With the Battle of the Beltways now complete and the Baltimore Orioles taking three-of-four games, the issue of the mid-Atlantic Sports Network has been simmering around the region for the past few days. This was recently addressed by Birds Watcher’s sister site, District On Deck, and I feel it’s worth mentioning from the opposite perspective here on Birds Watcher. In a nutshell: when the Montreal Expos wanted to relocate to become the Washington Nationals, Orioles’ owner Peter Angelos was ready to go to court to prevent the move so as to protect what he deemed to be the Orioles’ territorial rights in the DC market. The compromise that was reached was that Angelos would “allow” the Expos to relocate, however he would be given majority ownership of a new regional sports network (MASN) that would own TV rights for both the O’s and Nats for the foreseeable future.
The contract has a mandatory reset for the TV rights fees every five years, the first of which was to be prior to the 2012 season. The MASN contract also has the stipulation that both the Orioles and Nationals get the same amount of revenue from MASN, so whatever the Nationals receive would be what the Orioles would get paid as well. There’s a sliding scale in the MASN contract legalese which allegedly stipulates how much those rights fees can go up or down. Based on that formula, MASN offered the Nationals $34 million during the 2011-12 off season. The Nationals claimed that their ratings were up and that based upon other cities’ TV deals the “going rate” was in the neighborhood of $120 million.
So since that time MASN and the Nationals have been engaged in a tug-of-war, into which now commissioner Bud Selig has stepped as well. It’s important to note that contrary what is often said and reported in the news media, the Orioles do not own the Nationals’ TV rights; MASN does. MASN and the Orioles happen to be owned by the same person (Angelos), but as two different entities. That aside, if MASN were to agree to give the Nationals what they feel they’re due, they would then be paying out $240 million (because the O’s would have to get the same). That would effectively bankrupt the network. However the fact is that MASN’s claiming that they have the legal right to only pay out the $34 million given the formuli in the contract.
To put this in simplistic terms, a deal’s a deal. Major League Baseball wanted no part of going to court against Peter Angelos, who’s proven over time that he’s a gifted attorney. So they struck this deal so as to placate the Orioles’ owner and to give him the financial benefits of having another team in his backyard. It’s important to note that at the time MLB owned the Expos, and Ted Lerner didn’t purchase the Washington Nationals until a few years later. However when he did so a stipulation of the sale was that he accept the terms of the MASN deal.
While I don’t disagree that there is an inherent unfairness in having the owner of one team controlling the TV rights of another, again a deal is a deal. The Nationals are asking (and thus expecting) MASN to fork over extra revenue which they feel they’re due according to the “going rate” in the market of TV rights. Their TV rights may well be worth that number for all I know…however a deal is a deal.
The fact that nobody wants to make a decision tells me that all parties know that it’s not a “fair deal” for the Nats. However the strong arm of the law is probably on MASN’s side. Numerous compromises have been thrown out there, including giving the Nationals a higher ownership stake in the network (they currently have a minority stake) or even Angelos getting a lump sum of money for MASN and selling the network outright to FOX Sports. However he seems bent on getting what the agreement says he should get, as is his right.
Ultimately people can complain about the fairness or the justice of the deal all they want, however a deal is always going to be a deal. If MASN wishes to give the Nationals more than what they’re due per their contract, that would certainly be their perogative. However from Peter Angelos’ perspective demanding more money like that comes across as welching on a deal at best. Again, this is not to say that it’s the greatest deal in the world from the Nationals’ perspective. But a deal’s a deal.