to mess up, cable analysts say, even in lean advertising times.

"He made the deal of a lifetime, and he hasn't gotten the proper credit for it," says Bob Leffler, whose Baltimore-based advertising agency works with MASN and Angelos' law office along with numerous sports teams around the country. "The big things people do as stewards of a franchise are often lost in the winning and losing. But the base of this franchise is solid."

Angelos capitalized on his reputation as an unrelenting negotiator to create MASN, a $600 million property, almost overnight, says an executive who was involved in the negotiations.

This part was most ironic. We didn't spend any money on Teixeira but thanks to MASN we made an offer?

Fans have expressed frustration that the MASN revenue has not led to bigger spending on players, but that's not entirely true, MacPhail says. The Orioles have invested heavily in the draft, made a $140 million offer to first baseman Mark Teixeira (who chose the Yankees instead) and picked up more players than planned in the offseason, he says. MacPhail adds that he, not Angelos, has been reluctant to spend big on free agents when the club's young talent is still congealing.

"All those things that I've thought were most important, he has been willing to spend on," MacPhail says. "We just needed to get the foundation together."

At $81.6 million, the Orioles ranked 17th in the league in payroll in 2010, about $80 million behind the Red Sox and $125 million behind the Yankees. It's a far cry from the late 1990s, when the club briefly held the all-time record for payroll. But MacPhail predicts that MASN will help the Orioles compete with Boston and New York for players when the time is right.

[Brendan25]

From the same article

This part was most ironic. We didn't spend any money on Teixeira but thanks to MASN we made an offer?

Did you ignore my initial response to your first post?

[Oriolidae85]

From the same article

This part was most ironic. We didn't spend any money on Teixeira but thanks to MASN we made an offer?

The O's have tried to bring in pricy FA's recently, but Baltimore's 14 years of losing made the team a less attractive destination. Victor Martinez, Paul Konerko, Edwin Jackson and others (e.g. Saunders last offseason) have received competitive offers from the O's that would have added up to a higher payroll today.

The reasons are self inflicted for not attracting quality FA's/spending more money... at least to some degree. And to your bolded quote in the article? The time is right now, IMO. If the O's are standing pat from now until ST 2014, I'll agree more with your sentiments. What I hope to see over the next 15 months is extensions of current key players and the O's taking a chance on at least one high reward player.

[TonySoprano]

Did you ignore my initial response to your first post?

This is a good post Tony. Very well put out.

My argument to this would be that attendance has been way down, and the team has not been close to competing. Why would the O's up their payroll to 150M when they don't feel like they are close to competing and fans aren't coming to games. It's a very fine line.

And the same line is being drawn this year. I think we can afford a higher payroll. I think we could afford 150M if it made sense. I am not neg-spend money like everyone thinks I am. I was a huge advocate for Prince Fielder. I was a huge advocate for Adam Dunn. I am not pro-spend money just to spend money. I am not pro-have a 150M payroll just because we can afford it. I'd rather go into next year with a 100M payroll and the same team then go in with a much higher payroll with players that may hurt us financially in the future and the benefits on the field aren't worth that hurt. If Prince was available again this year, I'd be preaching for the same 6 year, 150M deal I was preaching for last year. Hamilton just scares me, and I'm not willing to spend just because we can like some are.

Since you asked me to respond, I disagree that we could have a payroll of $150M. My SWAG would be more like $125M and that may be high. I do think they could handle $100M, FWIW (my guess and $4 gets you a cup of java at Starbucks).

We're in agreement on not wasting money. Again, I am not one who has advocated opening up the vault for Hamilton, no matter how many times you choose to bring him up in conversation. Having said that, given the choice, I'd take for him over 300+ lb Fielder.

[hoosiers]

Since you asked me to respond, I disagree that we could have a payroll of $150M. My SWAG would be more like $125M and that may be high. I do think they could handle $100M, FWIW (my guess and $4 gets you a cup of java at Starbucks).

We're in agreement on not wasting money. Again, I am not one who has advocated opening up the vault for Hamilton, no matter how many times you choose to bring him up in conversation. Having said that, given the choice, I'd take for him over 300+ lb Fielder.

Big numbers, but if we are around $90M now, add 1.5M fans to get to 3.6M at $20 incremental pop (probably low based on ticket price, parking, food, concessions) and a doubling of the MASN fee to around $70M, assuming MOST of the incremental $ went into the payroll, we could easily get to $140M+, IMO, BEFORE any incremental from the new national TV deal or other mlb revenue stream improvements.

[TradeAngelos]

Just did a little "number crunching" on the payroll.

I adjusted the opening day salaries for inflation, and here is what it came out to.

.....................................Actual Payroll....Inflation Adjusted

Pre MASN...(1997-2005)..68,107,136........89,674,276

Post MASN.(2006-2012)...77,674,137........83,848,588

So much for allowing us to "close the gap" with Boston and New York, it actually has had the opposite effect....somehow. This also is not "MLB inflation adjusted", which would make the numbers look even worse post MASN.

How many teams see their payroll drop after owning an entity worth half a billion dollars or so, that was highly profitable from day 1?

[hoosiers]

Just did a little "number crunching" on the payroll.

I adjusted the opening day salaries for inflation, and here is what it came out to.

.....................................Actual Payroll....Inflation Adjusted

Pre MASN...(1997-2005)..68,107,136........89,674,276

Post MASN.(2006-2012)...77,674,137........83,848,588

So much for allowing us to "close the gap" with Boston and New York, it actually has had the opposite effect....somehow. This also is not "MLB inflation adjusted", which would make the numbers look even worse post MASN.

How many teams see their payroll drop after owning an entity worth half a billion dollars or so, that was highly profitable from day 1?

Maybe as many teams as see their attendance cut in half. Lost ticket, concession, parking is not inconsequential.

[TradeAngelos]

Maybe as many teams as see their attendance cut in half. Lost ticket, concession, parking is not inconsequential.

Why did attendance drop do you think?

And cut in half is an exaggeration, of course. Par for the course around here.

[TonySoprano]

Why did attendance drop do you think?

And cut in half is an exaggeration, of course. Par for the course around here.

No, it's not an exaggeration.

1997 3,711,132 0.00%

1998 3,684,650 -0.71%

1999 3,433,150 -7.49%

2000 3,297,031 -11.16%

2001 3,094,841 -16.61%

2002 2,682,439 -27.72%

2003 2,454,523 -33.86%

2004 2,744,018 -26.06%

2005 2,624,740 -29.27%

2006 2,153,139 -41.98%

2007 2,164,822 -41.67%

2008 1,950,075 -47.45%

2009 1,907,163 -48.61%

2010 1,733,018 -53.30%

2011 1,746,111 -52.95%

[TradeAngelos]

No, it's not an exaggeration.

1997 3,711,132 0.00%

1998 3,684,650 -0.71%

1999 3,433,150 -7.49%

2000 3,297,031 -11.16%

2001 3,094,841 -16.61%

2002 2,682,439 -27.72%

2003 2,454,523 -33.86%

2004 2,744,018 -26.06%

2005 2,624,740 -29.27%

2006 2,153,139 -41.98%

2007 2,164,822 -41.67%

2008 1,950,075 -47.45%

2009 1,907,163 -48.61%

2010 1,733,018 -53.30%

2011 1,746,111 -52.95%

Was it cut in half in 2001?

How about 2002?

How about 2003?

How about 2004?

How about 2005?

How about 2006?

How about 2007?

How about 2008?

The ONLY way to justify that argument is if you take last few years and compares it to years the stadium had just opened.

Exaggeration.

But keep twisting numbers.

Shouldn't the creation of MASN offset that attendance drop in 2006-2012?? Where did that money go?

Remember the story you quoted??

[TonySoprano]

Was it cut in half in 2001?

How about 2002?

How about 2003?

How about 2004?

How about 2005?

How about 2006?

How about 2007?

How about 2008?

The ONLY way to justify that argument is if you take last few years and compares it to years the stadium had just opened.

Exaggeration.

But keep twisting numbers.

Shouldn't the creation of MASN offset that attendance drop in 2006-2012?? Where did that money go?

Remember the story you quoted??

Oh, gee you got me, in the last three of those years you quoted attendance was only down over 41% or more

[Dark Helmet]

Was it cut in half in 2001?

How about 2002?

How about 2003?

How about 2004?

How about 2005?

How about 2006?

How about 2007?

How about 2008?

The ONLY way to justify that argument is if you take last few years and compares it to years the stadium had just opened.

Exaggeration.

But keep twisting numbers.

Shouldn't the creation of MASN offset that attendance drop in 2006-2012?? Where did that money go?

Remember the story you quoted??

Plus attendence was up in 2012, but it look's as though that won't result in a much greater payroll. Not to mention MASN ratings were higher then ever. I don't expect the team to get back to the glory days of attendence when OPACY opened. It's just cheaper and more comfortable to watch at home. Loss attendence should be offset by MASN ratings.

[TradeAngelos]

Oh, gee you got me, in the last three of those years you quoted attendance was only down over 41% or more

I guess the 7-29% drop from 1998-2005 equals "cut in half" in your world. Cut in half from what you claimed would be more appropriate.

Love to know what math class that was taught at.

Exaggeration, like I said.

Carry on.

[Oriolidae85]

Was it cut in half in 2001?

How about 2002?

How about 2003?

How about 2004?

How about 2005?

How about 2006?

How about 2007?

How about 2008?

The ONLY way to justify that argument is if you take last few years and compares it to years the stadium had just opened.

Exaggeration.

But keep twisting numbers.

Shouldn't the creation of MASN offset that attendance drop in 2006-2012?? Where did that money go?

Remember the story you quoted??

You do realize your picking a fight with a made poster who adds value to these boards right? And Hoosiers was dead on in his cut in half post...in response to yours below:

Just did a little "number crunching" on the payroll.

I adjusted the opening day salaries for inflation, and here is what it came out to.

.....................................Actual Payroll....Inflation Adjusted

Pre MASN...(1997-2005)..68,107,136........89,674,276

Post MASN.(2006-2012)...77,674,137........83,848,588

So much for allowing us to "close the gap" with Boston and New York, it actually has had the opposite effect....somehow. This also is not "MLB inflation adjusted", which would make the numbers look even worse post MASN.

How many teams see their payroll drop after owning an entity worth half a billion dollars or so, that was highly profitable from day 1?

So your inflation numbers used 1997 to 2012....attendance dropped by more than 50% during this time. Its easy to understand how frustrating this subject can be as an O's fan, so I'll just leave it at that for now and hope to see the O's add value this offsesaon.

[TonySoprano]

I guess the 7-29% drop from 1998-2005 equals "cut in half" in your world. Cut in half from what you claimed would be more appropriate.

Love to know what math class that was taught at.

Exaggeration, like I said.

Carry on.

Attendance was down over 40% by the time MASN started.

It's a shame you skipped reading comprehension class. Nowhere in the following did he say attendance was cut in half for all of the past fifteen years. We get it; you ran off your mouth without knowing the numbers and now you're only digging the hole deeper. *yawn*

Maybe as many teams as see their attendance cut in half. Lost ticket, concession, parking is not inconsequential.