As fans, our understanding of the finances of the professional sports teams that we follow is naïve at best, and that’s mostly because those in charge of said finances like it that way, and will go to great lengths to keep it that way.
We learned through the labor discords that every league has had to deal with over the last decade or so that the greatest leverage that one side can have over another is the ability or potential to make one of these organizations “open their books”. The suggestion has been made that Peter Angelos’ inherent understanding of this leverage was the very tool that he used in negotiating the settlement that allowed the Montreal Expos to land in DC and become the Nationals; thereby creating the MASN network and the lopsided deal at the heart of it.
Orioles fans were given cause to celebrate the creation of MASN as it was supposed to level the financial playing field for the Orioles with the top financial echelon of the AL East. As yet, those promises have gone unfulfilled and the lesson that Orioles fans have slowly been made to accept is that the creation of MASN ultimately benefits no one but Mr. Angelos himself.
It’s funny how baseball will allow the mismanagement of certain, even most, teams to go unchecked. Actually you could probably make a viable case that MLB and the commissioner’s office has been an enabler of franchise mismanagement on far more occasions than they’ve ever acted as a deterrent. Except when it came to the Los Angeles Dodgers that is.
When Frank McCourt found himself in financial straits and seemed to as a result look to quickly negotiate the Dodgers local television deal, MLB and commissioner Bud Selig wouldn’t have it. Now as the Dodgers stand on the precipice of closing a long-term TV rights deal that will pay them in the ballpark of $6 billion or more over the next 25 years it’s clear why Selig was so interested.
The Dodgers deal is a game changer. Yahoo sports Jeff Passan reports that not only will the Dodgers make upwards of $1.5 million per game under the terms of the new deal but also that it would make the Dodgers TV revenue alone exceed the total revenues of 26 of baseball’s other 29 teams.
Meanwhile the MASN finds itself entrenched in a battle to keep the TV rights for the Washington Nationals at a paltry by comparison $35 million per season, up from $29 million in 2012. The interesting part of the battle that Peter Angelos is set to stage against the Washington franchise is that by the terms of the original agreement between baseball and the Orioles’ owner, the Orioles would take that same $35 million in TV revenues. So essentially Angelos finds himself set to go to court and fight it out in an effort to keep down the TV revenues that his baseball team draws from his network.
Angelos’ motivation is an easy one to figure out. Any money that MASN pays out to the Orioles directly has to be paid out equally to the Nationals, however as a result of the aforementioned lopsided agreement any money kept under the MASN “umbrella” is currently divided with 87% going to Angelos and 13% to Nationals ownership. Some have made educated suggestions that total MASN revenues are likely upward of $200 million.
So let’s look at it in these terms. If (and I repeat if) total MASN revenues are $200 million, and the Orioles and Nationals each receive $35 million, that leaves $130 million as MASN profits. Of that $130 million the Orioles ownership would walk away with $113.1 million and Nationals ownership just $16.9 million. That’s $148.1 million to Angelos and company and $51.9 million to the Nationals ownership group. If television rights fees were increased to $75 million per side it would leave “only” $50 million in MASN money. Under the 87/13 split, that $50 million would send $43.5 million to the Orioles and $6.5 to the Nats. In total that’d be $118.5 million to Angelos and company and $81.5 to Nats ownership, a financial swing of about $30 million from the Orioles to the Nationals.