But there is an albatross that the new owner may have to contend with: MASN. The Mid-Atlantic Sports Network broadcasts the Nationals games. Unlike other baseball teams, most of which sell their local television rights to a regional cable network, Citizens Rights is tied to the network, a controversial arrangement put in place when the team moved from Montreal in 2005. The network is controlled by the Baltimore Orioles.
“I don’t think you will be able to close a deal without a solution one way or the other [on MASN]Said Robert Malandro, managing partner at Whitecap Sports Group, an investment bank that has advised major league teams on sales. “If someone is going to spend $2 billion, I think they’re going to need some certainty about media rights.”
That may be in the works, according to two people familiar with the MASN agreement, who said they believed there would be an attempt to settle the dispute as an investment bank hired by Lerners explored the sale.
Whether any compromise attempt will succeed is another matter.
A decade ago, citizens sued MASN for over tens of millions of dollars in rights fees that they believed MASN owed them. That lawsuit is still ongoing. Meanwhile, the relationship between the network and the citizens became so tense that the two sides were also involved in a separate lawsuit. About how network profits are distributed.
Apart from legal disputes, MASN has frustrated citizens and their fans with cutting costs in recent years. Games coverage has been cut off, and this season is MASN He tried to cover matches without sending announcers on the road which resulted in technical difficulties.
Neither team is reaping financial benefits, at least compared to some of the other perks. According to a person familiar with finances, the Nationals and Orioles received about $60 million each last year for their television rights. in comparison, In 2014, the Philadelphia Phillies signed a 25-year, $2.5 billion rights agreement with Comcast.
Prior to the arrival of the Nationals in 2005, the Orioles held sole authority over a regional television area that stretched from Delaware to North Carolina. The owner of the Orioles, Peter Angelos, has reached an agreement with Major League Baseball to compensate his concession for sharing his geographic area with a new team.
Enter MASN. Citizens and Orioles are part of the network’s ownership, with Citizens owning 23 percent and Orioles 77 percent. The Nationals’ share increases annually by one percentage point to 33 percent.
There was doubt from the start. According to a summary of the MLB Executive Committee meeting on the same day the agreement was signed, several owners, including Jerry Reinsdorf of the Chicago White Sox and Bill DeWitt of St. Impact on the selling price of citizens.
However, the deal passed. He clarifies that the sale of either party will not lead to its dissolution.
“In the event of a sale of Orioles, Nationals, or RSN…” the agreement states that “all purchasers, assigns or transferees shall be unconditionally bound by all terms and conditions of this agreement.” The meeting summary indicates the length of the deal as “forever.”
In a joint statement to The Washington Post, MASN and the Orioles reaffirm their position that the agreement is necessary and resolute.
“The negative effects that the MLB decision to move the Expos to Washington has had on Baltimore, Maryland and the Orioles will continue indefinitely as long as the Nationals play in Washington,” the statement read. “Accordingly, pursuant to the 2005 MLB-Orioles Settlement Agreement, MASN’s exclusive ownership of both the Orioles and citizens’ television rights throughout the Orioles Territory for exclusive home television continues in perpetuity, regardless of the owners of each club.”
Nationals declined to comment.
Commissioner Rob Manfred can renege on the agreement under the “baseball best interests” clause, a vague but broad authority. Outlined in the MLB Constitution. But a person familiar with the commission’s thinking said the MLB would probably find it difficult to do so because the Orioles had successfully argued in court that the MLB was not a neutral party to adjudicate MASN disputes.
The result, according to two people familiar with the contract, is that the MASN deal is extremely difficult to unravel in the absence of a negotiated settlement.
However, there are reasons to believe that a new agreement is possible. It starts with the rapid transformation of the media landscape.
MASN is an independent RSN, which means that the company only operates on one cable channel. Cutting the cable has made life difficult for all RSNs but perhaps even more difficult for MASN, which doesn’t have the scale to help it negotiate with cable distributors as Comcast or Bally, which both have multi-sport networks.
According to Kagan research firm, S&P Global Market Intelligence, MASN subscriptions fell from 5.6 million in 2018 to 3.6 million this year. And anyone who has watched MASN in recent years has noted that the network has responded by cutting costs; There is no parser on the pre-game and post-game shows for the Nationals, and the TV set was ripped out of the center that hosted that coverage.
“If MASN was owned by Comcast, this wouldn’t have happened,” said Bill Isaacson, partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, who worked on the RSN lawsuit. “You’ll see more money being pumped into it.”
It would have been possible. According to two people familiar with the discussions, MASN had talks about a decade ago about selling itself to Comcast for more than $1 billion. The deal discussed would pay both teams more rights fees than they currently receive from MASN. It is unclear why this deal collapsed.
Any new deal must overcome many complications. The Orioles, worried that the team would struggle to sell television rights alone in the Baltimore small market, insisted that any settlement continue to compensate them for the Citizens’ place in the market and that the teams’ rights remain shared. In the meantime, the citizens want to free themselves of any association with the Orioles and operate their television rights like any other team.
According to the person familiar with the commission’s office thinking, MLB is sensitive to the idea that the settlement requires more protection for the Orioles rather than simply returning citizens’ rights to them and will need to ensure both teams receive viable television revenue.
But citizens also have a new form of influence. In addition to MASN’s look, a New York court has found that MASN owed Citizens about $100 million in late payment for rights between 2012 and 2017. The Orioles are appealing, but the Nationals’ television rights since 2017 may be an entirely new lawsuit. The settlement scheme can probably be found in the waiver of these payments in exchange for the modification of the MASN deal.
Another wrinkle: Angelos is 92, and rumors of Oriole’s selling interest have been circulating around baseball recently. If the Angelos are interested in selling orioles, they can charge a large upfront fee before selling as part of a settlement—or new oriole owners may be more interested in settling.
The same is true of citizens: potential owners can negotiate directly with Orioles as part of the purchase process. Malandro suggested that potential citizen buyers who were not interested in these conversations could approach their bids in another way: offer one price if a deal is reached and another if there is no deal before the sale.