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

[sevastras]

I am not a lawyer but yes, that is what they do say when I've asked. They also say that it was absolutely the deal. MLB has told the new Nationals ownership otherwise. The deal was struck between MLB and Orioles. Not negotiated with the Lerners.

If that is the case, then MLB has every reason to be bias for the Nationals. The Lerners next move if they arent happy with the outcome is to sue MLB for misrepresentation in the sale, although it would appear that the Lerners may have a coin toss because MLB could claim they didnt do their due diligence. One of those times that you are glad our owner is Pete.

[Big Al]

Hold on... let's back this truck up.

I, admittedly, haven't been following this too closely. Hoping someone can explain this situation like I'm a 3 yr old.

O's and MLB made an agree pre-Nats that dictated what percentage of TV rights the O's would receive through MASN. Correct?

Every 5 years the two teams revisit the agreement and an arbitration-type panel has the ability to make adjustments to the payout agreement. Correct?

The Nats feel they are severely short-changed. O's want to keep a large part of the pie. Correct?

I'm surrounded by Nats fans in my neighborhood that repeatedly point-out this MASN dispute as one of the Orioles ongoing evils.

What's the quarrel about at this point and who is in the right vs wrong?

For a three year old, because admittedly, that's about all I can comprehend.

Nats/Washington Baseball are a little kid who wanted a puppy and threw a tantrum to get it.

Orioles are the older brother.

MLB is the parent.

MLB said Washington could have it's puppy, but only if they would take care of it.

After a while, Washington said they no longer wanted to take care of the dog and that the older brother should help, even though the older brother never wanted a dog.

[accinfo]

Well, I agree with that. But who knows what settlement positions either side has taken since the RSDC decision came down? It's obvious MASN isn't going to settle unless the number is substantially less than what the RSDC came up with, but if they are adamantly sticking to the "Bortz number" they submitted to the RSDC, I don't see the Nats just accepting that.

First of all thanks again Frobby for explaining these proceedings to the rest of us. Not that I completely understand. LOL. From my CPA's point of view I would think it would be fairly easy to calculate how much each team contributes to income based on market sizes, ratings of each game watched, etc. I guess the sticky area is what is the compensation that MLB agreed to pay the Orioles for giving up their rights to the DC market? How long does DC have to pay the Orioles for giving up those rights? I do know that MASN seems to go out of their way to give the Nats equal coverage on the station.

[Frobby]

First of all thanks again Frobby for explaining these proceedings to the rest of us. Not that I completely understand. LOL. From my CPA's point of view I would think it would be fairly easy to calculate how much each team contributes to income based on market sizes, ratings of each game watched, etc. I guess the sticky area is what is the compensation that MLB agreed to pay the Orioles for giving up their rights to the DC market? How long does DC have to pay the Orioles for giving up those rights? I do know that MASN seems to go out of their way to give the Nats equal coverage on the station.

First of all, the agreement explicitly states that the Rights fees for each team have to be equal. So, whatever the Nats get, the Orioles also get. The higher the amount, the less profit is retained within MASN. The Orioles own the majority of MASN -- it started off 85-15 and after a few years the Nats' ownership increases by 1% a year, until it reaches 33%. I think right now it's at about 80-20. So, it is in the Orioles' interests for rights fees to be low, even though they get the same amount as the Nats, because they get the majority share of the remaining profits.

And by the way, the deal is forever, unless some new deal is negotiated. MASN owns the rights to broadcast O's and Nats games in perpetuity, and the O's will always own at least 67% of MASN, so the O's will always get more from the deal than the Nats do. That was Angelos' price for not suing to prevent the Nats from moving to DC (a case that, IMO, he was somewhat unlikely to win, but MLB did not have the stomach to litigate it).

[DrungoHazewood]

For a three year old, because admittedly, that's about all I can comprehend.

Nats/Washington Baseball are a little kid who wanted a puppy and threw a tantrum to get it.

Orioles are the older brother.

MLB is the parent.

MLB said Washington could have it's puppy, but only if they would take care of it.

After a while, Washington said they no longer wanted to take care of the dog and that the older brother should help, even though the older brother never wanted a dog.

The Washington DC area was by far the biggest and wealthiest US city without a Major League team. On a good day it takes about an hour to go from a random point in DC to OPACY, with traffic its often twice that. MLB carved up the country into territories sometime in the past, allowing the Orioles to claim everything from York, PA to the South Carolina border despite a tenuous connection any fans in most of that area.

The Orioles reaped the benefits of a baseball monopoly for almost 35 years, but now are bitterly upset that the very same monopoly didn't allow them to continue to claim and extract money from fans many hours away as their own, and on their own terms. Did the Senators spend years in court when the Orioles took their territory? Or the Giants vs the A's? Or Dodgers vs Angels? Or even Yanks vs Mets?

[Frobby]

The Washington DC area was by far the biggest and wealthiest US city without a Major League team. On a good day it takes about an hour to go from a random point in DC to OPACY, with traffic its often twice that. MLB carved up the country into territories sometime in the past, allowing the Orioles to claim everything from York, PA to the South Carolina border despite a tenuous connection any fans in most of that area.

The Orioles reaped the benefits of a baseball monopoly for almost 35 years, but now are bitterly upset that the very same monopoly didn't allow them to continue to claim and extract money from fans many hours away as their own, and on their own terms. Did the Senators spend years in court when the Orioles took their territory? Or the Giants vs the A's? Or Dodgers vs Angels? Or even Yanks vs Mets?

Under the AL charter at the time, the Senators had an absolute right to veto the Orioles moving into their territory, and they waived it. The O's did not have that veto right, at least nothing as clear and obvious as what the Senators had. They constructed an argument having to do with TV territories and threatened to litigate, and that's what led to the MASN deal. Putting aside the legalities, I do believe it was more or less fair to do this, to avoid having the Orioles become a small market team that would be on a par with Tampa or Pittsburgh.

[sevastras]

The Washington DC area was by far the biggest and wealthiest US city without a Major League team. On a good day it takes about an hour to go from a random point in DC to OPACY, with traffic its often twice that. MLB carved up the country into territories sometime in the past, allowing the Orioles to claim everything from York, PA to the South Carolina border despite a tenuous connection any fans in most of that area.

The Orioles reaped the benefits of a baseball monopoly for almost 35 years, but now are bitterly upset that the very same monopoly didn't allow them to continue to claim and extract money from fans many hours away as their own, and on their own terms. Did the Senators spend years in court when the Orioles took their territory? Or the Giants vs the A's? Or Dodgers vs Angels? Or even Yanks vs Mets?

Those all took place 50+ years ago. How about the 49ers when the Raiders wanted to go to San Jose?

Besides, this isnt the power company charging whatever they want. This is a sports team and you can live in Baltimore and be a Reds fan if you want. You do not have to support the team or give them any money.

[weams]

First of all, the agreement explicitly states that the Rights fees for each team have to be equal. So, whatever the Nats get, the Orioles also get. The higher the amount, the less profit is retained within MASN. The Orioles own the majority of MASN -- it started off 85-15 and after a few years the Nats' ownership increases by 1% a year, until it reaches 33%. I think right now it's at about 80-20. So, it is in the Orioles' interests for rights fees to be low, even though they get the same amount as the Nats, because they get the majority share of the remaining profits.

And by the way, the deal is forever, unless some new deal is negotiated. MASN owns the rights to broadcast O's and Nats games in perpetuity, and the O's will always own at least 67% of MASN, so the O's will always get more from the deal than the Nats do. That was Angelos' price for not suing to prevent the Nats from moving to DC (a case that, IMO, he was somewhat unlikely to win, but MLB did not have the stomach to litigate it).

That is why it is important that MASN become bankrupted, so that it's assets are divided among the creditors. Asset being broadcast rights.

[Frobby]

That is why it is important that MASN become bankrupted, so that it's assets are divided among the creditors. Asset being broadcast rights.

Under the rationale of the RSDC's decision, the rights fees intentionally were set at a level where MASN was projected to make a profit. So, while the Nats might not think it is relevant or desirable for MASN to remain solvent, the RSDC clearly did.

[Can_of_corn]

The Washington DC area was by far the biggest and wealthiest US city without a Major League team. On a good day it takes about an hour to go from a random point in DC to OPACY, with traffic its often twice that. MLB carved up the country into territories sometime in the past, allowing the Orioles to claim everything from York, PA to the South Carolina border despite a tenuous connection any fans in most of that area.

The Orioles reaped the benefits of a baseball monopoly for almost 35 years, but now are bitterly upset that the very same monopoly didn't allow them to continue to claim and extract money from fans many hours away as their own, and on their own terms. Did the Senators spend years in court when the Orioles took their territory? Or the Giants vs the A's? Or Dodgers vs Angels? Or even Yanks vs Mets?

So far the Orioles have been showing that the other parties didn't properly honor their agreement.

Should the Orioles have simply allowed that to happen?

I for one think it was shortsighted of the Senators to allow the Orioles into their territory as easily as they did. Might have been a contributing factor in the team having needed to relocate.

[Frobby]

So far the Orioles have been showing that the other parties didn't properly honor their agreement.

Should the Orioles have simply allowed that to happen?

I'm OK with the O's fighting for the best outcome they can get, but to date I would not say that they've shown the other parties didn't honor their agreement. Bottom line, if the Nats had hired some other law firm that had made the exact same arguments, the outcome with the RSDC would have been the same and Justice Marks would have affirmed the award. Frankly, it would not shock me if the appellate court overrules Justice Marks and affirms the award anyway. But we won't know that for quite some time.

[accinfo]

So far the Orioles have been showing that the other parties didn't properly honor their agreement.

Should the Orioles have simply allowed that to happen?

I for one think it was shortsighted of the Senators to allow the Orioles into their territory as easily as they did. Might have been a contributing factor in the team having needed to relocate.

It was a much different world when the Senators allowed the Orioles into their territory from a revenue point of view. I don't think it was conceivable how big of a business that sports has become.

[Can_of_corn]

It was a much different world when the Senators allowed the Orioles into their territory from a revenue point of view. I don't think it was conceivable how big of a business that sports has become.

I'm just saying I would have tried to get something out of it.

[Can_of_corn]

I'm OK with the O's fighting for the best outcome they can get, but to date I would not say that they've shown the other parties didn't honor their agreement. Bottom line, if the Nats had hired some other law firm that had made the exact same arguments, the outcome with the RSDC would have been the same and Justice Marks would have affirmed the award. Frankly, it would not shock me if the appellate court overrules Justice Marks and affirms the award anyway. But we won't know that for quite some time.

Sure, whatever. However you want to word it is fine.

I tried to be vague enough and evidently failed.

[DrungoHazewood]

So far the Orioles have been showing that the other parties didn't properly honor their agreement.

Should the Orioles have simply allowed that to happen?

I for one think it was shortsighted of the Senators to allow the Orioles into their territory as easily as they did. Might have been a contributing factor in the team having needed to relocate.

No, I get that the agreement needs to be followed as written. Even if it's bizarre and what I consider a blatant abuse of monopolistic power.