WP: Nats MASN deal renegotations will have a huge impact

[BigMeech]

When does the Nationals' contract with MASN expire?  With the amount of marketable stars, they could probably fetch a fair amount from another network.

Or do MLB broadcast rights not work like that?

[tomterp]

When does the Nationals' contract with MASN expire? 

Never.

[HalfSmokes]

With the amount of marketable stars, they could probably fetch a fair amount from another network.

rating suck- all that matters is carriage fees. Even the Dodgers are trouble getting providers to carry their new RSN. The bubble is popping

[blue911]

I guess this means no more fancy sets and graphics.

[Ray D]

"I am deeply saddened by the fact that you have not been able to resolve amicably the pending broadcast rights dispute," wrote Selig

Deeply saddened?    You're deeply saddened when your best friend's grandmother dies.  Not being able to resolve a dispute amicably does not rise to the deeply saddened level.

[Traded For Mclain]

Clearly a win for the Nationals if Angelos is contesting the arbitration outcome.  Hopefully we're seeing the death spiral of MASN, if the Nats didn't have MLB in their corner before, they do now.  There's no way MLB is going to want to go through this every five years.  There will still be pressure on both the Nats and blO's to cut a deal, but clearly it's not one Angelos is going to like.  Hopefully the outcome is to make the blO's the small market team they deserve to be.

[skippy1999]

rating suck- all that matters is carriage fees. Even the Dodgers are trouble getting providers to carry their new RSN. The bubble is popping

I'd heard this before and it made me a little nervous, does that mean that team-specific stations will become a thing of the past?  Who will air all the games for each team then? 

[HalfSmokes]

I'd heard this before and it made me a little nervous, does that mean that team-specific stations will become a thing of the past?  Who will air all the games for each team then? 

if I had to guess, I think they eventually move to a sports tier or they become opt in (which would destroy baseball's business model). Right now they are on basic tiers in markets that are sometimes tangentially related to the team (MASN pushing to be in NC for instance) and they are very expensive- the Dodgers have a 25 year $8 billion with time warner that only makes sense for time warner if they can sell the station to other providers at $4 per subscriber per month increasing annually (making it one of the most expensive stations)

[PebbleBall]

Deeply saddened?    You're deeply saddened when your best friend's grandmother dies.  Not being able to resolve a dispute amicably does not rise to the deeply saddened level.

So The Nats and Orioles argue.  Bud Selig appoints a committee made up of MLB execs to arbitrate.  Selig's committee rules in favor of the Nationals.  Selig turns around and tells both teams they aren't playing fair? 

[Kevrock]

Force a sale of the Orioles, move them to Vegas.

Then when Bmore bids on the Marlins we can stick them under our television contact and see how they like it

[HalfSmokes]

Force a sale of the Orioles, move them to Vegas.

Then when Bmore bids on the Marlins we can stick them under our television contact and see how they like it

Angelos argues the market can't support two teams, selig thinks Montreal could use a team. Add A and B together and the simple solution seems to be moving the team in the less viable portion of the market (i.e. baltimore) to Montreal

[Kevrock]

All in favor?

[varoadking]

Angelos argues the market can't support two teams, selig thinks Montreal could use a team. Add A and B together and the simple solution seems to be moving the team in the less viable portion of the market (i.e. baltimore) to Montreal

Angelos means that his market can't support one team...

[CALSGR8]

The Nationals and Orioles dispute over TV money is about to explode | HardballTalk (via http://ble.ac/teamstream-) http://teamstre.am/1o9KtG1

[BigMeech]

Move Baltimore Orioles baseball to the WWE Network.

[Mathguy]

Legal action between Nats & Orioles heating up
http://www.washingtonpost.com/sports/nationals/in-debate-over-masn-rights-mlb-rules-for-washington-nationals-but-fight-continues/2014/07/29/65a3af4e-1774-11e4-9e3b-7f2f110c6265_story.html

[SkinsNDeacs]

“As those who follow the Clubs are aware, the Settlement Agreement between Baseball, the Orioles, and the Nationals established MASN to compensate the Orioles for the loss of market share and other damages caused by the relocation of the Nationals to Washington, D.C.” the Orioles said Tuesday in a statement. “Contracts are meant to be honored and the Orioles have every expectation that this contract will also be honored. The Orioles continue to work with the Office of the Commissioner to try and resolve this dispute.”

“MASN has honored the terms of the Settlement Agreement, including the formula in that contract for resetting the Nationals’ telecast rights fees and expects all parties will do the same,” Thomas J. Hall, the lawyer representing MASN, said in the statement. “That contract specifically includes an agreed upon and historically applied formula for resetting the Clubs’ telecast rights fees that has been applied by Baseball to virtually every other club-owned regional sports network.

http://www.washingtonpost.com/sports/nationals/in-debate-over-masn-rights-mlb-rules-for-washington-nationals-but-fight-continues/2014/07/29/65a3af4e-1774-11e4-9e3b-7f2f110c6265_story.html

Is there a set formula?  If so, why is there even a debate?

[HalfSmokes]

Is there a set formula?  If so, why is there even a debate?

because they don't agree that there is a formula

Beyond basic financial terms, the sides are nowhere near agreement on how the new rights fee ought be derived, according to industry sources. MASN, majority owned by the Orioles, argues the fee should be determined by a formula used for more than 15 years by MLB’s revenue sharing definitions committee. That formula takes into account factors such as local market size, geography, network revenue and expenses, and prior TV ratings to determine related-party broadcast rights fees for clubs that own equity in their television partners.

The formula was developed with the aid of league consultant Bortz Media & Sports Group Inc. of Colorado and has been used for clubs such as the Boston Red Sox and the New England Sports Network, the New York Yankees and YES Network, and the Toronto Blue Jays and Rogers SportsNet. Industry sources said the Orioles’ 2005 deal with MLB to allow the Montreal Expos to relocate to D.C. calls for the use of the same, established structure.

The Nationals, conversely, are pointing more to current open-market conditions for baseball rights, which have grown by unprecedented degrees in the last two years. The Texas Rangers, playing in a market smaller than the combined Washington-Baltimore TV footprint, hold a 20-year deal with Fox Sports Net worth $3 billion. The San Diego Padres, playing in a market less than half the size of Washington alone and fifth-smallest in baseball, recently signed a 20-year deal with FSN worth $1.2 billion.

http://www.bizjournals.com/washington/print-edition/2012/06/29/rights-fee-tv-formula-drive-masn.html?page=all

[NJ Ave]

Is there a set formula?  If so, why is there even a debate?

I believe the Nats would argue that the formula, which I think goes back a decade or so, does not take into account the current value of these kinds of deals. Apparently an arbitration board agreed with them.

If the bubble pops, it seems like that would be an arguable point for the Orioles to reset fees at a lower level in five years at the next reset period if all these teams have their contracts voided and less lucrative contracts instated.

[wj73]

Petey was too clever by half in the MASN deal when he negotiated the clause that required that whatever rights fees are given to the Nats, an equal amount must be given to the O's, whether or not the O's rights are worth that much.  MASN is now in a position where it apparently cannot afford to pay the Nats FMV to both teams.  But if a business negotiates a contract that they later cannot afford, then that business either tries to renegotiate, or declares bankruptcy.  Which is it going to be, Petey?

[nfotiu]

It seems like the obvious solution to keep everyone happy would be to just let the Nats go.  MASN can probably keep all their carriage deals with the cable companies by playing nice and offering a dollar off a month in carriage fees, and would still be raking it in.  Nats could probably get a nice tidy and more or less sustainable $80 million from CSN, which already has good coverage. 

[UMDNats]

[HalfSmokes]

It seems like the obvious solution to keep everyone happy would be to just let the Nats go.  MASN can probably keep all their carriage deals with the cable companies by playing nice and offering a dollar off a month in carriage fees, and would still be raking it in.  Nats could probably get a nice tidy and more or less sustainable $80 million from CSN, which already has good coverage. 

My guess is that cable companies would be ecstatic if given the opportunity to drop an RSN (my guess would be that they would argue dropping the Nats would constitute a material change) 

[nfotiu]

My guess is that cable companies would be ecstatic if given the opportunity to drop an RSN (my guess would be that they would argue dropping the Nats would constitute a material change) 

Comcast and Time warner are legally forced to carry it, I believe.  I doubt the other companies would care too much about dropping them.  Seems that in the current climate, most RSN deals are renewed.  It is just the negotiations for new, expensive channels that seem to hit road blocks. 

[HalfSmokes]

Comcast and Time warner are legally forced to carry it, I believe.  I doubt the other companies would care too much about dropping them.  Seems that in the current climate, most RSN deals are renewed.  It is just the negotiations for new, expensive channels that seem to hit road blocks. 

most RSNs aren't on a basic package, they're on a sports tier, that's what the baseball focused RSNs are fighting against. Besides time warner and comcast could argue that without the Nats, MASN is no longer local. RSNs are expensive and providers are just starting to take a stand against them, who knows how it plays out, but when your most expensive stations have some of your lowest ratings, there may be something that needs addressing