Author Topic: WP: Nats MASN deal renegotations will have a huge impact  (Read 103939 times)

0 Members and 1 Guest are viewing this topic.

Offline HalfSmokes

  • Posts: 19558
If the article is legitimate,

Quote
Cable industry sources say that MASN's area TV sports rival, Comcast SportsNet, which is owned by the recently combined Comcast-NBCUniversal media giant, would be willing to pay the Nationals close to their requested $110 million per year in rights fees.

there's your proof of fair market

Offline Nats113437

  • Posts: 249
If the article is legitimate,

there's your proof of fair market

That was my thinking.  Can the Nats get this in writing and use it in the arbitration?  Any lawyers around?

Offline aspenbubba

  • Posts: 4187
If the article is legitimate,

there's your proof of fair market

If this is the real deal after 4 years the Lerners will have recouped their total investment in the purchase OF THE FRanchise. That is besides income from advertising ( which I think they would get a portion as an incentive to field a good teAM , ATTENDaNCE , BALL PARK ADVERTISING , INCOME FROM RADIO , YET TO BE PURCHASED NAMING RIGHTS, MERCHANDISE SALES , FOOD AND BEVERAGE SALES AT THE STADIUM and other revenue streams. I think this is what is called a cash cow. Sorry about the caps.

Offline Coladar

  • Posts: 2826
If this is the real deal after 4 years the Lerners will have recouped their total investment in the purchase OF THE FRanchise. That is besides income from advertising ( which I think they would get a portion as an incentive to field a good teAM , ATTENDaNCE , BALL PARK ADVERTISING , INCOME FROM RADIO , YET TO BE PURCHASED NAMING RIGHTS, MERCHANDISE SALES , FOOD AND BEVERAGE SALES AT THE STADIUM and other revenue streams. I think this is what is called a cash cow. Sorry about the caps.

They better *never* sell naming rights. Damn it, we've gone eight seasons without, mercifully, some dumb ass company name, five at Nats Park. At this point, it is Nationals Park, period. Screw selling the naming rights. That always works out super any way. Jiffy Lubed Up Pavillion, anyone? I guess you need some lube for the arse ramming you get trying to get out of the parking lot.

But yeah, naming rights? No thanks. Far classier to be Nats Park, and they usually only get $3-4 mil per season, so no way is that worth losing the prestige of National's Park. Although maybe if we ram it up Angelos with this deal, he'll buy the naming rights. Then we can have either Angelos Park or Orioles Park at Anacostia Yards.



Offline amanuel

  • Posts: 436
  • what the hell is going on out there?
    • RBSL
They better *never* sell naming rights. Damn it, we've gone eight seasons without, mercifully, some dumb ass company name, five at Nats Park. At this point, it is Nationals Park, period. Screw selling the naming rights. That always works out super any way. Jiffy Lubed Up Pavillion, anyone? I guess you need some lube for the arse ramming you get trying to get out of the parking lot.

But yeah, naming rights? No thanks. Far classier to be Nats Park, and they usually only get $3-4 mil per season, so no way is that worth losing the prestige of National's Park.




Ohhh this post is full of win! Totally agree and most of the time these agreements have a contract that last 10-20 years :?


Offline Nats113437

  • Posts: 249
Agreed on the naming rights.  It would have to be huge money if it were me.

I hope the Nats can get an affidavit from CSN and a potential Fox Sports DC claiming they'd bid $100 million+

Offline Coladar

  • Posts: 2826
Agreed on the naming rights.  It would have to be huge money if it were me.

I hope the Nats can get an affidavit from CSN and a potential Fox Sports DC claiming they'd bid $100 million+

Yeah, I'd get it if it were $10-15 mil per season. But $3-4 mil, which is what I remember being thrown about when it was rumored during the RFK era, is a pittance compared to everything else in an MLB club financial wise.

And as amanuel mentioned, they usually are deals for decades. I'm sorry, but I don't think it's worth $45 mil for a couple decades of naming the park. Granted, that's $45 mil of free money, but there's something to be said for not having a commercial name. Verizon Center actually flows nicely, but like I mentioned, Jiffy Lubed Up Pavillion is another example. As rich as the Lerner's are, and as little as $3 mil is for an MLB team annually, it's just not worth it compared with the prestige of National's Park. That sounds right, we've had half a decade to get used to it, and it would be a way Angelos gets over on us, with the O's having kept the naming rights. Nationals Park it is, and Nationals Park it shall always be. In the history of baseball in DC, we have never once played in a commercially named park in over a century, let's not start now. /end rant and off topic diatribe.

Offline Tyler Durden

  • Posts: 7970
  • Leprechaun
Putting food on dinner tables is not an issue.  Power is the issue.  The Lerners don't need any money.  It's about getting the best possible deal for your business.

If that is the downside, bring it on.  Justice is worth no All-Star game, which we aren't getting anytime soon.

My impression is that everyone will want to side with the Nats on this.  It just makes too much sense for everyone other than Peter Angelos to get the Nats what they deserve.

You've made lots of good points and I agree with you on what would be fair to the Nats.  I don't think the ultimate outcome, however, will be fair to the Nats.  I think the 'three team aribtration panel' or whatever they are calling it will come with something that offers some value to both owners and that they think is 'good for baseball' (basically something that would avoid lawsuits).

Offline Tyler Durden

  • Posts: 7970
  • Leprechaun
I bet the naming rights are already as good as sold as soon as the market for the rights reaches whatever threshold they deem acceptable.  Whether that's 3 mil or 10 mil or 30 mil I don't know.

Offline Nats113437

  • Posts: 249
You've made lots of good points and I agree with you on what would be fair to the Nats.  I don't think the ultimate outcome, however, will be fair to the Nats.  I think the 'three team aribtration panel' or whatever they are calling it will come with something that offers some value to both owners and that they think is 'good for baseball' (basically something that would avoid lawsuits).

You could be right.  I just can't get over the fact that everyone benefits from the Nats getting more money, and it seems everyone really hates Angelos. 

Offline OldChelsea

  • Posts: 7564
  • From the best seat in the house at Nationals Park
I bet the naming rights are already as good as sold as soon as the market for the rights reaches whatever threshold they deem acceptable.  Whether that's 3 mil or 10 mil or 30 mil I don't know.

Don't you remember? It's going to be ExxonMobil Stadium (or Park or whatever) - or at least that's what those demonstrators in Half street back in 2008 and 2009 kept telling us.

Offline Kevrock

  • Posts: 12504
  • Troll So Hard University
I bet the naming rights are already as good as sold as soon as the market for the rights reaches whatever threshold they deem acceptable.  Whether that's 3 mil or 10 mil or 30 mil I don't know.

Of course.

I'm just relieved that it's been Nats Park for so long that all the long-time fans will always call it that, even when it's official name is some corporate monstrosity.

Offline tomterp

  • Global Moderator
  • ****
  • Posts: 33141
  • Hell yes!
The deal says the Nats have to be paid fair market value.  The ability of MASN to pay it has nothing to do with it.  If the arbitration panel rules the fair market value is $100 million, then that's what has to be paid.  The decision can not be based on other factors.  If it is, the Lerners will sue and win big.

If MASN is already extracting maximum $ from the markets, then fair market value is going to be some portion of that pie.  It's just like if you are looking to buy a building that already is under lease for the next 10 years, you are acquiring the lease stream as opposed to some esoteric appraiser's estimate of what the building ought to be worth.  The income stream determines the value.

Offline tomterp

  • Global Moderator
  • ****
  • Posts: 33141
  • Hell yes!
Don't you remember? It's going to be ExxonMobil Stadium (or Park or whatever) - or at least that's what those demonstrators in Half street back in 2008 and 2009 kept telling us.

Not any more, since ExxonMobil is relocating its headquarters to Houston.

Offline HalfSmokes

  • Posts: 19558
If MASN is already extracting maximum $ from the markets, then fair market value is going to be some portion of that pie.  It's just like if you are looking to buy a building that already is under lease for the next 10 years, you are acquiring the lease stream as opposed to some esoteric appraiser's estimate of what the building ought to be worth.  The income stream determines the value.

that's one way to look at it, another is that fair market value is what a buyer in a free market is willing to offer, in this case, supposedly, CSN and $100 million. The fact that MASN is locked in at less than fair market doesn't change that.

Offline OldChelsea

  • Posts: 7564
  • From the best seat in the house at Nationals Park
Not any more, since ExxonMobil is relocating its headquarters to Houston.

A company doesn't have to be based in a city for a sports facility in that city to hold naming rights from that company: Verizon and FedEx, for instance, are based in NYC and Memphis respectively (and there's another Verizon-named arena in Manchester, NH).

Offline Nats113437

  • Posts: 249
If MASN is already extracting maximum $ from the markets, then fair market value is going to be some portion of that pie.  It's just like if you are looking to buy a building that already is under lease for the next 10 years, you are acquiring the lease stream as opposed to some esoteric appraiser's estimate of what the building ought to be worth.  The income stream determines the value.

Wrong.  The value is determined by the market for TV rights.  In your scenario, it would equivalent to having a clause where the lease can be re-negotiated every five years.  If it were as simple as you suggest, there wouldn't be a need for arbitration, and the type of money being discussed wouldn't be at these levels.  It is clearly in the clause that the Nats are to be paid at market value of what their rights would get them on the open market.  If MASN is unable to meet that it's on them.

Offline tomterp

  • Global Moderator
  • ****
  • Posts: 33141
  • Hell yes!
A company doesn't have to be based in a city for a sports facility in that city to hold naming rights from that company: Verizon and FedEx, for instance, are based in NYC and Memphis respectively (and there's another Verizon-named arena in Manchester, NH).

Good point, it's certainly possible, but I believe that ExxonMobil's sponsorship in some giveaways was driven at least in part in their desire to contribute to the community where so many of their employees reside. 

Offline JCA-CrystalCity

  • Global Moderator
  • ****
  • Posts: 25458
  • Platoon - not just a movie, a baseball obsession
OC-
Quote
A company doesn't have to be based in a city for a sports facility in that city to hold naming rights from that company: Verizon and FedEx, for instance, are based in NYC and Memphis respectively (and there's another Verizon-named arena in Manchester, NH).
Not only that, but Verizon bought naming rights to a bridge - the Verizon Narrows Bridge . . .  but that's in new york.

Offline tomterp

  • Global Moderator
  • ****
  • Posts: 33141
  • Hell yes!
Wrong.  The value is determined by the market for TV rights.  In your scenario, it would equivalent to having a clause where the lease can be re-negotiated every five years.  If it were as simple as you suggest, there wouldn't be a need for arbitration, and the type of money being discussed wouldn't be at these levels.  It is clearly in the clause that the Nats are to be paid at market value of what their rights would get them on the open market.  If MASN is unable to meet that it's on them.

I am saying the market value is determined based on the future cash flow.  Given that MASN has already apparently locked up cable providers to long term deals, those cash flows may well be readily determinable.  If you have another method for determining the market value let's hear it.

Offline tomterp

  • Global Moderator
  • ****
  • Posts: 33141
  • Hell yes!
OC- Not only that, but Verizon bought naming rights to a bridge - the Verizon Narrows Bridge . . .  but that's in new york.

 :rimshot:

Offline OldChelsea

  • Posts: 7564
  • From the best seat in the house at Nationals Park
OC- Not only that, but Verizon bought naming rights to a bridge - the Verizon Narrows Bridge . . .  but that's in new york.

...and what about those 'Bay Bridges' in Chesapeake Bay, SF/Oakland and elsewhere, named for The Bay (properly Hudson's Bay Company), Canada's largest homegrown department store chain (and historically much else besides)?

Offline Nats113437

  • Posts: 249
I am saying the market value is determined based on the future cash flow.  Given that MASN has already apparently locked up cable providers to long term deals, those cash flows may well be readily determinable.  If you have another method for determining the market value let's hear it.

I just posted it.  The market value is determined based on what other MLB teams in similar sized markets receive(read the articles).  Also, there are things like advertising revenue to consider.  If the cash flows from MASN cable subscriptions were all this was based on, it wouldn't be this contentious.  That would be easy to calculate.  MASN subscription rates aren't even fully relevant since CSN has a broader range and could own the rights.

Offline HalfSmokes

  • Posts: 19558
I am saying the market value is determined based on the future cash flow.  Given that MASN has already apparently locked up cable providers to long term deals, those cash flows may well be readily determinable.

That's like saying the high bidder for a contract should still get it because it's not their fault they're locked into terrible deals with their subs

Quote
If you have another method for determining the market value let's hear it.

recent deals by teams in comparable media markets (the rangers seem very relevant here)
if CSN really is prepared to offer $100 million, give MASN right of first refusal and let the nats shop around

Offline Count Walewski

  • Posts: 1920
I have nothing against corporate sponsorship of baseball stadiums. I would cheer for the Washington Nick's Sausage Ham Fighters if it meant a nicer park or a larger payroll.