Will MLB force the Angelos family to sell the Nats TV rights to the Lerners?

[Natsinpwc]

Rubenstein isnt just going to give it up. MASN is paying out 400+ million as restitution for what the Nationals were supposed to get. Seems like its worth something to me.

He’s a smart guy. He will obviously want soemthing. 

[Five Banners]

He’s a smart guy. He will obviously want soemthing. 

If MLB is smart, they can say do this or risk disapproval.

[Natsinpwc]

If MLB is smart, they can say do this or risk disapproval.

We’ve had this discussion before. That seems extreme.  And a bluff. Why would they want to keep the Angelos family. 

[Five Banners]

We’ve had this discussion before. That seems extreme.  And a bluff. Why would they want to keep the Angelos family. 

 Of course, as this may be the most stable ownership this team could get in its current city without relocating, one would think they would move towards something to resolve this quickly.

[nfotiu]

Rubenstein isnt just going to give it up. MASN is paying out 400+ million as restitution for what the Nationals were supposed to get. Seems like its worth something to me.

I'm not following your logic here.   MASN tried their best not to pay that 400 million because it would make their ownership stake in MASN almost worthless (and obviously some personal vendetta motivation).

[nfotiu]

We’ve had this discussion before. That seems extreme.  And a bluff. Why would they want to keep the Angelos family. 

There's motivation for Rubenstein to tidy things up here without having to threaten him.   Set the rights fees for MASN to something sustainable for everyone, and establish a framework for streaming rights going forward, and the businesses can all start running effectively.

[Natsinpwc]

There's motivation for Rubenstein to tidy things up here without having to threaten him.   Set the rights fees for MASN to something sustainable for everyone, and establish a framework for streaming rights going forward, and the businesses can all start running effectively.

Also he is not getting into this to generate lots of revenue or profit.  Won’t want to lose money but he has many other sources. He will want to become an important part of the MLB club and I bet he has his eyes set on being a leader among the owners. 

[HalfSmokes]

There's motivation for Rubenstein to tidy things up here without having to threaten him.   Set the rights fees for MASN to something sustainable for everyone, and establish a framework for streaming rights going forward, and the businesses can all start running effectively.

I don’t think there is a number that is fair to the nats and sustainable. That’s the fundamental flaw with MASN. Comcast is not going to pay twice as much just because they have two teams, but MASN has to pay out under the assumption that they can get fair value for the nats and then they have to match that number for the Os.

[Slateman]

Lol, what? The Orioles own the rights to the majority of revenue. What do you mean, where is the value?

[nfotiu]

I don’t think there is a number that is fair to the nats and sustainable. That’s the fundamental flaw with MASN. Comcast is not going to pay twice as much just because they have two teams, but MASN has to pay out under the assumption that they can get fair value for the nats and then they have to match that number for the Os.

The open market value for the Nats is not great right now.  Monumental is the only game in town.   I don't even see them offering the current reset annual amount and certainly not more.  They can't monetize Nats rights for more than 50 or 60 million in this environment.   They had a bit of a different territory map, and would not have much confidence in significantly increasing their carriage fee or launching a new Nats RSN and getting enough carriage to justify more than 50-60 million.

A pretty obvious solution would be to peg it as a percentage of MASN revenue.   Say 35% to the Nats, 35% to the O's.   30% minus production and operational costs go to MASN ownership where they'll get a bit of income that is sheltered from revenue sharing.

[nfotiu]

Lol, what? The Orioles own the rights to the majority of revenue. What do you mean, where is the value?

They control the rights, but the mechanisms of the agreement killed any profit that the O's could receive.   How is that valuable to the O's?

[Slateman]

They control the rights, but the mechanisms of the agreement killed any profit that the O's could receive.   How is that valuable to the O's?

How does it kill profits?

[nfotiu]

How does it kill profits?

The last estimate I remember of MASN revenues was in the 150 million/year range.   That will be falling by at least 5%/year.   The current reset is paying both teams about 60 million.   That leaves 30 million/year to cover expenses, and maybe about 10 million a year in profit currently, that will be wiped out by another 5% subscriber loss next year.

They made some good money in their hay day when they had almost 6 million subscribers.  But now that they are at just over 3 million and falling, the profits are gone.

[Slateman]

The last estimate I remember of MASN revenues was in the 150 million/year range.   That will be falling by at least 5%/year.   The current reset is paying both teams about 60 million.   That leaves 30 million/year to cover expenses, and maybe about 10 million a year in profit currently, that will be wiped out by another 5% subscriber loss next year.

They made some good money in their hay day when they had almost 6 million subscribers.  But now that they are at just over 3 million and falling, the profits are gone.

The Nationals ownership is capped at 33%. The Orioles own at least 67% of the rights to Nats television in perpetuity. So if MASN's revenue is $150 million, that means the Orioles are getting 80 million after the 30 million for expenses you cited.

The Padres and the Pirates are the next closest teams in media market rankings to Baltimore. They're making 60 million each in revenue. So, the Orioles are making about 20 million more than they would without the Nationals here. There is simply no way in hell Rubenstein is going to just give that up without some pretty hefty compensation. Whenever the RSN dies, the Orioles will get 67% of whatever the "local" streaming cut is.

[Natsinpwc]

Revenue does not equal profit. 

[JCA-CrystalCity]

the broadcast rights fee goes to the Os and Nats out of MASN. It is a cost for MASN, not a revenue. I think the last reset had the Nats and Os each getting $60 million. That's $120 million in costs to MASN, before production costs. If their revenue is $150 million, that means that what is split I think right now 75/25 is  ($30 million less production and other operating costs). That can't be much.

[nfotiu]

the broadcast rights fee goes to the Os and Nats out of MASN. It is a cost for MASN, not a revenue. I think the last reset had the Nats and Os each getting $60 million. That's $120 million in costs to MASN, before production costs. If their revenue is $150 million, that means that what is split I think right now 75/25 is  ($30 million less production and other operating costs). That can't be much.

Yep.  I worded that clumsily, but that was what I was getting at.

There is no way to put the brakes on the curd cutting, so that revenue number is shrinking quickly.   With the Fox/ESPN announcement and ESPN going DTC in 2025, cord cutting will only accelerate.   

Streaming will never come close to replicating the money of the RSN golden age when 6 million people were paying $40-50 a year to not watch MASN.   There just isn't much there any more for the O's in the MASN framework.

[Slateman]

the broadcast rights fee goes to the Os and Nats out of MASN. It is a cost for MASN, not a revenue. I think the last reset had the Nats and Os each getting $60 million. That's $120 million in costs to MASN, before production costs. If their revenue is $150 million, that means that what is split I think right now 75/25 is  ($30 million less production and other operating costs). That can't be much.

75% of 120 million is 90 million. That is way more than any similar markets are getting.

There was no reset for beyond 2021. MASN was required to pay backpay to the Nats for 2017-2021.That was settled in December. The Orioles still own 75% of the Nats TV rights, and the least they will own os 67%.

[JCA-CrystalCity]

75% of 120 million is 90 million.

Accounting 101:

Total Revenues for MASN: $150 million

Less Costs:
$60 million to the Nats for broadcast rights (It'll be less than that for 2022-2026)
$60 million to the Os for broadcast rights
Other costs of operations ???

Profit - something less than $30 million ($150MM - $60MM - $60MM - ???)

Profit is what gets split 75/25. It might not even be a profit

The sweet part of the deal for the Os is getting the same rights fee as the Nats under the current arrangement. 75% of MASN's profits isn't that much. If I were Rubinstein, I might say "Fine, Ted, you guarantee the Os the same rights fee as the Nats, which we base on some formula (a bundle of comparable teams), and you can fold MASN into your network."

[PowerBoater69]

the broadcast rights fee goes to the Os and Nats out of MASN. It is a cost for MASN, not a revenue. I think the last reset had the Nats and Os each getting $60 million. That's $120 million in costs to MASN, before production costs. If their revenue is $150 million, that means that what is split I think right now 75/25 is  ($30 million less production and other operating costs). That can't be much.

The reset for 2017-2021 was an average of $70 year per year, peaking at $72 mil the final year, the lower average reported by the Post included the reduction for the shortened 2020 season. Should be interesting to see if the fees continue to increase with the 2022-2026 reset or if the cord cutting leads to a drop. I know the cable companies must like that MASN restricts streaming access to cable customers.

[Slateman]

Where does it say only the profits are being split? Because that would mean the Nationals recieved negative dollars for their rights over the last decade. And theres simply no way that doesnt leak in the press.

The Orioles a controlling interest in MASN, which holds the TV rights for both teams

[PowerBoater69]

$60 million to the Nats for broadcast rights (It'll be less than that for 2022-2026)
$60 million to the Os for broadcast rights

$60 would be a big drop. But also you can factor in that MLB gets 30% (33%?) of the rights fees, a nice big cut. The Nats also get profit sharing from MASN, of which they own 25%, not a ton of money but not nothing.

[HalfSmokes]

Where does it say only the profits are being split? Because that would mean the Nationals recieved negative dollars for their rights over the last decade. And theres simply no way that doesnt leak in the press.

The Orioles a controlling interest in MASN, which holds the TV rights for both teams

What are you talking about? The nats fees are set by arbitration. The Os get the same amount per the MASN deal. Anything left over after other expenses is profit. Once that arbitration number is set, it is not the Nats’ problem if the money isn’t there- MASN either pays it or goes bankrupt

[Natsinpwc]

MASN also has to pay taxes on any profits.  Federal and local.   That reduces anything that is shared. 

Of course if either of the team or MASN were transparent with their finances this all would be clearer to us.

[PowerBoater69]

MASN also has to pay taxes on any profits.  Federal and local.   That reduces anything that is shared. 

Of course if either of the team or MASN were transparent with their finances this all would be clearer to us.

The legal and accountant fees have the be the highest in MLB as well.