An old Sun scribe, Ken Rosenthal, says that sources are telling him that Major League Baseball will decide how much MASN owes the Nationals for rights fees.
The Orioles, of course, own a majority of the network that televises both team's games. Orioles owner Peter Angelos brokered that deal by arguing that the arrival of the Nationals in D.C. would cut into the Orioles' profits. In the beginning, he owned 90 percent of the network, and his percentage is dropping slowly and will bottom out at 67 percent.
But as part of the contract, MASN still has to pay rights fees to both clubs. And this is how the Nationals, which play in the bigger market, can attempt to recoup money. Their payout is supposed to be re-calibrated every five years to match market rates.
And wouldnt't you know it, the Orioles' idea of market rates differed from the Nationals' idea. Up til now, the Nats have received just $29 million per season.
Rosenthal writes about a few pertinent comparables, which you have to think will be used by MLB to set the rate:
Washington D.C. is the ninth largest television market, according to Nielsen. The San Diego Padres, who play in the 28th-ranked market, recently completed a deal with FOX Sports San Diego that will pay them a $200 million upfront bonus and $50 million annually for 20 years.
The Texas Rangers, who play in the fifth-ranked market, will receive $150 million per year under a 20-year extension with FOX Sports Southwest, according to USA Today. That deal begins in 2015.
(Baltimore, in case you were wondering, comes in 27th in this version of Nielsen's rankings.)
Clearly the Nationals are in line for a dramatic increase, which means MASN's profits are likely to decrease.
I haven't really seen a breakdown of how Peter Angelos divides and spends his money. Sure, cash is fungible, but you figure that Angelos and his money men have put up some sort of barriers between businesses.
The thought, at MASN's birth, was the revenues from the network would fuel the O's charge into competitiveness. But other franchises have been able to replicate or exceed what's being generated by MASN.