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

[brooksfrankjim]

Screw the Nats. They and the Orioles are getting the same rights fees from MASN. If the Orioles get $40m then the Nats get $40m. Basically, the Nats don't like the fact that the Orioles are getting 85% of MASN profits, while the Nats are getting 15%. If the Nats piece of the pie is $8m then the Orioles piece is a tad above $50m.

This will the whole reason the deal was set up in the first place. The issue is the Nats feel they are disadvantaged when the fees paid by cable companies for MASN increases. Let's assume MASN fees were to double, but the rights fees paid to the Orioles and Nats only increased marginally...to say $45m.

The Orioles would reap approximately $100m of the MASN profits and the Nats would only get $16m. This is what the fight is about.

[DrungoHazewood]

The root of all of this is the (in my opinion) ridiculous idea that each MLB team has an exclusive territory free from competition. I think any team should be able to do business anywhere it wants. If the Expos want to move to DC, have at it. If the Rays can somehow get out of their lease and want to move to Edmonton or Mexico City or Portland or Brooklyn and think that's best for their profitability and ability to compete, go for it. If the Royals want to make Baltimore a 2-team market and can negotiate with the Maryland Stadium Authority to play in whatever they call the Ravens Stadium with 225-ft foul line dimensions, good on 'em.

I know this isn't a popular sentiment around here, but I just never thought it was right that Peter Angelos and the Baltimore Orioles (or any other team) had any say about where another team wanted to do business. It's monopoly abuse. It might hurt the Orioles, but the Nats should have whatever TV/cable deal they can negotiate.

[Redskins Rick]

The root of all of this is the (in my opinion) ridiculous idea that each MLB team has an exclusive territory free from competition. I think any team should be able to do business anywhere it wants. If the Expos want to move to DC, have at it. If the Rays can somehow get out of their lease and want to move to Edmonton or Mexico City or Portland or Brooklyn and think that's best for their profitability and ability to compete, go for it. If the Royals want to make Baltimore a 2-team market and can negotiate with the Maryland Stadium Authority to play in whatever they call the Ravens Stadium with 225-ft foul line dimensions, good on 'em.

I know this isn't a popular sentiment around here, but I just never thought it was right that Peter Angelos and the Baltimore Orioles (or any other team) had any say about where another team wanted to do business. It's monopoly abuse. It might hurt the Orioles, but the Nats should have whatever TV/cable deal they can negotiate.

Nice post and I am in total agreement with you, and you are right not popular sentiment on an Oriole discussion board, but still is true.

[jtm]

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.

NO IT'S NOT!!! This is the whole point people need to get away from. It's about broadcast rights for the area stretching from York, PA to Charlotte, NC. MLB made a bad decision first rescuing the Expos from bankruptcy, second inserting them into the Orioles broadcast territory, and third giving the Os the upper hand permanently in this deal. Now they want to reneg. MASN-Os and MASN-Nats is basically taking away revenues from the Orioles without compensation, after promising them they would not take away their broadcast rights. And they did that when PA threatened to sue with legitimate precedent. People need to stop insinuating that we can just split up these areas, unless you want the Orioles to become the Pirates and Royals in terms of revenue. And that would happen without compensation. Bud will settle this problem before he goes. He will say, oh well, there's nothing that can be done. The Lerners bought in knowing their franchise rights. Now they have to deal with it. End of story, unless they want to buy out the Os somehow.

[DrungoHazewood]

MLB made a bad decision first rescuing the Expos from bankruptcy...

The bad decision that led to this one was worse: Giving the Expos to Loria and essentially sabotaging the them as a ploy to either get a taxpayer-funded stadium, or failing that, justifying relocation. Loria couldn't get a free stadium, so he systematically blew up the Expos and shoved a middle finger in the faces of their fans and then MLB said "look, Montreal can't support baseball."

[TonySoprano]

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.

Less optimistic statement such as what? We think it may get done in another six months which will make three years arguing this? (or is it four?*)

The four-year battle over right fees from the Mid-Atlantic Sports Network between the Washington Nationals and Baltimore Orioles could be resolved by early next year, MLB commissioner Bud Selig said at the annual BBWAA luncheon Tuesday.

source - SI.com*

He has expressed optimism before.

Which tells you not to read much into what he says this time.

[Redskins Rick]

Neither side is going to be happy with the final decision, which is why this is dragging out.

Of course, IMO.

[osfan83]

The root of all of this is the (in my opinion) ridiculous idea that each MLB team has an exclusive territory free from competition. I think any team should be able to do business anywhere it wants. If the Expos want to move to DC, have at it. If the Rays can somehow get out of their lease and want to move to Edmonton or Mexico City or Portland or Brooklyn and think that's best for their profitability and ability to compete, go for it. If the Royals want to make Baltimore a 2-team market and can negotiate with the Maryland Stadium Authority to play in whatever they call the Ravens Stadium with 225-ft foul line dimensions, good on 'em.

I know this isn't a popular sentiment around here, but I just never thought it was right that Peter Angelos and the Baltimore Orioles (or any other team) had any say about where another team wanted to do business. It's monopoly abuse. It might hurt the Orioles, but the Nats should have whatever TV/cable deal they can negotiate.

Well...I believe MLB is essentially one company with 30 different divisions. Under your scenario, teams would operate independent of the other teams...One team might not want to play 162 games, one team might want to schedule games against Japanese teams. Hell two teams could agree to share an employee, playing part time for each team.

In order to have a successful league, teams need to report to a larger entity, They all need each other, and need to be protected from each other. I have no problem with teams having territorial rights.

[Guest rochester]

The bad decision that led to this one was worse: Giving the Expos to Loria and essentially sabotaging the them as a ploy to either get a taxpayer-funded stadium, or failing that, justifying relocation. Loria couldn't get a free stadium, so he systematically blew up the Expos and shoved a middle finger in the faces of their fans and then MLB said "look, Montreal can't support baseball."

Is the above contradictory to the below? I may have misread but the below sounds like there is no need for justification.

The root of all of this is the (in my opinion) ridiculous idea that each MLB team has an exclusive territory free from competition. I think any team should be able to do business anywhere it wants. If the Expos want to move to DC, have at it. If the Rays can somehow get out of their lease and want to move to Edmonton or Mexico City or Portland or Brooklyn and think that's best for their profitability and ability to compete, go for it. If the Royals want to make Baltimore a 2-team market and can negotiate with the Maryland Stadium Authority to play in whatever they call the Ravens Stadium with 225-ft foul line dimensions, good on 'em.

[Number5]

Is the above contradictory to the below? I may have misread but the below sounds like there is no need for justification.

The root of all of this is the (in my opinion) ridiculous idea that each MLB team has an exclusive territory free from competition. I think any team should be able to do business anywhere it wants. If the Expos want to move to DC, have at it. If the Rays can somehow get out of their lease and want to move to Edmonton or Mexico City or Portland or Brooklyn and think that's best for their profitability and ability to compete, go for it. If the Royals want to make Baltimore a 2-team market and can negotiate with the Maryland Stadium Authority to play in whatever they call the Ravens Stadium with 225-ft foul line dimensions, good on 'em.

Giving exclusive territorial rights is standard in franchising, whether you are talking about a MLB franchise or a Popeye's Fried Chicken franchise. The agreement that gave the Orioles the lion's share of the MASN profits was compensation for MLB breaking the franchise agreement as to territorial rights. The Orioles have a very strong case. The Nationals -- not so much.

[Roll Tide]

This is just another reason why Angelos shouldn't have allowed an MLB team to move 30 miles from the Orioles and wipe out over half of its tv market and 30% of its fan base. Reading the Nats fans comments it's obvious that the agreement that allowed the moved that permanently moved the Os out of being a large market team shouldn't matter and was executed by the Lerners with their fingers crossed behind their backs.

[DrungoHazewood]

Well...I believe MLB is essentially one company with 30 different divisions. Under your scenario, teams would operate independent of the other teams...One team might not want to play 162 games, one team might want to schedule games against Japanese teams. Hell two teams could agree to share an employee, playing part time for each team.

In order to have a successful league, teams need to report to a larger entity, They all need each other, and need to be protected from each other. I have no problem with teams having territorial rights.

But MLB is also a government-supported and government-sanctioned monopoly which strictly controls what areas get to have high-level professional baseball teams, and which areas get blacked out from watching local MLB unless they pay for certain TV packages. I believe that a condition of their continued preferential treatment and subsidies from government should be that they can't act totally in their own self-interest in every decision. And this includes dividing up the country (plus Canada) as the current owners see fit.

I think teams should be largely independent aside from setting a schedule and a playoff system and some limited transaction rules. Why shouldn't they be able to share a player? In other sports loan agreements are common.

I have no problem with territorial rights if the Majors are broken up into several competing leagues. If the American League wants nobody infringing on the Yanks' territory that's fine. But they'd have absolutely no say over whether or not the National League or the Continental League or the Atlantic Confederation put team(s) there.

[DrungoHazewood]

Is the above contradictory to the below? I may have misread but the below sounds like there is no need for justification.

The root of all of this is the (in my opinion) ridiculous idea that each MLB team has an exclusive territory free from competition. I think any team should be able to do business anywhere it wants. If the Expos want to move to DC, have at it. If the Rays can somehow get out of their lease and want to move to Edmonton or Mexico City or Portland or Brooklyn and think that's best for their profitability and ability to compete, go for it. If the Royals want to make Baltimore a 2-team market and can negotiate with the Maryland Stadium Authority to play in whatever they call the Ravens Stadium with 225-ft foul line dimensions, good on 'em.

If the Expos wanted to leave and there were no entangling contracts or other agreements preventing that, they should have been allowed to. But MLB found it necessary to destroy the franchise to create justification for the move. I think Bud, despite his own entrance into MLB by buying the Seattle Pilots and immediately relocating them to Milwaukee, doesn't like relocation and thought he should have a strong case for moving the Expos based on lack of support in Montreal.

I think it was underhanded. If they wanted to move into an untapped, lucrative market, and abandon another market that was unwilling to fork over $500M for a free stadium... well, just come out and say it. Don't lie to everyone.

[DrungoHazewood]

Giving exclusive territorial rights is standard in franchising, whether you are talking about a MLB franchise or a Popeye's Fried Chicken franchise.

But Popeye's doesn't have exclusive rights to sell fried chicken in the US and Canada, and doesn't have local governments offering up hundreds of $millions, if not $billions, in subsidies and preferential tax treatment and facilities. This might be a reasonable analogy if the state of Maryland gave Popeye's $500M and KFC and all the other chicken joints saw that, gave up, and went out of business 100 years ago.

I'm perfectly fine with territorial rights for a franchise-based company that faces competition. As far as I'm concerned MLB can carve up the country any way it wants, just so long as it's ok being divided up into multiple competing leagues and there's a law forbidding taxpayer-funded or taxpayer-subsidized sports stadiums and related infrastructure.

[Number5]

But Popeye's doesn't have exclusive rights to sell fried chicken in the US and Canada, and doesn't have local governments offering up hundreds of $millions, if not $billions, in subsidies and preferential tax treatment and facilities. This might be a reasonable analogy if the state of Maryland gave Popeye's $500M and KFC and all the other chicken joints saw that, gave up, and went out of business 100 years ago.

I'm perfectly fine with territorial rights for a franchise-based company that faces competition. As far as I'm concerned MLB can carve up the country any way it wants, just so long as it's ok being divided up into multiple competing leagues and there's a law forbidding taxpayer-funded or taxpayer-subsidized sports stadiums and related infrastructure.

There is plenty of competition for the entertainment dollar. You are off-base on this.

Both MLB and the Nationals' ownership group entered into this with their eyes wide open, and under no misconceptions about what they were agreeing to.