Debate: The Nationals, the Orioles, Peter Angelos, and MASN Part 1

Justin,

The Nationals have a very unique television contract. The rights to the Nationals were actually sold by Major League Baseball, when they were the Expos/Nats owners to the Mid-Atlantic Sports Network. The Baltimore Orioles/Peter Angelos started with 90% ownership of the network and allowed the Nationals organization to buy a minority share of 10% growing 1% every year until it reached 33% for 75 million dollars. One of the clauses in the contract was that the Nationals had to be paid a fair market rate that is renegotiated very fifth year. The two teams submitted their bid for the broadcast rights a few years ago and could not come to an agreement, so the negotiation was sent to MLB for arbitration. According to the report the Nationals are asking somewhere north of 100 million a year, which would put them in the ballpark of the top 10 MLB markets (Which DC is). MASN/O’s countered with 37 million plus an equity payment of 8 million which would put the Nats at # 13 in MLB for TV revenue. There is also a stipulation in the contract that the Os and Nats get the same rights fees. MLB has been sitting on this for over a year now, with no end in sight. The questions about this are numerous:

Is this a big deal or just a strange arrangement?

Is this deal MLB brokered with the O’s a fair one?

Are the O’s treating the Nationals fairly within the framework of the deal?

Does MLB have a long term plan?

What are the immediate and long term implications for both franchises?

Justin: Wow. That’s a lot of questions. I’ll try to tackle these one by one.

1. Is this a big deal or just a strange arrangement?

The Orioles/Nationals MASN situation is very strange. I’ve been reading about the Nationals MASN dispute for over a year, and I still don’t really understand it. Peter Angelos and the Orioles don’t really want us to understand it. If the public really knew how much the Orioles made from MASN, everyone would be outraged. Nationals fans would be mad because that’s money their team should be getting. And Orioles fans would be mad because that’s money Peter Angelos isn’t spending on his own team. Angelos wants Orioles fans to think they’re small market, so he doesn’t have the pressure to sign expensive free agents.

2. Is this deal MLB brokered with the O’s a fair one?

You won’t like this answer. Yes, it’s fair. People forget that ten years ago, Washington D.C. didn’t even have a team. MASN was the price Washington D.C. paid to get baseball again. The Baltimore Orioles owned the rights to Washington DC. It’s only fair they split the profits on televising baseball in Washington Metro area.

3. Are the O’s treating the Nationals fairly within the framework of the deal?

The Orioles are negotiating. The Nationals are negotiating too. I don’t think “fair” is a good benchmark for either team. The Orioles are looking out for their best interests. It’s up to MLB to be “fair” since they’re the “neutral” arbiter.

4. Does MLB have a long term plan?

MLB can’t be happy with arrangement. It’s a complete headache. Also, it’s hard to imagine the Orioles owning the Nationals TV rights forever. My guess is that MLB is looking for a way to phase out this bizarre business partnership.

5. What are the immediate and long term implications for both franchises?

For the Nationals? Jordan Zimmermann and Ian Desmond. Both will probably get $100 million deals in the next two years, and the Nationals need money to do it. Beyond that horizon? Bryce Harper. It would be tragic if a team in a top 10 market had to act like small-market team because all their money is going north to Baltimore. For the Orioles? Peter Angelos selling the team. Baltimore has been waiting 15 years for Angelos to sell. But big business deals don’t happen in a sea of uncertainty. Best-case scenario for Orioles fans: MLB give the Orioles are quasi-favorable settlement; then Angelos cashes out and sells the team to a Cal Ripken-led ownership group. Worst case scenario for Orioles fans: MLB sides with the Nationals (or the Orioles perceive it that way), and Angelos uses it as an excuse not to invest in his team.

I’m assuming you disagree with at least some of this. Answer you own questions.

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