WP: Nats MASN deal renegotations will have a huge impact

[IanRubbish]

Baltimore needs our $, they're only drawing 25k a game, 7k less than we are in spite of a strong team.  Plus the fans there have no pride, they don't care if their team has to be propped up by fans of another team from another city.

[HalfSmokes]

http://www.forbes.com/sites/chrissmith/2013/05/22/meet-the-rights-fees-responsible-for-espns-layoffs/

good read if anyone thinks these rights fees are sustainable going forward.

[tomterp]

http://www.forbes.com/sites/chrissmith/2013/05/22/meet-the-rights-fees-responsible-for-espns-layoffs/

good read if anyone thinks these rights fees are sustainable going forward.

They're completely not sustainable.  Nats need to max out the deal while times are good.

[PowerBoater69]

They're completely not sustainable.  Nats need to max out the deal while times are good.

Might be too late.  I wonder how the ratings are doing this year, all those ugly blow-outs can't be helping.

[JCA-CrystalCity]

Might be too late.  I wonder how the ratings are doing this year, all those ugly blow-outs can't be helping.

It's not rights fees, but I think last week I saw they have ahd the biggest increase in average home game attendance so far this year.  It should not get hurt by Philly advance sale and the Os.

http://www.baseball-reference.com/leagues/current_attendance.shtml

[PowerBoater69]

It's not rights fees, but I think last week I saw they have ahd the biggest increase in average home game attendance so far this year.  It should not get hurt by Philly advance sale and the Os.

That's based on the increased number of season ticket sales, many of which were sold last September, so not a great indicator of how the TV ratings are doing.

[maxcat07]

I dunno...I'm a fan, and I still watch all of the games.

[OldChelsea]

I wouldn't be an authoritative sampling of the fandom as far as telly ratings - full season ticket holder, and the matches I don't get out to in person I listen to on the radio. My telly at home has never been tuned to MASN - I couldn't even tell anyone what channel it is.

Maybe if Arbitron came calling....

[PowerBoater69]

Below is the latest on MLB's attempt to resolve the MASN dispute:

My take is that MASN is for sale, the refusal to negotiate is just a tactic to drive up the price.  Otherwise they'd want to build it up like any other network and try to bring in the ratings via original programming, instead, large portions of their schedule are just simulcasts of ESPN2 and out of state college games.

Hopefully Fox can win the bidding and take over for 2014, they do a better job of sports coverage than any of the other networks.  Also, freak NBC.

MLB talks with NBC Sports Group, Fox Sports regarding MASN solution

The Washington Nationals and MASN are in a dispute over rights fees.
 
John Ourand, SportsBusiness Journal

Major League Baseball has had talks with NBC Sports Group and Fox Sports in recent weeks to try to craft a solution to its MASN dispute, according to several sources.

MLB hired Steve Greenberg of Allen & Co. to try to broker such a deal, which could see NBC or Fox acquire all or part of the regional sports network that carries Baltimore Orioles and Washington Nationals games.

Though talks with Fox and NBC have occurred in recent weeks, it’s hard to tell how receptive Orioles owner Peter Angelos is to cutting a deal. Angelos, who also owns the majority of MASN, has final say on a deal and so far has been unwilling to entertain offers. When contacted last week, the Orioles had no comment.

MLB had reached out to both NBC and Fox several months ago about MASN, but those talks did not progress and talks were believed to be dead.

The dispute over how high the Nationals’ rights fees should be has been in front of MLB for more than a year. The Nationals believe they should be paid as much as $120 million a year given recent Fox Sports Net deals with the Rangers (20 years, $3 billion) and Padres (20 years, $1.2 billion).

MASN has countered with a $35 million-a-year offer that represents a 20 percent jump from the Nationals’ current rights fee of $29 million. MASN’s contract contains a “parity clause” that requires the Orioles to receive exactly as much in rights fees as the Nationals.

Neither MASN nor the Nationals have been willing to budge from their position, leaving MLB to try to figure out a solution. MLB hired noted dealmaker Greenberg late last year to see whether he could help work out an agreement.

NBC Sports Group obviously is interested. It already operates a regional sports network in the area — Comcast SportsNet Mid-Atlantic — that carries the NBA’s Wizards and NHL’s Capitals. On occasion, CSN splits its feed, offering one for Washington, D.C., and a separate one for Baltimore.

Fox Sports Net also is interested. In the past year, it bought all or part of the RSNs covering the Cleveland Indians and New York Yankees. Fox would not shy away from an RSN that covers a major media market like Baltimore and Washington, D.C.

So far, talks have looked at the possibility of buying MASN2 from the Orioles and establishing a Washington-based channel with Nationals games. Talks also have looked at buying the whole RSN, which would include the Orioles.

The Nationals hold a 13 percent equity stake in MASN, adding 1 percentage point annually until it peaks at 33 percent. Angelos owns the rest.

http://www.bizjournals.com/baltimore/news/2013/06/03/mlb-talks-with-nbc-sports-group-fox.html?s=print

[comish4lif]

Below is the latest on MLB's attempt to resolve the MASN dispute:

My take is that MASN is for sale, the refusal to negotiate is just a tactic to drive up the price.  Otherwise they'd want to build it up like any other network and try to bring in the ratings via original programming, instead, large portions of their schedule are just simulcasts of ESPN2 and out of state college games.

Hopefully Fox can win the bidding and take over for 2014, they do a better job of sports coverage than any of the other networks.  Also, freak NBC.

http://www.bizjournals.com/baltimore/news/2013/06/03/mlb-talks-with-nbc-sports-group-fox.html?s=print

This is the best news in months, I'd love for the Nats part of MASN to get sold/spin off and the Orioles to get stuck trying to figure out how to run and build their own RSN.

[HalfSmokes]

I wonder what value MASN has if the buyer has to turn around and pay the Nats fair market value (plus fair market for the previous year that they've been playing with no deal)?

[nfotiu]

Below is the latest on MLB's attempt to resolve the MASN dispute:

My take is that MASN is for sale, the refusal to negotiate is just a tactic to drive up the price.  Otherwise they'd want to build it up like any other network and try to bring in the ratings via original programming, instead, large portions of their schedule are just simulcasts of ESPN2 and out of state college games.

Hopefully Fox can win the bidding and take over for 2014, they do a better job of sports coverage than any of the other networks.  Also, freak NBC.

http://www.bizjournals.com/baltimore/news/2013/06/03/mlb-talks-with-nbc-sports-group-fox.html?s=print

I think that is a pretty big leap in logic.  Ratings are irrelevant to RSNs as they make all their money in rights fees.   Paying money for some original programming just wouldn't add any significant value. 

And who would want to buy MASN?  It is probably of more value to the 2 teams than any potential buyer.  Fox and NBC/Comcast would only be interested in the rights.

Also, all those hoping that the Nats split their coverage off, should be careful what they wish for.  We could end up with a whole slew of carriage disputes that might leave a lot of regions without Nats coverage, and we'd still be blacked on extra innings and At Bat.  Without the combined leverage of two teams, I'm sure some cable companies will balk at paying a new Fox RSN $3-4 a subscriber if the Nats are the only team they are carrying. 

[TigerFan]

I think that is a pretty big leap in logic.  Ratings are irrelevant to RSNs as they make all their money in rights fees.   Paying money for some original programming just wouldn't add any significant value. 

And who would want to buy MASN?  It is probably of more value to the 2 teams than any potential buyer.  Fox and NBC/Comcast would only be interested in the rights.

Also, all those hoping that the Nats split their coverage off, should be careful what they wish for.  We could end up with a whole slew of carriage disputes that might leave a lot of regions without Nats coverage, and we'd still be blacked on extra innings and At Bat.  Without the combined leverage of two teams, I'm sure some cable companies will balk at paying a new Fox RSN $3-4 a subscriber if the Nats are the only team they are carrying.

I don't know much about these things but it seems like Comcast should want to add the Nats to their current Wiz and Caps lineup. 

[PC]

I don't know much about these things but it seems like Comcast should want to add the Nats to their current Wiz and Caps lineup. 

Comcast Sports Net would love to get the Nationals.

[PowerBoater69]

I think that is a pretty big leap in logic.  Ratings are irrelevant to RSNs as they make all their money in rights fees.   Paying money for some original programming just wouldn't add any significant value. 

The last part there was my point, original programming does not add resale value, which is why MASN is so lacking in that area.  As far as ratings being irrelevant, I disagree, sure the RSN makes the bulk of it's profits from cable fees, but like any business they are looking to maximize profits and original programming would bring in more ad money, except that the start up costs are only worth it if they are planning on staying around long term.

It would be nice to see more Nats programming, Nats Talk is a radio show done with cameras.  Give Alexandria a show and let her do puff pieces on the players, the wacky fans, and the charity events that the team is always doing, not that this would bring in huge ratings but it would be better than ESPN2 simulcasts.  Hell, there are about 100 bloggers, pod casters, and internet radio guys that would practically work for free to get on TV.

And who would want to buy MASN?  It is probably of more value to the 2 teams than any potential buyer.  Fox and NBC/Comcast would only be interested in the rights.

I'm sure that MLB and the networks have a clear idea of what they are and are not interested in buying.  But that is an interesting question of what would happen to MASN's assets.  Certainly the broadcast rights are the big dollar item, Angelos owns the rights to the Nats broadcast rights, would he lose that ownership stake as part of this deal?  A one time payoff or would he continue to receive a share even if the Nats were allowed to shop for the best deal?

Also of value is the channel spots on all of the cable and satellite providers.  It took years for MASN to get two SD and two HD spots on all of the local channel line-ups, Fox in particular would likely be interested in maintaining those agreements.

Beyond that, MASN has all of the hardware it takes to broadcast two games at a time, the new network would need all of that same equipment.

Also, all those hoping that the Nats split their coverage off, should be careful what they wish for.  We could end up with a whole slew of carriage disputes that might leave a lot of regions without Nats coverage, and we'd still be blacked on extra innings and At Bat.  Without the combined leverage of two teams, I'm sure some cable companies will balk at paying a new Fox RSN $3-4 a subscriber if the Nats are the only team they are carrying. 

Beyond a straight cash payoff, that is the biggest sticking point in this whole deal, the Nats don't care if they are pulled off the air (or wire) in Baltimore and the surrounding counties, but Angelos has no interest in losing DC and Northern Virginia, he has a fan base hear that will certainly drop if access to watch the team is limited.  Beyond the immediate area, would the rest of Virginia and NC be zoned just for the Nats?  This might help get the team into some areas willing to pay $2 for one team rather than $4 for two.

[OldChelsea]

If it doesn't involve (1) separating the Nats and Orioles telly rights and (2) getting Angelos out of the picture, it's no good.

[HalfSmokes]

Beyond a straight cash payoff, that is the biggest sticking point in this whole deal, the Nats don't care if they are pulled off the air (or wire) in Baltimore and the surrounding counties, but Angelos has no interest in losing DC and Northern Virginia, he has a fan base hear that will certainly drop if access to watch the team is limited.  Beyond the immediate area, would the rest of Virginia and NC be zoned just for the Nats?  This might help get the team into some areas willing to pay $2 for one team rather than $4 for two.

you can have overlapping markets and separate media outlets (Mets and Yankees, cubs and white sox, angels and dodgers), the question is whether or not the cable companies would look for an excuse to drop another expensive RSN that no one watches

[PebbleBall]

Fox and NBC/Comcast would only be interested in the rights.

Fox doesn't have an RSN in DC and are apparently interested in one, so that's their motivation. 

I don't think Angelos would accept anything that would endanger the Orioles broadcasts in the immediate DC area.  This, I assume, would be an immediate deal-breaker for him:

On occasion, CSN splits its feed, offering one for Washington, D.C., and a separate one for Baltimore.

[HalfSmokes]

Fox doesn't have an RSN in DC and are apparently interested in one, so that's their motivation. 

I don't think Angelos would accept anything that would endanger the Orioles broadcasts in the immediate DC area.  This, I assume, would be an immediate deal-breaker for him:

if it's not a split feed, I don't see how it would benefit the Nats unless they changed the deal so that the Os didn't get the same compensation. If it is a split feed, cable companies will be lining up to drop one or the other

[OldChelsea]

you can have overlapping markets[...]

This is something that the boosters of 'Baltimore/Washington' or 'Washington/Baltimore' fail to realise - Washington and Baltimore are not a single metropolitan area based on two interdependent central cities like Minneapolis/St Paul...they are two metro areas that overlap (Howard county, parts of MoCo/PG etc).

[in 36 years' residency in this area I have passed through on trains but have never actually set foot in Baltimore, and have no plans to do so]

[jhuterp]

I don't care if the Nats/Orioles share territory or even a network.  The important issue here is that the Nats earn compensation for their TV rights that is commensurate w/a top 10 market.  The current offer from MASN does not meet that criteria based on the rights fees recently negotiated by other teams.

[nfotiu]

I don't care if the Nats/Orioles share territory or even a network.  The important issue here is that the Nats earn compensation for their TV rights that is commensurate w/a top 10 market.  The current offer from MASN does not meet that criteria based on the rights fees recently negotiated by other teams.

As a fan, I care most about being able to get the Nats games on TV where I live.  Fox starting up a new channel would endanger that for a lot of us, and would probably hurt the Nats in the long run even if they are getting rich off of it at first. 

The other thing to consider, is this money is all just a bubble, and this RSN scheme will all come crashing down one day.  Probably in about 5 years or so when cord cutting becomes a reality and/or a la carte becomes a reality.  At that point the Nats are going to have to settle for what is commensurate for a team that averages (less than 50,000?) viewers per game.  That number is significantly less than they are making now. 

Signing something very long term with CSN is probably the best case scenario, as they are more likely to survive the eventual bubble burst and can leverage their other sports properties and the fact they are owned by a cable company..  A new Fox channel or MASN for that matter may not survive 5-10 years.

[ZimW1N]

As a fan, I care most about being able to get the Nats games on TV where I live.  Fox starting up a new channel would endanger that for a lot of us, and would probably hurt the Nats in the long run even if they are getting rich off of it at first. 

The other thing to consider, is this money is all just a bubble, and this RSN scheme will all come crashing down one day.  Probably in about 5 years or so when cord cutting becomes a reality and/or a la carte becomes a reality.  At that point the Nats are going to have to settle for what is commensurate for a team that averages (less than 50,000?) viewers per game.  That number is significantly less than they are making now. 

Signing something very long term with CSN is probably the best case scenario, as they are more likely to survive the eventual bubble burst and can leverage their other sports properties and the fact they are owned by a cable company..  A new Fox channel or MASN for that matter may not survive 5-10 years.

I'm sorry but are you honestly suggesting that CSN has more staying power the FOX, which is the 4th biggest broadcasting company and the second biggest name in sports right now, because if that is the case you are mad.

[HalfSmokes]

As a fan, I care most about being able to get the Nats games on TV where I live.  Fox starting up a new channel would endanger that for a lot of us, and would probably hurt the Nats in the long run even if they are getting rich off of it at first. 

The other thing to consider, is this money is all just a bubble, and this RSN scheme will all come crashing down one day.  Probably in about 5 years or so when cord cutting becomes a reality and/or a la carte becomes a reality.  At that point the Nats are going to have to settle for what is commensurate for a team that averages (less than 50,000?) viewers per game.  That number is significantly less than they are making now. 

Signing something very long term with CSN is probably the best case scenario, as they are more likely to survive the eventual bubble burst and can leverage their other sports properties and the fact they are owned by a cable company..  A new Fox channel or MASN for that matter may not survive 5-10 years.

a lot of these new deals are long term (much longer than five years), so bubble popping or not, unless the RSNs go bankrupt, the teams will still get paid

[nfotiu]

I'm sorry but are you honestly suggesting that CSN has more staying power the FOX, which is the 4th biggest broadcasting company and the second biggest name in sports right now, because if that is the case you are mad.

Fox has no vertical integration.  CSN is owned by a cable company.  If Fox loses the ability to collect 3-4$/month from every subscriber in Nats territory, they will shut down their sports networks very quickly.  They can't pay $100 million plus contracts without that revenue.  Advertising revenue for the Nats wouldn't even cover their production costs.