WP: Nats MASN deal renegotations will have a huge impact

[imref]

Yep, so it's about 100 million to the Nats.

Seems like they owed $296 million:

MASN paid the Nationals for 2012-16 what the Orioles proposed: $197.5 million. Washington argued it should be paid $475 million. A previous arbitration panel ruled that the Nationals were owed $298.1 million, but that decision was thrown out by a New York court after an appeal by the Orioles. The second panel ordered a slightly lower payment of $296.8 million.

[1995hoo]

If in fact the dispute finally ends, maybe MASN will finally be available for streaming. I don’t doubt one reason for Angelos’s intransigence on that issue is fear that data will show the Nats get streamed far more than Baltimore.

[PowerBoater69]

Seems like they owed $296 million:

MASN has been paying the Nats what they had originally proposed, so the difference over five years was $100 million. But MLB takes a third of that amount, so subtract a big chunk. Plus the Nats were getting profit sharing from MASN and those profits just evaporated, so take out another chunk. The windfall is much much less over the five year period than most fans would imagine. The bigger payoff is that the next five year reset starts at a much higher amount with the Nats having won round one.

[nfotiu]

MASN has been paying the Nats what they had originally proposed, so the difference over five years was $100 million. But MLB takes a third of that amount, so subtract a big chunk. Plus the Nats were getting profit sharing from MASN and those profits just evaporated, so take out another chunk. The windfall is much much less over the five year period than most fans would imagine. The bigger payoff is that the next five year reset starts at a much higher amount with the Nats having won round one.

There were a bunch of articles earlier this year saying MASN stopped paying the Nats any money at all.  There were also articles in previous years saying that MLB was paying Nats good faith money to cover the money they should be getting.   It seems like a big mess to figure out.

[PowerBoater69]

There were a bunch of articles earlier this year saying MASN stopped paying the Nats any money at all.  There were also articles in previous years saying that MLB was paying Nats good faith money to cover the money they should be getting.   It seems like a big mess to figure out.

MASN had stopped paying profit sharing, not rights fees, which makes sense considering that they were likely to lose the case and profits were about to disappear.

MLB gave the Nats a $25 million load while the case was in dispute, which the Nats later repaid. The Os argued that the loan was evidence of bias but that obviously was not enough to convince the judge.

Determining the difference in rights fees will be easy, sounds like the court will determine interest, figuring out the adjust profit sharing will be a mess.

[nfotiu]

MASN had stopped paying profit sharing, not rights fees, which makes sense considering that they were likely to lose the case and profits were about to disappear.

MLB gave the Nats a $25 million load while the case was in dispute, which the Nats later repaid. The Os argued that the loan was evidence of bias but that obviously was not enough to convince the judge.

Determining the difference in rights fees will be easy, sounds like the court will determine interest, figuring out the adjust profit sharing will be a mess.

This was one of the articles I remember saying they stopped paying any rights fees in 2018.
https://awfulannouncing.com/mlb/according-to-the-nationals-masn-hasnt-paid-them-a-rights-fee-in-nearly-a-year.html

[Slateman]

Still dont understand why we all care. $0 of that money will be invested in the team or the stadium.

[HalfSmokes]

Still dont understand why we all care. $0 of that money will be invested in the team or the stadium.

That’s the nats- just like the Marlins, fielding a no budget team

[Five Banners]

https://media.sportbusiness.com/news/washington-nationals-gain-decisive-legal-victory-in-long-running-masn-fight/

[hohoho]

https://media.sportbusiness.com/news/washington-nationals-gain-decisive-legal-victory-in-long-running-masn-fight/

Just more money for the old man to pass on to his heirs.

[JCA-CrystalCity]

https://media.sportbusiness.com/news/washington-nationals-gain-decisive-legal-victory-in-long-running-masn-fight/

so this article says $100MM additional over what has been paid.  From that, if PB is right, cut 1/3 to MLB, leaving $67MM.  From 2012 - 2106, the Nats share of MASN was < 20%.  Figure the Orioles rights fee matches the Nats, so that further reduces profit by another $100MM for the period.  I guess MASN owed an extra $200MM in fees to the clubs, so the restated earnings would be lowered by that amount. some of that now has a tax benefit, so figure the hit maybe is $150MM, of which the Nats "own" < $30MM.  Just a swag, but it sounds like they'll net $40MM.  Timing might help with Rendon

[PowerBoater69]

so this article says $100MM additional over what has been paid.  From that, if PB is right, cut 1/3 to MLB, leaving $67MM.  From 2012 - 2106, the Nats share of MASN was < 20%.  Figure the Orioles rights fee matches the Nats, so that further reduces profit by another $100MM for the period.  I guess MASN owed an extra $200MM in fees to the clubs, so the restated earnings would be lowered by that amount. some of that now has a tax benefit, so figure the hit maybe is $150MM, of which the Nats "own" < $30MM.  Just a swag, but it sounds like they'll net $40MM.  Timing might help with Rendon

34% of rights fees go to MLB and 0% of ownership profit sharing. So idiotic of the Nats and Os to send tens of millions more to MLB than necessary.

[Five Banners]

34% of rights fees go to MLB and 0% of ownership profit sharing. So idiotic of the Nats and Os to send tens of millions more to MLB than necessary.

You had a franchise in Baltimore whose only defined and legally enforceable rights related to relocation (Baltimore and the counties directly adjacent to it) and whose existence was granted by another market (D.C.).

While MLB was caretaking the Expos after the Loria/Henry switcheroo, Angelos figured he had nothing to lose by making a play for free money in perpetuity. Selig was evidently incentivized by a goal of not allowing in ownership in a major market who would spend freely aided by their media rights situation. Another pot sweetener appears to be the rights fees arrangement you note.

With the incoming owner incentivized to not sue over a deal that gave rights where there were none to the detriment of the D.C. market franchise -- or they wouldn't get the team, the corrupt deal was hatched.

[HalfSmokes]

34% of rights fees go to MLB and 0% of ownership profit sharing. So idiotic of the Nats and Os to send tens of millions more to MLB than necessary.

Most of the ownership profit sharing goes to the Os- not sure why the nats would want to bump that number when they still net out a greater percentage of rights fees

[Mathguy]

How many other levels in the civil legal system are there that this case will have to go through ?

https://media.sportbusiness.com/news/washington-nationals-gain-decisive-legal-victory-in-long-running-masn-fight/

[1995hoo]

How many other levels in the civil legal system are there that this case will have to go through ?

As I noted earlier, the arbitrators’ award was confirmed by New York Supreme Court. Appeals from that court usually lie to the Appellate Division. Any subsequent appeal would be to the New York Court of Appeals, the state’s highest court. In theory, it could be possible to go from there to the US Supreme Court if there were an issue of federal law. I have no idea whether there is, though I kind of doubt it. Very minimal chance this case could ever reach the US Supreme Court. I wouldn’t be surprised if MASN and the Baltimore franchise try to appeal to the higher state courts, though I haven’t followed it closely enough to have any sense for what errors they claim the Supreme Court made, much less the merits of any such claim.

[tenken627]

As I noted earlier, the arbitrators’ award was confirmed by New York Supreme Court. Appeals from that court usually lie to the Appellate Division. Any subsequent appeal would be to the New York Court of Appeals, the state’s highest court. In theory, it could be possible to go from there to the US Supreme Court if there were an issue of federal law. I have no idea whether there is, though I kind of doubt it. Very minimal chance this case could ever reach the US Supreme Court. I wouldn’t be surprised if MASN and the Baltimore franchise try to appeal to the higher state courts, though I haven’t followed it closely enough to have any sense for what errors they claim the Supreme Court made, much less the merits of any such claim.

Thats if the New York Court of Appeals would even grant the appeal and listen to them. It just seems to everyone that MASN and the O's are just trying to delay the inevitable as much as they can.

[spidernat]

  Timing might help with Rendon

  that's really going to happen

[1995hoo]

Thats if the New York Court of Appeals would even grant the appeal and listen to them. It just seems to everyone that MASN and the O's are just trying to delay the inevitable as much as they can.

Exactly!!!

[UMDNats]

So it's now a lock that MASN will be a kaput network once the Nats can get out, does the network even make sense financially then? The Orioles are a turd team, with an ownership group that is looking to sell and relocation rumors are already there. Cool team they've got!

I wonder if Bob, FP, Kolko, etc. survive the move to NBCSW.

[tenken627]

So it's now a lock that MASN will be a kaput network once the Nats can get out, does the network even make sense financially then? The Orioles are a turd team, with an ownership group that is looking to sell and relocation rumors are already there. Cool team they've got!

I wonder if Bob, FP, Kolko, etc. survive the move to NBCSW.

Honestly, this is great news for Orioles fans too I would think. Perhaps forcing the Angelos' to sell their team and a much devalued/bankrupt MASN.

[nfotiu]

So it's now a lock that MASN will be a kaput network once the Nats can get out, does the network even make sense financially then? The Orioles are a turd team, with an ownership group that is looking to sell and relocation rumors are already there. Cool team they've got!

I wonder if Bob, FP, Kolko, etc. survive the move to NBCSW.

How do the Nats get out?

Also, this fight was all about the 2012 reset right?  When do they start fighting about the 2017 reset?  If they were owed 100 million over those 5 years, they must be owed at least another 60 million for these last 3 seasons, plus whatever they weren't being paid when MASN stopped paying rights fees.

[UMDNats]

As soon as their contract allows I would imagine the Nats are leaving MASN. Zero reason to stay, especially with NBCSW sitting right there and much better for any team. MASN is far and away the worst regional sports network.

[nfotiu]

As soon as their contract allows I would imagine the Nats are leaving MASN. Zero reason to stay, especially with Ted looking to fill the summer months on NBCSW.

The contract is forever though.  That was the condition of Washington getting the team.

[UMDNats]

The contract is forever though.  That was the condition of Washington getting the team.

Is it? Everything I'm reading is that the Orioles got more of a share of TV profits as a concession but not that the contract is binding for eternity.

When the Nationals moved to D.C. from Montreal in 2005, Major League Baseball made a concession to the Orioles’ owner, Peter Angelos, that the O’s could create their own regional sports network and hold a majority stake in MASN. The Orioles and Nationals eventually worked out a deal that MASN would air the Nationals at a discount on rights from 2005 through 2011, when the rights for the Nats would increase to “fair market value.”

https://awfulannouncing.com/mlb/according-to-the-nationals-masn-hasnt-paid-them-a-rights-fee-in-nearly-a-year.html

Edit: I did see this. So you may be right:
https://www.washingtonpost.com/sports/nationals/washington-nationals-baltimore-orioles-split-over-masn-cable-tv-rights-fee/2012/08/14/2e91845e-d810-11e1-b8ce-16e9caa8b86a_story.html?noredirect=on

So when MLB, which owned the franchise known until 2004 as the Montreal Expos, was trying to arrange the team’s move to Washington, the Orioles argued that they should be compensated for having to share their territory. MLB brokered an arrangement in which the Orioles would convert their existing Orioles Television Network into a larger one, MASN, and buy the Nationals’ television rights. The contract has no termination date, according to someone familiar with the deal.

The Nats could lawyer their way out of this, I would imagine, no? They re-negotiate every 5 years for the rights fees, just say freak it.

One potential way to help solve the dispute would be to allow the Nationals to buy into a larger equity stake of MASN, up to a 50-50 split between the teams. That way, both teams would be equally invested in the network and profits would be split evenly, according to Michael J. Cramer, a former president of the Texas Rangers and NHL’s Dallas Stars who is director of the Texas Program in Sports and Media at the University of Texas.

“That’s what I would do and I can’t imagine that isn’t what [will] happen in the future,” Cramer said.

Added Tavares: “My best guess is that they’ll find a deal that no one will be happy with.”

Angelos, he said, “will be thinking he’s paying too much and the Nationals will be thinking they didn’t get enough. By definition, that means it’s a good deal.”