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

[Chavez Ravine]

Thanks, that's interesting. It's amazing that MLB has allowed this to drag on for more than a year.

This has gone on so long because MLb can’t figure out a way to get out of the sweet deal they gave Angelos in order to solve the Expos problem. I think that the “talks” with NBC, Fox etc. are just wishful delusions on their part

[TonySoprano]

I can't post a link from my iPhone, but pressboxonline.com reported on June 4 that MASN was granted TV rights for the Nats for 30 years, like I said. The article explains that MASN's cable fees are the lowest of all RSN's and MLB wants some other RSN to purchase a stake and infuse some cash that can be used to pay higher rights fees. This is very consistent with what I've said all along -- the problem here is that the Nats want market rates for their rights fees, but MASN is weaker than most RSN's and can't afford to pay market rates.

After too much time digging, I found the article. Since 2005, I've read many articles on MASN and this is the first one that mentioned the 30 year deal. I'm curious about his source for this, but can find nothing elsewhere to confirm or contradict it.

You mention Angelos not being stupid, and I agree.... as it pertains to matters not baseball related. (He's made numerous stupid decisions in his position as majority owner, but I digress) But why would a smart business man walk away from a seemingly win-win deal to sell MASN? Maybe he's just trying to hold out for a better deal, but in the mean time he's screwing two franchises out of a windfall of money, and that doesn't sound like the shrewd thing to do. How did we get here?

How did Angelos get such leverage? Come on, this is baseball. Use your imagination. What baseball really feared was that, in a complex lawsuit about TV territorial rights, Angelos would use the "discovery" stage of the proceedings to expose the sport's dirty laundry on who knows how many touchy subjects.

"Oh, no question. That's the correct interpretation," said one source close to the negotiations. "The collateral damage that Peter might have done to the sport in court just wasn't a risk worth taking."

source - Tom Boswell, April 1, 2005

[Frobby]

After too much time digging, I found the article. Since 2005, I've read many articles on MASN and this is the first one that mentioned the 30 year deal. I'm curious about his source for this, but can find nothing elsewhere to confirm or contradict it.

You mention Angelos not being stupid, and I agree.... as it pertains to matters not baseball related. (He's made numerous stupid decisions in his position as majority owner, but I digress) But why would a smart business man walk away from a seemingly win-win deal to sell MASN? Maybe he's just trying to hold out for a better deal, but in the mean time he's screwing two franchises out of a windfall of money, and that doesn't sound like the shrewd thing to do.

Thanks for posting the link to the article I cited. I made my post about the 30-year deal on TV rights before I found that article, so obviously I've read it before somewhere, but don't ask me where.

I have many educated guesses about why this dispute has taken so long to resolve, why other RSN's are being contacted, and why Angelos hasn't agreed to a deal to sell MASN, but they're still just guesses. To really know, you'd need to see the MASN contracts, and that ain't happening.

Best guess: the contract is favorable to Angelos/Orioles, and the reset provision doesn't require payment of full market rates though it isn't crystal clear on that point, plus we know MASN must pay equal rights fees to both teams but the markets aren't equal. A nationally based RSN would generate much higher revenues and could afford to pay much higher rights fees to the two organizations, but wouldn't want to buy in with the ambiguities in the current reset provision, so it's a very complicated negotiation involving the total price paid for MASN, how much of the price goes to each team (or it's owners) considering the "sliding scale" percentage of ownership, and how much in rights fees each team gets. Plus I'm sure there are "real" tax issues and revenue sharing issues that are impacted by getting higher rights fees versus parking the profits inside of MASN. So, it's not simple, and neither Angelos nor Ted Lerner is a shrinking violet.

[TonySoprano]

This is very consistent with what I've said all along -- the problem here is that the Nats want market rates for their rights fees, but MASN is weaker than most RSN's and can't afford to pay market rates.

Best guess: the contract is favorable to Angelos/Orioles, and the reset provision doesn't require payment of full market rates though it isn't crystal clear on that point, plus we know MASN must pay equal rights fees to both teams but the markets aren't equal. A nationally based RSN would generate much higher revenues and could afford to pay much higher rights fees to the two organizations, but wouldn't want to buy in with the ambiguities in the current reset provision, so it's a very complicated negotiation involving the total price paid for MASN, how much of the price goes to each team (or it's owners) considering the "sliding scale" percentage of ownership, and how much in rights fees each team gets. Plus I'm sure there are "real" tax issues and revenue sharing issues that are impacted by getting higher rights fees versus parking the profits inside of MASN. So, it's not simple, and neither Angelos nor Ted Lerner is a shrinking violet.

Ted Lerner doesn't seem to be at all concerned with the "real tax issues of higher rights fees," nor is he certain that MASN can't afford to pay closer to market rates. As to the purchase price, Lerner wouldn't be entitled to a higher percentage of the sale of the company than what he currently owns, and I presume he wouldn't have a problem with that because of the magnitude of the deal particularly versus staying joined at the hip with Pete Angelos. What magnitude are we talking about? While Baltimore-Washington obviously isn't Los Angeles (where the Angels ($3B) and Dodgers ($7B) are getting $10B over the next 20-25 years), I don't think it's going out on a limb to say this area is much more valuable than the Rangers ($3B) deal. Angelos knows that in a rights deal with a new RSN, the tables would be turned, and Washington, due to its larger market share, would get more fees. However, the amount the Orioles would get would still be considerably larger than what they are getting now, and, again, Angelos is the only one of the two concerned with that.

[eddie83]

Ted Lerner doesn't seem to be at all concerned with the "real tax issues of higher rights fees," nor is he certain that MASN can't afford to pay closer to market rates. As to the purchase price, Lerner wouldn't be entitled to a higher percentage of the sale of the company than what he currently owns, and I presume he wouldn't have a problem with that because of the magnitude of the deal particularly versus staying joined at the hip with Pete Angelos. What magnitude are we talking about? While Baltimore-Washington obviously isn't Los Angeles (where the Angels ($3B) and Dodgers ($7B) are getting $10B over the next 20-25 years), I don't think it's going out on a limb to say this area is much more valuable than the Rangers ($3B) deal. Angelos knows that in a rights deal with a new RSN, the tables would be turned, and Washington, due to its larger market share, would get more fees. However, the amount the Orioles would get would still be considerably larger than what they are getting now, and, again, Angelos is the only one of the two concerned with that.

Did those teams get that much money due to other factors that don't apply here? My point is a big reason the Dodgers got so much money is that FOX didn't want to see them start their own RSN. Here MASN already exists. It isn't like FOX or another company would be worried about more competition because it is already here.

[Frobby]

http://www.washingtonpost.com/blogs/nationals-journal/wp/2014/07/15/bud-selig-says-masn-negotiations-could-be-resolved-by-january-2015/

"We've spent an enormous amount of time," Selig said. "We're working through a lot of really tough detail. When you have two clubs that have differences of opinions, they're very complex subjects. My objective is to keep away from what used to go in this sport, where you had owners fighting owners publicly. So we're working through a lot of difficulty. I'm satisfied we're at least moving in the right direction."

When asked if he believed the resolution would come before his retirement, Selig replied, "I would say there's a good chance, yes," he said.

The optimism struck a chord because of Selig's pessimism on other issues. Prior to addressing MASN negotiations, he conceded that stadium issues in Tampa Bay and Oakland would not be solved before he retires.

"There are some problems that take longer to solve than others," Selig said.

In recent years, Selig has shied from timetables and specifics, stating only that issued had dragged on longer than he thought, never suggesting the end may be in sight.

[weams]

http://www.washingtonpost.com/blogs/nationals-journal/wp/2014/07/15/bud-selig-says-masn-negotiations-could-be-resolved-by-january-2015/

Well, I find this interesting for the offseason then.

[TonySoprano]

Bud won't resolve this. Book it.

[clapdiddy]

I realize there is more to it, but I thought there was some sort of guarantee about the MASN revenue splits built into the original framework of when Angelos gave his "blessing" to establishing a team in DC.

I don't understand why it's taken this long to resolve an issue that was already established. If the Nats ownership doesn't like it, I'd say "tough cookies". That's what the original agreement called for, so stick it where the sun don't shine.

[Frobby]

I realize there is more to it, but I thought there was some sort of guarantee about the MASN revenue splits built into the original framework of when Angelos gave his "blessing" to establishing a team in DC.

I don't understand why it's taken this long to resolve an issue that was already established. If the Nats ownership doesn't like it, I'd say "tough cookies". That's what the original agreement called for, so stick it where the sun don't shine.

The agreement called for the amount of rights fees to be paid to the Nats to be "reset" every five years. If the parties can't agree on the "reset" amounts, then there is an arbitration process. That's what this dispute is about. The Nats haven't done anything to reneg on the agreement.

[clapdiddy]

The agreement called for the amount of rights fees to be paid to the Nats to be "reset" every five years. If the parties can't agree on the "reset" amounts, then there is an arbitration process. That's what this dispute is about. The Nats haven't done anything to reneg on the agreement.

Gotcha. It has probably been pointed out before, but I didn't realize there was a "reset" agreement.

[Redskins Rick]

Bud won't resolve this. Book it.

I agree, one of those things, he is required to say.

In retirement when he will be asked about it. He will say, dang, I wanted to fix it and it was on my bucket list, but it was just too complex a situation.

[Frobby]

Bud won't resolve this. Book it.

I agree, one of those things, he is required to say.

In retirement when he will be asked about it. He will say, dang, I wanted to fix it and it was on my bucket list, but it was just too complex a situation.

I don't know. Bud easily could have gotten away with a more vague, less optimistic statement, but he chose to express some optimism, so that makes me think a resolution may be close. It's what, 2.5 seasons overdue? Hopefully it has taken so long because they are working on a win-win scenario that won't require negotiations every five years.

[Redskins Rick]

I don't know. Bud easily could have gotten away with a more vague, less optimistic statement, but he chose to express some optimism, so that makes me think a resolution may be close. It's what, 2.5 seasons overdue? Hopefully it has taken so long because they are working on a win-win scenario that won't require negotiations every five years.

To me, it's like a divorce.

MASN-Nats and MASN-Orioles want to split and go their own ways, but they both want more than their fair share, and since the boundaries are not set in stone, it's going to be hard to split the companies.

Which is why it's 2.5 seasons overdue.

[weams]

Bud won't resolve this. Book it.

He has expressed optimism before.