Author Topic: WP: Nats MASN deal renegotations will have a huge impact  (Read 203563 times)

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Offline MarquisDeSade

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IIRC, the initial decision that got thrown out I think would have given the Nats an extra $20MM a year, but maybe just a little more than hald of  the money they were asking for.

My point is they've gotten nothing or, if they have, no one's leaked it.  Meanwhile the RSN bubble is dead. 

Offline catocony

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I'm pretty sure that MLB is still quietly making payments to the Nats to partially make up for the shortfall. 

Offline MarquisDeSade

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I'm pretty sure that MLB is still quietly making payments to the Nats to partially make up for the shortfall. 

Which haven't been leaked.

Offline HalfSmokes

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Which haven't been leaked.

the lerners don't seem prone to leaking anything they don't have to

Offline PowerBoater69

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I'm pretty sure that MLB is still quietly making payments to the Nats to partially make up for the shortfall. 

No chance, the terms of the one time $25 million payment was referenced by MASN in the evidence submitted to the court. It definitely hurt the Nats case that the MLB panel was impartial.

Offline PowerBoater69

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IIRC, the initial decision that got thrown out I think would have given the Nats an extra $20MM a year, but maybe just a little more than hald of  the money they were asking for.

The amount in dispute in court is less than $20 million because the Nats share of the operating profits would be wiped out if the MLB fees are upheld. What stinks is that Angelos won't owe interest on the amount he has been holding. Maybe the Nats will do better paying taxes on six years of back payments at the Trump rates.

Offline HalfSmokes

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The amount in dispute in court is less than $20 million because the Nats share of the operating profits would be wiped out if the MLB fees are upheld. What stinks is that Angelos won't owe interest on the amount he has been holding. Maybe the Nats will do better paying taxes on six years of back payments at the Trump rates.

They aren’t looking for operating profits, they’re looking for fair market value.

Offline catocony

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The case was/is about the undervaluation in past years, like before 2014.  The undervaluation is far worse now, and the few percentage points in MASN equity the Nats gain every year isn't coming close to making them whole.  I thought that MLB was paying the Nats something like $20 million a year, for several years at least, which would be recouped by MLB once the rights fees were settled.  That right there says that MLB agrees with the Lerners, otherwise they wouldn't be trying to keep the Nats happy. 

Offline PowerBoater69

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They aren’t looking for operating profits, they’re looking for fair market value.

They are currently getting a share of operating profits, which will be reduced if the fees increase by $20 million a year, so they don't get $20 more per year. The profits aren't $20 million, but MLB basically ruled that almost all profits should be paid out as fees, so it is not a negligible number. MLB awarded the Nats the highest amount in fees that it could without bankrupting MASN (not a free market decision). MLB takes a third of the rights fees but none of the profits, which is another big chunk out of the $20 million per year.

They are in court over what mlb determined to be fair value, not what the Nats asked for and definitely not a fair market price.

Offline PowerBoater69

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The case was/is about the undervaluation in past years, like before 2014.  The undervaluation is far worse now, and the few percentage points in MASN equity the Nats gain every year isn't coming close to making them whole.  I thought that MLB was paying the Nats something like $20 million a year, for several years at least, which would be recouped by MLB once the rights fees were settled.  That right there says that MLB agrees with the Lerners, otherwise they wouldn't be trying to keep the Nats happy. 

The case is over the fees for the fees from 2012-2016. The $25 million was a one time loan that MLB probably regrets because it is hard to claim they are impartial when they are making large payments to the Nats.

Offline HalfSmokes

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They are currently getting a share of operating profits, which will be reduced if the fees increase by $20 million a year, so they don't get $20 more per year.

They are in court over what mlb determined to be fair value, not what the Nats asked for and definitely not a fair market price.

If the arbitration is upheld, or goes forward with a similar number, they will end up with a decent amount of money regardless. Likewise, they are going to go though the same hoops every reset period because the Os and MLB agreed to an ambiguous contract.

Offline PowerBoater69

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If the arbitration is upheld, or goes forward with a similar number, they will end up with a decent amount of money regardless. Likewise, they are going to go though the same hoops every reset period because the Os and MLB agreed to an ambiguous contract.

$100 million, take away a third going to MLB profit sharing, subtract at least a couple million per year in lost share of MASN profits, subtract the $25 million already received from MLB. About $30 million gross before taxes coming to the Lerners if they win.

The bigger issue is the precident to be set for the 2017 reset. In 2012 the Nats had zero ratings, now they have a better case to get a bigger increase. I think they might be better off if they lose the right to use the MLB panel because a truly independent arbitration would not prioritize keeping MASN solvent.

Offline HalfSmokes

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I don't think ratings matter at all. The deals you can point to for fair market value have little to nothing to do with ratings; it's much more about market size and carriage fees. MASN has botched their deals, but that shouldn't matter to the nats

Offline PowerBoater69

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I don't think ratings matter at all. The deals you can point to for fair market value have little to nothing to do with ratings; it's much more about market size and carriage fees. MASN has botched their deals, but that shouldn't matter to the nats

I'm pretty sure that the ratings were referenced in the court docs. They are indirectly linked to the rights fees because MASN can get more from COX if the ratings are higher. You are correct that MASN has done a bad job of maximizing revenue, this was referenced in the MLB ruling, the MLB panel found that MASN should have done better negotiating with the cable providers and better bringing in ad revenue for programs other than the Nats and Os games.

Offline HalfSmokes

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ad revenue seems to be almost immaterial. No team in baseball really gets huge ratings, but if you can make every cable subscriber in multiple states pay $5 a month, you have a very profitable business

Offline PowerBoater69

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A couple other interesting factors.

The Lerners get 1% increased equity per year. I believe that this was part of the original price for the team, not something they buy every year. MASN is worth at least a quarter billion, so 1% per year is a pretty big gain on top of fees and profits.

Angelos is hurting his own bottom line by fighting with the Lerners. They would both be better off with higher operating profits and lower fees, avoiding the 33% cut that MLB takes in fees. By fighting over fees they both lose.

Offline PowerBoater69

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ad revenue seems to be almost immaterial. No team in baseball really gets huge ratings, but if you can make every cable subscriber in multiple states pay $5 a month, you have a very profitable business

They have two channels going 24/7/365, put on some shows and compete with NBC Sports. There is no effort to make any money off non baseball programming.

Offline HalfSmokes

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They have two channels going 24/7/365, put on some shows and compete with NBC Sports. There is no effort to make any money off non baseball programming.

production costs for anything probably outweigh the ratings they would get. might was well just go with infomercials. The only RSNs that I've seen do it well are NESN and YES. I have no faith MASN could pull off anything remotely similar

Offline PowerBoater69

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production costs for anything probably outweigh the ratings they would get. might was well just go with infomercials. The only RSNs that I've seen do it well are NESN and YES. I have no faith MASN could pull off anything remotely similar

I'm not sure what they could do, but MASN was told by the MLB panel that they are not maximizing revenues.

Offline HalfSmokes

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I'm not sure what they could do, but MASN was told by the MLB panel that they are not maximizing revenues.

sell their assets and dissolve. The nats and Os are probably worth more separately than together since the holders could get separate carriage fees for each team that way. Short of that, they could find a way to allow streaming, they are literally the only two mlb teams that can't be legally streamed locally 

Offline catocony

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The Nats are worth more seperately.  The Orioles, probably not, especially since they're back in the bottom of the standings.  The Nats made out okay when they stank, in fact, the MASN deal was probably a net positive.  Since 2012, they've taken a hit.  I don't think any team is going to get a deal like the Dodgers got with Time Warner, but the Nats would clear an additional $10-15 million as a minimum on a deal with FSN or NBCSN. 

Offline GburgNatsFan

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The Nats are worth more seperately.  The Orioles, probably not, especially since they're back in the bottom of the standings.  The Nats made out okay when they stank, in fact, the MASN deal was probably a net positive.  Since 2012, they've taken a hit.  I don't think any team is going to get a deal like the Dodgers got with Time Warner, but the Nats would clear an additional $10-15 million as a minimum on a deal with FSN or NBCSN.

Not questioning your analysis, I'm just wondering what data your basing this on.  I've always read that Baltimore has many more TV viewers that the Nats do.

Offline MarquisDeSade

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These are the same tired arguments and speculation from six years ago.

Offline HalfSmokes

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These are the same tired arguments and speculation from six years ago.

The deal is opened- generations of fans will be rehashing the same arguments

Offline MarquisDeSade

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The deal is opened- generations of fans will be rehashing the same arguments

Did the Nats get “fair market value” with interest?  Did anyone leak the details?  Right now it sounds like the answer to both questions is no.