Decision About New Rights Deal For Nationals, MASN DelayedPosted on June 12, 2012
By Dave Hughes
There's a reported $70 million annual difference between the Mid-Atlantic Sports Network and the Washington Nationals, causing a delay in a key ruling on a dispute between the team and the Baltimore-based regional sports network on future media rights fees.
A decision from a Major League Baseball panel was expected June 1, but that deadline has been extended to July 1 at the earliest.
According to the Baltimore Business Journal, it's not clear why MLB has held off on making a ruling, especially because the league originally heard testimony in April.
But sources say the league has a concern that any decision will lead to a lawsuit from one side or the other.
The Nationals want something in the neighborhood of $110 million per year in media rights, considering the top10 size of the Washington, D.C., market.
But MASN officials are arguing for a $35 million-per-year fee, citing the team's low TV ratings. That's a 20 percent hike, compared with the $29 million yearly fee it has been paying the Nationals the past five years.
Also, MASN representatives contend that because the station carries Baltimore Orioles games in the Washington market, it's a shared baseball rights market, and that should further depress the Nationals' media rights fee.
As part of their MASN deal, the Nationals can reopen their media rights deal every five years. Because the negotiations have not yet produced a deal, the dispute went to an MLB arbitration process.
According to the Baltimore Business Journal, the Nationals hold a 13 percent equity stake in MASN, adding 1 percentage point annually until it peaks at 33 percent.
The network is predominantly owned by the Baltimore Orioles and the team's majority owner, Peter Angelos.
MASN revenues aren't as great as other regional networks, such as Fox or Comcast, so it would need to be creative and possibly seek a corporate partner, said Jim Williams, who pens a sports media column for the Washington Examiner.
Many broadcast sources feel the Nationals will be in line to get in the $70 million- to $90 million-per-year range, Williams said.
But what should concern MASN executives is that they have agreed to pay the Orioles whatever the Nationals receive, Williams said.
"Taking the low estimate of $70 million a year -- $140 million annually for both teams -- to pay out in rights fees to the Nationals and Orioles, there's no way the network could make up that money without going back to cable companies and looking for a rate adjustment," Williams said.
Cable industry sources say that MASN's area TV sports rival, Comcast SportsNet, which is owned by the recently combined Comcast-NBCUniversal media giant, would be willing to pay the Nationals close to their requested $110 million per year in rights fees.
Posted June 12, 2012