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The Peter Principles (Ch. 13): Mi$ter Angelo$ & $on$ Network change$ everything for two citie$

Posted on 04 July 2018 by Nestor Aparicio

This is Chapter 13 of the upcoming book, “The Peter Principles.” This lengthy excerpt is a prelude to a WNST report on ten years of MASN money and how Washington baseball has affected Baltimore baseball over the past decade. The first three chapters of the book are available here:

The Peter Principles (Ch. 1): So, just how did Angelos become ‘King’ of Baltimore baseball?

The Peter Principles (Ch. 2): The error of tyranny at Camden Yards

The Peter Principles (Ch. 3): How close did Angelos come to owning Baltimore’s NFL team?

The Peter Principles (Ch. 12): Selig vs. Angelos – trust, antitrust and billions of dollars

 

 

“The most important part of the deal is the equity in MASN over the long term. In a few years that equity stake in the network will be worth far more than any rights fee that a Comcast or a Fox SportsNet could pay (the Washington Nationals). So they will in time have a 33 percent stake in MASN without one penny of investment. We pay all production costs, overhead, the staffing and program fees. The new Nationals get all the benefits without the risk. My goal, and I am sure it is the same for the Washington owners, is to have two very successful franchises that work together on a number of projects while being friendly rivals on the field.”

Peter G. Angelos

The Examiner

April 7, 2006

 

 

AS PETER G. ANGELOS WATCHED THE Boston Red Sox win the 2004 World Series, he was still a state of shock that his Major League Baseball partners and commissioner Bud Selig had actually done the unthinkable – placing a rival National League team into Washington, D.C. to compete with the Orioles, forever dividing the marketplace.

Insiders said they’d never seen Angelos so angry, so agitated, so betrayed and hell bent on making them pay for this decision to double cross a partner. Selig had been contrite in their conversations and vowed to somehow find a way to keep Angelos whole on the deal and the burgeoning business of television networks had become the next generation way of getting money from the masses to fund baseball growth. In the 1980s, MLB discovered sponsorships and a higher-end clientele. In the 1990s, MLB discovered leveraging municipalities for new stadia, skyboxes, club seats and premium sponsorships. Now, in the new century, it was going to be television rights and revenues derived from cable purchasers who are bundled into larger all-but-invisible packages where the “regional sports network” would garner a few dollars per month, per subscriber.

This was a way to collect automatic, “unseen” money from virtually every home in their region. They would be getting tens of millions of dollars from folks who wouldn’t even know they were funding Major League Baseball. The Lords would be getting money from people who didn’t even know what baseball was ­– or where to find it on the multi-channel cable dial.

Angelos had already become wise to the reality of the changing media marketplace. He didn’t really understand but it ­– but knew it had tangible and growth value in the future.

It was no accident that the New York Yankees and the Boston Red Sox had more far revenue to spend on better baseball players, which exponentially aided their ability to win and keep the money machine well oiled with local interest and new-age marketing. The Yes Network was a product of a 1999 merger between the Yankees and New Jersey Nets for the express purpose of marketing a cable television channel in the New York region that would cut out the middleman – the sports cable television networks. The war in New York with Cablevision was legendary and it was big money. In 2001, the New England Sports Network (NESN), which enjoyed a near monopoly status in the region for television sports, went to the basic tier of cable, meaning far greater distribution and more money that would be used to fund the new and improved Boston Red Sox.

The same Red Sox that Angelos just watched win the World Series, who were led in part by Larry Lucchino – the former Orioles president and investor, who was the visionary for the modern franchise and building of Camden Yards, and the first employee whom Angelos unceremoniously partnered with and then ousted a month later in 1993 after his Orioles acquisition from Eli Jacobs in a New York auction.

Angelos knew all of his options, demands and “asks” in regard to what he’d be trying to retain and obtain if Selig and his MLB partners ever crossed the line and did the unthinkable – putting the Expos just 38 miles away in his backyard.

But, make no mistake about it, Angelos would’ve far preferred to have never seen the Washington Nationals born at any cost or any profit.

He abhorred the concept of D.C. baseball.

Washington baseball was truly his worst nightmare as the owner of the Baltimore Orioles. He was absolutely convinced there was no financial way to make him “whole” – and worse, he truly believed that it would drastically affect not only his team, but that the Washington team would fare no better in a market that Angelos and most everyone else remembered as a two-time baseball loser in the 1960s and early 1970s. But a lot had changed since the Senators left for Arlington, Texas in 1971 to become the Rangers.

The Northern Virginia suburbs had grown exponentially over the nearly four decades and the biggest enclave of per capita earnings in the United States fell throughout what Angelos felt was hard-earned Orioles country. Angelos valued the Washington, D.C. community for the same reasons Selig and the other MLB owners did – they smelled the size, money and disposable income. Angelos claimed that 30% of his audience came from those homes and wallets. The Orioles and Major League Baseball were a television brand that his baseball brand had cultivated over 30 years and he and his partners paid top dollar for in 1993.

Angelos felt absolutely deceived, absolutely blindsided by their lack of concern …

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The Peter Principles (Ch. 12): Selig vs. Angelos – trust, antitrust and billions of dollars

Posted on 04 July 2018 by Nestor Aparicio

This is Chapter 12 of the upcoming book, “The Peter Principles.” This lengthy excerpt is a prelude to a WNST report on ten years of MASN money and how Washington baseball has affected Baltimore baseball over the past decade. The first three chapters of the book are available here:

The Peter Principles (Ch. 1): So, just how did Angelos become ‘King’ of Baltimore baseball?

The Peter Principles (Ch. 2): The error of tyranny at Camden Yards

The Peter Principles (Ch. 3): How close did Angelos come to owning Baltimore’s NFL team?

 

 

The Peter Principles

Chapter 12

The Washington Nationals were the greatest thing to ever happen to Peter G. Angelos

 

“We’re going to be watching very carefully to see what’s going to happen with some of the efforts to put a baseball franchise in Washington or in Northern Virginia. And I’m gonna tell ya straight up: we don’t think there should be a baseball franchise in Northern Virginia or in Washington. Because you would have a repetition of what you have in Oakland and San Francisco. In Oakland and San Francisco you have the same kind of population mix that you have between Baltimore and Washington. And those two teams kill each other off. Both of those teams drew, last year, less than two million fans. Together, they drew 3 million fans. But because they’re so close to each other and they’re both part of one metropolitan area – mega metropolitan area – they are literally killing themselves at the gate. We have argued, I think to this point, successfully, that there should not be another Major League Baseball franchise 30 to 40 miles away from Baltimore. It isn’t that we would deny the people that live in those areas the recreational pursuit of baseball. We think baseball is a great game for everybody. But when we look at the experience of Boston, Philadelphia, Oakland, San Francisco – Boston and Philadelphia and St. Louis had two ballclubs. The history of baseball dictates that you can’t put two teams that close together. We are opposing that. We think Orioles baseball is plenty good enough for us as well as the people in the Washington suburbs and we thank them for that support and we want to retain that support.”

Peter G. Angelos

The Barn, March 1997

 

 

WITH THE BIG MONEY SPLURGE OVER the winter, Peter G. Angelos believed he’d solved most of his 2004 problems on the field with the Orioles. But, truly, the team on the field or how it performed in the spring was the least of his big-picture problems with the franchise. Angelos was far more focused on its future viability in Baltimore if his Major League Baseball partners were going to acquiesce to mounting civic pressure from Washington, D.C. and move the fledgling, all-but-homeless Montreal Expos to the capital of the free world to openly compete in a marketplace that had solely been the territory of the Orioles since the early 1970s.

Once again, a decade into his ownership of the Orioles, Angelos found himself knee-deep into circumstances that went far beyond the boundaries of the normal business of simply running a baseball team and trying to win and turn a profit. For the first time in modern baseball history – the last team that moved was the Washington Senators to the Dallas-Fort Worth area in 1972 – a MLB team was going to being uprooted and potentially moved directly into the territory of an existing franchise.

While he picked many of battles over years with political figures, media members, Orioles players, agents, partners, insurance companies and big businesses, this was certainly a battle that found Angelos. He was a natural fighter. But this was not a fight he ever wanted.

When Camden Yards was flooded with fans in his early days he always maintained that there was no way two teams could survive and thrive in the Baltimore-Washington corridor. He was always adamant – if not even enthusiastic and animated – in his protests of anything related to Washington having a Major League Baseball team.

Washington baseball was his worst nightmare.

And he saw the clouds were forming very clearly heading into 2004.

Angelos saw where this might be going, and despite his work on an amicable relationship and pro bono efforts during the 2002 labor negotiations on behalf of Major League Basbeall, he still truly believed that commissioner Bug Selig would never cross him and his daily struggle to keep another MLB team out of the nation’s capital. He called Selig “a friend” at one point and indicated his staunch belief that Washington baseball would never happen.

“Washington has a baseball team,” Angelos would say. “They’re called the Orioles.”

You can hear him discuss this topic at length here from March 1997:

If anything had been proven over the years it was that Peter G. Angelos loved a good fight. He was now more than $150 million upside down in his ownership of the Orioles – reports would say at this time that the team was worth $325 million, which would’ve more than cleared up his losses. But, having lost money every year for 10 years and reaching into his personal vast fortune annually to financially support the team was an unnerving reality. But, given his reputation and track record, it was his own doing by chasing away large chunks of revenue streams with a myriad of poor decisions and poor civic form.

Now, as a mostly unpopular figure through both cities’ baseball fan bases, he was bunkering …

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MASN Money For Dummies (Part 3): Angelos was bleeding cash when Nats money came

Posted on 19 January 2016 by Nestor Aparicio

 

 

 

 

 

Those who complain don’t know the ins and outs of what’s going on. They have their own lives to lead, their own problems to deal with. And they are not going to become acquainted with what our economics are, and you can’t expect them to.”

Peter G. Angelos, May 2006

                                                                                 (as told to PressBox via Q&A)

 

 

THE SINCERE HOPE OF PETER G. Angelos is that you’re too dumb to figure this stuff out and too bored to read all of this vital information about where the money comes from. Especially now that Chris Davis has signed a long-term contract, which isn’t a blip on the radar of the finances of the franchise when you do the real math, many fans somehow believe that it was an incredible stretch to find the money to pay him.

Here’s the truth: knowing the facts about how much money the MASN tree is printing for Angelos and his family certainly doesn’t reflect well upon his legacy or commitment to winning. Especially when you consider that the team has been an abject failure on the field in 18 of the 22 seasons under this ownership group.

I love how Chris Davis said “we want to continue a tradition of winning here in Baltimore.” Spoken like a babe in arms. It’s kinda nice that he thinks that but that’s far from the truth. The Orioles haven’t “won” anything under the reign of Peter G. Angelos.

But Mr. Angelos has made a LOT of money – and after he lost a LOT of money.

But to understand the money – and where it came from and where it’s going – is to understand the Orioles’ offseason budgeting and what they’re trying to do on the field. From Chris Davis to Matt Wieters to Darren O’Day, it’s the money that funds the players.

As Buck Showalter said at the winter meetings on December 8th from Nashville on MLB Network TV: “We have plenty of money.”

Today, we’ll examine the history of Major League Baseball and the Baltimore Orioles ownership group and the birth of MASN and the Washington Nationals and how this nuclear war for the biggest pile of television money in local sports history began.

In the Fall of 2004, Peter G. Angelos, as usual, was preparing for war – this time with his partners over the concept of baseball in the nation’s capital. Realizing that commissioner Bud Selig and the owners of the 29 other MLB teams, who collectively had purchased the Montreal Expos, were hell bent on moving that franchise to Washington, D.C., John Angelos issued an internal memo cutting all expenses.

Of course, some saw this as a sign that he was about to sell the Orioles to local money manager Chip Mason.

“The mere issuance of a memorandum suggesting potential savings in a greater degree in efficiency of operations does not suggest that the enterprise being reviewed is for sale,” Angelos told The Baltimore Sun. “To suggest otherwise is absurd and clearly erroneous.”

The team had just invested $121.5 million into contracts for Miguel Tejada, Javy Lopez, Rafael Palmeiro and Sidney Ponson. “The millions recently spent on player acquisitions hardly suggest we’re on a cost-cutting crusade,” Angelos told the local newspaper. “On the contrary, we are moving forward aggressively to produce a very competitive and winning team for our fans both this year and in the years ahead.”

At this point, Angelos was very quietly hemorrhaging money by the tens of millions. In the early days, he bragged about the Orioles making money to The Baltimore Sun.

Seven years earlier, Angelos sat with me at The Barn in March 1997 on WLG-AM 1360 and went through a lengthy diatribe about how baseball could never work with two teams – one in Baltimore and one in Washington, D.C. (and at that point Northern Virginia seemed a far more likely destination). But he also told me that the Orioles lost $4 million the previous year – and that’s when they were selling 3.6 million tickets and winning.

Feel free to listen to that conversation here:

This Chapter 3 of my MASN Money For Dummies series will be brief because I’ve already written this part of the Angelos journey as Chapter 12 of The Peter Principles, a book I’ve been writing about the ownership of Peter G. Angelos.

I would cut and paste it here, but just click here and continue reading the history of how this MASN money gravy train began with the poor negotiation tactics of Bud Selig to deal with the likes of Peter Angelos. It’s now 12 years later and nothing is really solved except that the money is flowing in by the tens of millions every month via your cable television bill and MLB and the Nationals, along with owner Ted Lerner, haven’t figured out a way to extract their “fair share.”

In 1994, Angelos said about Selig during the MLB owners dispute with the Major League Baseball Players Association: “He is a very successful automobile dealer. What makes him think he has the abilities to do what he is trying to do here is beyond my comprehension!”

Angelos infuriated every partner in Major League Baseball in 1994. In 2002, he came back to save the day as a lead negotiator – and olive branch Democrat who curried favor with the Players’ Association – for Selig and his MLB partners. But at every turn he made it very clear that any notion of a team anywhere near Washington or Northern Virginia would never be acceptable under any condition.

Angelos lobbied many times and in many ways to keep baseball out of Washington, D.C. long before 2004.

“It isn’t that we would deny the people that live in those areas the recreational pursuit of baseball. We think baseball is a great game for everybody. But when we look at the experience of Boston, Philadelphia, Oakland, San Francisco – Boston and Philadelphia and St. Louis had two ballclubs. The history of baseball dictates that you can’t put two teams that close together. We are opposing that. We think Orioles baseball is plenty good enough for us as well as the people in the Washington suburbs and we thank them for that support and we want to retain that support.”

At the 2004 All Star Game in Houston, it appeared that Bud Selig was still unsure of the future of the Expos.

“I will not do anything to make Peter Angelos unhappy,” Selig told The New York Times.

It’s interesting to do the research and see the local media’s role in garnering the Washington Nationals for the nation’s capital. The Washington Post played as big of a role in the franchise and ballpark as it …

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