As the Washington Nationals’ fortunes and potential roster improvements are discussed, much is being made of the team’s current television rights deal and its potential for improvement in the coming months. It’s worth examining the history of the team’s current TV deal, a deal that’s viewed as controversial by some and legally dubious by others. The Mid-Atlantic Sports Network was created out of one of MLB commissioner Bud Selig’s many paths of least resistance that he chose during the excruciatingly long process of MLB’s relocation back to this area. After that relocation was approved unanimously save for Orioles owner Peter Angelos, Angelos leveraged Selig’s desire for all things neat and timely into a highly questionable acquisition of the new Washington team’s broadcast rights. Having been ultimately unsuccessful in his efforts to use a territorial rights argument to keep baseball from returning to the DC area (especially as those rights as defined by MLB ended at Howard County’s southern border), Angelos attempted to morph the argument into requiring compensation from MLB for the new team’s breach of the Orioles’ broadcast rights.
However, MLB broadcast rights had never been defined let alone enforced, from the days when the Orioles were the team entering what was the Senators’ broadcast market to the latest expansion team (Tampa Bay) which never had to make any concession to the Marlins or Braves upon their league entrance. Nevertheless, Angelos floated through many media outlets that he would sue unless some sort of accommodation was afforded him and his franchise. The real threat had nothing to do with potential merits of an Angelos lawsuit (which were slim and none) but with the threat that MLB might have to open its books due to discovery. This widely discussed threat (and later rationale for the MASN boondoggle) ignored the fact that the Quebecois owners/caretakers of the Expos had threatened an international lawsuit starting in the late 1990s (which slowed down the relocation process thanks to Selig’s risk aversion) and gone through with one in 2002. During the time of its filing and its eventual dismissal on November 15, 2004, the Expos owners lawsuit did not result in any public revelation of MLB’s financial records. Despite this fact and the wide powers afforded to Selig as commissioner and his office under the “best interest of baseball” clause to stop or sanction any damaging actions against MLB by an existing owner, Selig cut a deal with Angelos that would be in place without the eventual franchise owner ever getting to weigh in on the process.
As part of this one-sided deal, the Nationals received a 10% minority share of MASN, a share that will only increase to 33% after 20 years. However, the team’s yearly rights fee from the network is subject to readjustment every five years according to market value. To help negotiate the new yearly rights fee, the Nationals have retained the media consultant who oversaw the Rangers’ rights deal that will net $80 million a year. If no deal can be reached between the two parties on the readjustment amount, the matter will be headed to arbitration. If so, the Nationals would want as much evidence brought to bear concerning the team’s big-market product and its drawing power. Barring an effort to gut the horrific MASN deal altogether, the Lerners would be well-served positioning themselves as a franchise on the rise that’s due to bring in many more viewers in the near-future than it has been. It may well be that boosting the team’s Spring Training and early season numbers could impact the arbiters’ final decision as to how much the team’s television monies will rise from now until the next readjustment period. As such, it makes the hoped-for signing of superstar slugger Prince Fielder a potential selling point in this process.
How such an arbitration process would unfold is not publically known, but it’s reasonable to speculate that the more big-time the Nationals and their near-term ratings appear, the better it will be for their deal. Without Fielder, the Nationals will make it tougher to sell to an arbitration panel that the team has truly moved to a new level beyond where they were at the start of the MASN deal. To wit, the team’s payroll will be within a few million dollars of where it was when the Lerners and Stan Kasten took over the team in 2006. With Fielder in the fold, the 2012 payroll will likely move into the $90 million range, which if nothing else represents growth towards what big market teams maintain annually. If the Nationals can point to a significant boost in ticket sales following a Fielder deal and/or improved ratings early in 2012, their case could conceivably be greatly enhanced. At any rate, the Nationals can blame themselves and their low payroll and bottom-division ways for their inability to garner big ratings (finishing last in the league in 2011) and must risk having that work against their yearly rights fee negotiations. It’s about time that the team realizes that it can help themselves and their future fortunes best by investing in the team and giving fans the chance to show that this is a big-league market ready, willing, and able to support a contender.
