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O's / Nationals MASN TV Fees (2 of 2)


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#1 JeffLong

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Posted 29 July 2014 - 02:55 PM

EDIT from BSL:  This has been a major topic on this board for some time. For the previous discussion, please see this thread: http://www.baltimore...etween-bal-was/

 

With this story now getting new life, I thought it was time for a new thread.

 

 

 

 

Hollywood Reporter: http://www.hollywood..._source=twitter

 

What's been untold until now is that on June 30, the MLB committee adjudicating the dispute issued its decision. The award favored the Nationals. That prompted attorneys for the parties to swing into high gear and Commissioner Selig to attempt to get out in front of the situation.

 

Selig, who owned the Milwaukee Brewers before becoming commissioner and whose efforts to keep this all under wraps has included sending the Nationals money, then advises about the consequences about taking the dispute beyond the inner sanctum of baseball:

 

"Both the Orioles and the Nationals have at various times made threats to institute litigation in connection with this dispute, despite my office's extended, good-faith efforts to have this matter resolved by agreement. On a personal note, I owned a Club for decades and I can honestly say that under no circumstances would I have threatened, let alone commenced, litigation against Baseball. Please be advised that nothing in the Agreement authorizes the parties to file any lawsuit... I want there to be no doubt that, if any party initiates any lawsuit, or fails to act in strict compliance with the procedures set forth in the Agreement concerning the [Revenue Sharing Definitions Committee of Major League Baseball]'s decision, I will not hesitate to impose the strongest sanctions available to me under the Major League Constitution."


Despite Selig's stern warning, and notwithstanding confidence he projected publicly, the attorneys for the parties began firing off shots at each other, with Selig cc'd.

 

All this means that secrets have been spilled with ramifications to be determined at a moment when the value of TV rights deals is skyrocketing and the league is dealing with a TV carriage impasse involving the Los Angeles Dodgers and Time Warner Cable.


We've asked MLB whether Selig intends to follow up on his "strongest sanctions" threat. According to Article II of the MLB Constitution, the MLB Commissioner's powers include "suspension or removal of any owner, officer or employee of a Major League Club." The league once basically forced former Dodgers owner Frank McCourt to sell the team. If MLB chooses to respond to THR's inquiry, we'll update.


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#2 Matt_P

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Posted 29 July 2014 - 03:11 PM

If that article is right then the Nationals are getting an extra $20 million in 2014 or about 2.3B over twenty years. I find it highly unlikely.

 

But if it's right then I build the right model in the articles. That's pretty cool.


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#3 Domenic

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Posted 29 July 2014 - 03:15 PM

I just read that article via the auspices of another site. Basically the way I understand it (without going into the legalese Angelos does have a very legitimate grounds for a lawsuit here. And if he does that, the commissioner's office could in theory pull a Donald Sterling type of deal and force him to sell the team (under vastly different circumstances of course). And for that matter the same could be true of the Lerners and their ownership of the Nationals. 


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#4 Coker

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Posted 29 July 2014 - 03:22 PM

So MLB secretly sent the Nats an extra $25M during/for the 2013 season?

I'd say that's a pretty big deal that is seemingly being glossed over. Or is it just me?
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#5 Domenic

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Posted 29 July 2014 - 03:27 PM

So MLB secretly sent the Nats an extra $25M during/for the 2013 season?

I'd say that's a pretty big deal that is seemingly being glossed over. Or is it just me?

It's "kind of" a big deal. First off that's not new - that was leaked out awhile ago, but it's being brought to light again now. I don't think the Orioles would complain about it, but all it would take would be an owner to raise heck about that and asking where his payout is. But the fact is that it behooves the other owners for Washington to win this case because then perhaps their rights fees will go up. So bearing that in mind one would think that they'd all be okay with it - but you never know.


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#6 Matt_P

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Posted 29 July 2014 - 03:29 PM

So MLB secretly sent the Nats an extra $25M during/for the 2013 season?

I'd say that's a pretty big deal that is seemingly being glossed over. Or is it just me?

 

If this happens then Angelos will lose some $600 million over 20 years. Your detail is small potatoes is comparison.


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#7 PatrickDougherty

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Posted 29 July 2014 - 03:48 PM

So MLB secretly sent the Nats an extra $25M during/for the 2013 season?

I'd say that's a pretty big deal that is seemingly being glossed over. Or is it just me?

I know that comparatively, $25M isn't huge, but I bet most teams would looooooove another $25M sitting around.


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#8 DJ MC

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Posted 29 July 2014 - 03:57 PM

Well this just got interesting again.

 

I know it's not going to happen, but I'm going to sit back and imagine a federal court injunction against the operations of National League Baseball Club of Washington, LLC from anywhere within a 75-mile radius of the offices of American League Baseball Club of Baltimore, LLC, and cackle maniacally :D


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#9 JeffLong

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Posted 29 July 2014 - 04:11 PM

So MLB secretly sent the Nats an extra $25M during/for the 2013 season?

I'd say that's a pretty big deal that is seemingly being glossed over. Or is it just me?

 

Is this different than the cash MLB has been sending them every year for the past few years? I understood it to be the same, but maybe I'm wrong.

 

As Domenic mentioned they've been sending Ted Lerner $$$ for a while now.


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#10 Domenic

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Posted 30 July 2014 - 04:42 AM

In effect, contractually MASN's in the right on this. I do think that the Nationals' TV rights are worth much more than what the formula turns up, however the contract stipulates effectively that "the formula that MLB has always used is to be used in this case." However the issue in a prospective lawsuit is that both parties agreed that if there was a disagreement on how much the rights fees should be that they'd go to a supposed impartial panel and that their ruling would be binding. So the court will have to decide if it's going to enforce the formula, or whether they're going to enforce the part that says the panel's ruling is binding. It's probably worth mentioning when they do go to court that those other three owners had it in their best interests to see MASN lose. Now perhaps their rights fees might be worth more. 


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#11 Matt_P

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Posted 30 July 2014 - 07:14 AM

The contract does state that the ruling of the arbitration committee is final unless there's corruption, fraud or miscalculating of numbers. The Os are going for the first one.

 

The Washington Post wrote a very sloppy article that missed a lot of details. But they did mention one interesting thing. They mentioned that MLB asked Allen and Co to seek potential buyers. Allen and Co worked with Comcast around 2005 (I don't know exactly when and it doesn't really matter) to try and build a network with the Orioles, Nationals, Wizards and Capitals. They offered the Nats and Orioles a 10 year/250 million deal (something in that ballpark maybe it's 240 million) from 2005-2014 and the potential of 50% equity. I remember the Orioles were not happy with them and found out that they owned some Comcast stock.

 

The fact that MLB would go to them specifically is extremely interesting. It could be that they're the only/best game in town. It could also be a slap in the face.

Edit: Here's Bud Selig's letter. The fact that he's misquoting 2.J.3 is not going to impress the Orioles.

 

"It's final and binding on the Nationals and the RSN, and the Nationals and the RSN may seek to vacate or modify such fair market valuation as established by the RSDC only on the grounds of corruption, fraud or miscalculation of figures."

 

http://www.scribd.co...rioles-and-Nats



#12 DuffMan

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Posted 30 July 2014 - 07:17 AM

I wonder if Selig has tried leveraging the 2016 All-Star Game to get Angelos to play nice.



#13 Matt_P

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Posted 30 July 2014 - 07:23 AM

I wonder if Selig has tried leveraging the 2016 All-Star Game to get Angelos to play nice.

 

The Os are losing (Angelos is losing more) $600 million over 20 years in rights fees and equity stake payments and the value of MASN probably will drop by 2/3 or so causing him maybe another $400 million.

 

The 2016 all-star game isn't worth a billion dollars.



#14 PatrickDougherty

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Posted 30 July 2014 - 07:32 AM

Is this different than the cash MLB has been sending them every year for the past few years? I understood it to be the same, but maybe I'm wrong.

 

As Domenic mentioned they've been sending Ted Lerner $$$ for a while now.

I think it's the same, but the last reported number I had seen was $7M. IMO a jump to $25M is pretty significant. Plus it means that either the Nats demonstrated or MLB calculated a much larger fair market value in 2013 than the Nationals had been getting, if I'm reading into this appropriately.


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#15 Domenic

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Posted 30 July 2014 - 08:19 AM

On paper, the Orioles actually stand to benefit from this because MASN will in theory be paying them more money. However as we all know it's really the same money; as Buck says, it's "robbing Peter to pay Paul." (No pun intended with the "Peter" reference.) 

 

Without knowing the legalese of the case, I think MASN has a legitimate gripe in terms of corruption. It'll be interesting to see to what degree MASN would have to prove that, however the fact that those three owners stood to benefit from elevated rights fees should at least introduce a reasonable doubt as to whether or not there was some sort of collusion. I also have to wonder if there isn't some sort of anti-Angelos gerrymandering effort on the part of the league. I know he's not popular among the other owners, and if they could either force him to sell MASN or the Orioles (possibly both) they'd either devalue him a lot or be done with him all together.


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#16 JeffLong

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Posted 30 July 2014 - 08:28 AM

I think it's the same, but the last reported number I had seen was $7M. IMO a jump to $25M is pretty significant. Plus it means that either the Nats demonstrated or MLB calculated a much larger fair market value in 2013 than the Nationals had been getting, if I'm reading into this appropriately.

 

Gotcha. I had seen $25MM - $30MM somewhere so the $25MM figure didn't come as a shock to me.


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#17 BSLChrisStoner

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Posted 30 July 2014 - 09:25 AM

NBC Sports / Hardball Talk: The Nationals and Orioles dispute over TV money is about to explode



#18 Ricker Says

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Posted 30 July 2014 - 09:28 AM

Wow... so this thing really has legs now. I can't imagine Selig or the next comish pulling an Adam Silver over this though. 100% bluff, IMO.


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#19 Chris B

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Posted 30 July 2014 - 09:42 AM

Since I haven't really been following, what does all this mean?

 

Surely Selig isn't going to actually take away ownership from Angelos or the Lerners. But they (Angelos) are definitely not going to give up their ownership. Is has to go to litigation, right?



#20 Ricker Says

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Posted 30 July 2014 - 09:44 AM

Since I haven't really been following, what does all this mean?

 

Surely Selig isn't going to actually take away ownership from Angelos or the Lerners. But they (Angelos) are definitely not going to give up their ownership. Is has to go to litigation, right?

 

Seems that way... yet Selig is threatening to do just that if it does go that far. He's that worried over the precious books being opened.

 

What's going to be annoying as hell, and I don't know nearly as much as many of you, but when all the casuals start talking about this once it hits ESPN. That is going to drive me crazy.


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"You can't sit on a lead and run a few plays into the line and just kill the clock. You've got to throw the ball over the damn plate and give the other man his chance. That's why baseball is the greatest game of them all." ~ The Earl of Baltimore




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