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June 25, 2012 5:00 am
A look at how the Nationals are trying to get more out of their television deal
To get to the heart of this messy matter, one needs to start at the beginning. The creation of Mid-Atlantic Sports Network (MASN) was the direct effect of negotiations between MLB and Orioles owner Peter Angelos to allow the relocation of the Montreal Expos to the Washington, D.C. market. Angelos was vehemently opposed to the move, saying that while the location proposed in the Nation’s capital would not infringe on baseball’s physical territory outlined in the MLB Constitution (see page 15), it would carve a hole in the Orioles’ television territory and take a massive dent out of TV revenues. The compromise was the creation of MASN. The Orioles initially controlled 90 percent equity in the regional sports network, while over a 23-year period the Nationals’ equity would grow to just 33 percent. Currently, the Nationals have a 13 percent equity stake. In terms of that being an equitable arrangement, the question becomes, “Do you give that much control of MASN to the Orioles or not allow the Expos to relocate to Washington, D.C.?” The answer was more or less, “We’ll choke on the equity stake, just let us (the Expos) into Washington, D.C. and let us become the Nationals.”
Into this mix has been the skyrocketing increase in television rights fees that began with the Texas Rangers’ $3 billion, 20-year deal that was mirrored by the Angels and has since set the market. The Padres—who, based on Nielsen, are the 28th largest Designated Market Area (1,077,600 television homes)—are on the verge of completing a deal with FOX Sports San Diego in which the club will receive a 20-year television deal that could top out at as much as $1.2 billion and has $200 million in up-front equity. Such a rights deal would pull in $50 million annually.