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

[weams]

Good lawyers look for a win-win, IMO. On a macro level here, MLB got its team in DC, the Orioles got a share of TV revenue that the Nats are generating and don't have to compete with the Nats for the TV market. In broad terms, I'd call that win-win. I think you look at the first five years as a "buy in," just like a junior partner in a law firm doesn't make what the more senior partners make. Now they should be on a more level playing field, which is what the RSDC has done. It will always be skewed a bit in the Orioles' favor, but both teams benefit if the market grows.

I believe the Expos curse is intended to always haunt the Nationals. I believe the discovery and the loan will assure that.

[Ohfan67]

Dumb question that I've never figured out: Is the Orioles organization the primary owner of MASN or is Peter Angelos the primary owner? When MASN generates profits do those profits go to Orioles organization or Angelos?

[Ohfan67]

Dumb question that I've never figured out: Is the Orioles organization the primary owner of MASN or is Peter Angelos the primary owner? When MASN generates profits do those profits go to Orioles organization or Angelos?

I'm asking be ause there's been an unspoken assumption that a more profitable MASN would benefit Orioles. If Angelos is principal owner then only the rights fees really matter in terms of Orioles' payroll.

[weams]

I'm asking be ause there's been an unspoken assumption that a more profitable MASN would benefit Orioles. If Angelos is principal owner then only the rights fees really matter in terms of Orioles' payroll.

All of the Orioles partners are owners of MASN. The only difference that occurs with higher rights fees is that the Orioles then have to pay in to the competitive balance tax pool. MLB gets more money themselves.

[weams]

I'm asking be ause there's been an unspoken assumption that a more profitable MASN would benefit Orioles. If Angelos is principal owner then only the rights fees really matter in terms of Orioles' payroll.

It's not unspoken. The Orioles owners own MASN and more profit means then Orioles are not the only source of revenue to these owners.

[TonySoprano]

I believe the Expos curse is intended to always haunt the Nationals. I believe the discovery and the loan will assure that.

Good thing there is not a Browns curse as Baltimore has two teams that used to have that nickname.

All this talk about territories, it's like the mafia. How did Washington supposedly get added to Baltimore when Angelos bought the team? Why wasn't Baltimore's "territory" the same as it was when the Senators were in town? You know, as in the team that allowed the Browns to move to Baltimore in 1954. Angelos and pals bought the team for $170M, so how much of that was for Baltimore's newly "expanded" territory into Washington? It had to be chump change relatively speaking. That's where the real offense began, when Washington was a throw-in to the Orioles deal and not the Expos move to D.C.

Peter, pick a number for the Lerners and for that you get the Orioles original "territory" or else have the rest taken from you by MLB. There is no honor amongst thieves.

[Frobby]

Dumb question that I've never figured out: Is the Orioles organization the primary owner of MASN or is Peter Angelos the primary owner? When MASN generates profits do those profits go to Orioles organization or Angelos?

I've seen it discussed both ways many times. At one point I found an FCC filing that seemed to make it clear that the Orioles' owners owned the majority interest in MASN. Then some other poster found a Maryland business license that seemed to make it clear that the Orioles directly own the majority interest in MASN. At this point, I'm still not 100% sure one way or the other.

[Frobby]

And, at the end of the day, I don't think it matters at all. Both entities are controlled by same people who can choose how to allocate funds. I understand the point about revenue sharing and agree that it makes a difference, but the money either will or won't make it into the Orioles' payroll and other expenses. I've got to say that Hoosiers is on point when he wonders where some of the MASN "profit" has gone. Even if I don't think the amount being pocketed is as large as he does, it is certainly not negligible at all. It does frustrate me.

I think it matters a bit, in that if it's the Orioles who own an 85% share of MASN, there is no way of getting the profits to Peter Angelos and the other Orioles' owners without the money passing through the Orioles first. If it's the owners of the team who also own 85% of MASN, then MASN can pay profits directly to the owners.

Here's what I do know: there is a limited partnership called Baltimore Orioles, L.P. (call it "BOLP"). That's the entity in which Angelos is the majority owner. There is also a corporation called Baltimore Orioles, Inc. (call it "BOI"). The relationship between BOLP and BOI is a bit unclear to me. I'm not sure if BOI is owned by BOLP, or if BOI is a corporate general partner of BOLP that operates BOLP. In any event, it's BOLP which is the majority owner of MASN. So, one of two structures is possible:

1. BOLP is majority owner of MASN, and also directly operates the Orioles.

2. BOLP is majority owner of MASN, and also owns BOI, which operates the Orioles.

In scenario 1, the profits of MASN have to be passed through the Orioles' operating entity to get to the owners. In scenario 2, the profits of MASN bypass the Orioles' operating entity and can flow up to the owners.

I've read many court filings in which these entities are named as parties, and BOLP and BOI always do their best to obscure what the structure is.

[weams]

Good thing there is not a Browns curse as Baltimore has two teams that used to have that nickname.

All this talk about territories, it's like the mafia. How did Washington supposedly get added to Baltimore when Angelos bought the team? Why wasn't Baltimore's "territory" the same as it was when the Senators were in town? You know, as in the team that allowed the Browns to move to Baltimore in 1954. Angelos and pals bought the team for $170M, so how much of that was for Baltimore's newly "expanded" territory into Washington? It had to be chump change relatively speaking. That's where the real offense began, when Washington was a throw-in to the Orioles deal and not the Expos move to D.C.

Peter, pick a number for the Lerners and for that you get the Orioles original "territory" or else have the rest taken from you by MLB. There is no honor amongst thieves.

Good post. It's very true I think.

[weams]

I think it matters a bit, in that if it's the Orioles who own an 85% share of MASN, there is no way of getting the profits to Peter Angelos and the other Orioles' owners without the money passing through the Orioles first. If it's the owners of the team who also own 85% of MASN, then MASN can pay profits directly to the owners.

Here's what I do know: there is a limited partnership called Baltimore Orioles, L.P. (call it "BOLP"). That's the entity in which Angelos is the majority owner. There is also a corporation called Baltimore Orioles, Inc. (call it "BOI"). The relationship between BOLP and BOI is a bit unclear to me. I'm not sure if BOI is owned by BOLP, or if BOI is a corporate general partner of BOLP that operates BOLP. In any event, it's BOLP which is the majority owner of MASN. So, one of two structures is possible:

1. BOLP is majority owner of MASN, and also directly operates the Orioles.

2. BOLP is majority owner of MASN, and also owns BOI, which operates the Orioles.

In scenario 1, the profits of MASN have to be passed through the Orioles' operating entity to get to the owners. In scenario 2, the profits of MASN bypass the Orioles' operating entity and can flow up to the owners.

I've read many court filings in which these entities are named as parties, and BOLP and BOI always do their best to obscure what the structure is.

Thank you. That helps me understand.

[Frobby]

I think I've answered the question. There is a court case in California in which both BOI and BOLP are defendants. Here's what they said:

The Baltimore Orioles, Inc. is a corporation formed pursuant to the laws of the State of Maryland. The Baltimore Orioles, Inc. is the general partner of the Baltimore Orioles Limited Partnership.

There is no corporate parent or publicly held corporation that owns 10% or more of the stock of the Baltimore Orioles, Inc.

The Baltimore Orioles Limited Partnership is a limited partnership formed pursuant to the laws of the State of Maryland. There is no corporate parent or publicly held corporation that holds 10% or more of the

ownership of the Baltimore Orioles Limited Partnership.

So that means my scenario 1 appears to be the correct one. BOLP is the majority owner of MASN, and it also appears to the the entity through which the Orioles are operated.

For those who don't know: a "limited partnership" is a form of legal entity that has "limited partners" and at least one "general partner." The limited partners have no liability beyond their investment in the partnership, so they are not responsible if the partnership, for example, owes debts that are beyond its assets. They are passive investors. The general partner ("GP") has liability beyond his/her/its investment, and is responsible to run the partnership. The GP is often a corporation, to shield the assets of the individual(s) who own it from personal liability. So, Angelos owns BOI. BOI is the GP of BOLP and runs it. BOLP is the majority owner of MASN, and appears to be the operating entity for the Orioles, as well.

Got it? Nothing is simple in this life!

[LoyalBirdFan]

I think I've answered the question. There is a court case in California in which both BOI and BOLP are defendants. Here's what they said:

So that means my scenario 1 appears to be the correct one. BOLP is the majority owner of MASN, and it also appears to the the entity through which the Orioles are operated.

For those who don't know: a "limited partnership" is a form of legal entity that has "limited partners" and at least one "general partner." The limited partners have no liability beyond their investment in the partnership, so they are not responsible if the partnership, for example, owes debts that are beyond its assets. They are passive investors. The general partner ("GP") has liability beyond his/her/its investment, and is responsible to run the partnership. The GP is often a corporation, to shield the assets of the individual(s) who own it from personal liability. So, Angelos owns BOI. BOI is the GP of BOLP and runs it. BOLP is the majority owner of MASN, and appears to be the operating entity for the Orioles, as well.

Got it? Nothing is simple in this life!

The whole thing spells trouble. From what I understand, there is also a clause that Peter (MASN) agree'd to (Peter Orioles wanted it) that states the Orioles will always get the same amount the Nats get.

We all know, if the Nats get 300 million (going back to 2012), the Orioles won't get 300 million.

I haven't kept up with it, makes my head hurt.

[BradyBunch]

I guess we need to understand what the Bortz formula does ..... but the implication above is about a negotiation to establish FMV - not a default formula. Now perhaps this Bortz formula establishes FMV based on various inputs from current information, but the contract clearly calls for a negotiation and not the implementation of a formula.

IMO, the Orioles interpretation of the implied use of a formula when the contract specifically calls for a negotiation strains credibility.

LOL! Bortz Formula is taking into account... network revenues, expenses, ratings and other considerations. Rating is something the Nats don't have. They carry Household Rating of 2.16 out of 56k homes and they rank 5th during primetime in the area. On the other hand the Orioles have a HHR of 6.03/66k and rank 1st during prime time.

IMO the Nats are barking up the wrong tree.. they don't have the ratings to justify their requests or even MLB's forced opinion. Even in 2012 when this started.. a 2.4/56k rating is pretty horrible. Nationals and DC media were so excited that year then they broke 40,000 viewers for games.

[Can_of_corn]

LOL! Bortz Formula is taking into account... network revenues, expenses, ratings and other considerations. Rating is something the Nats don't have. They carry Household Rating of 2.16 out of 56k homes and they rank 5th during primetime in the area. On the other hand the Orioles have a HHR of 6.03/66k and rank 1st during prime time.

IMO the Nats are barking up the wrong tree.. they don't have the ratings to justify their requests or even MLB's forced opinion. Even in 2012 when this started.. a 2.4/56k rating is pretty horrible. Nationals and DC media were so excited that year then they broke 40,000 viewers for games.

Any idea what the household #'s are for each teams' sphere of influence? Do those spheres overlap at any point?

[weams]

Any idea what the household #'s are for each teams' sphere of influence? Do those spheres overlap at any point?

I would assume not. Since they are analyzing viewership during each team's primary broadcast. Not reruns.