Nationals, Orioles split over MASN rights fees continues

(Richard Carson/Reuters)

The season’s end is only six days removed, but the Nationals’ attention has already turned to next season, examining the roster and finding needs to fill, beginning to target potential free agents and more. But yet again, they will do so under a cloud of some uncertainty.

A yearlong and ongoing dispute over the value of the Nationals’ television rights has yet to reach a resolution. A Major League Baseball committee composed of executives from three teams is still considering a disagreement between the Nationals and the Mid-Atlantic Sports Network (MASN), which is controlled by the Baltimore Orioles and broadcasts both teams’ games. In other words, no news yet.

League officials are concerned primarily, right now, with the playoffs and the World Series. There’s no reason to believe a resolution will announced before then or immediately after the postseason’s conclusion. The disagreement surfaced last winter, and two deadlines were blown this summer. MLB Commissioner Bud Selig expressed his frustration then with the delays. This winter could be a crucial time for a ruling to be announced. An MLB spokesman declined to comment on the matter on Thursday.

(For more on the history of the unique MASN arrangement and why it was struck, read this explanatory story we published in August.)

Last winter was the first time in this unusual arrangement that the Nationals’ television rights fees could be adjusted. The Nationals asked for between $100 million and $120 million per year, at least three times the $29 million they received for the 2011 season, an increase they felt was comparable with the exploding television rights fees in equal-sized markets across the country.

MASN proposed paying the Nationals $34 million this season while the dispute was still unresolved, according to another source who spoke on condition of anonymity because of the sensitivity of the issue. MASN and the Orioles argued that their proposal wasn’t comparable with the ballooning contracts secured by teams across the country because every five years the fees with the Nationals would be reset. 

Extrapolated over 20 years, MASN and the Orioles offered a deal worth $2 billion. The Nationals also have a equity stake in MASN that increases by one percent each year and will stand at 14 percent for the 2013 season. (The Nationals’ equity stake will cap at 33 percent, and the Orioles control the remaining percentage.) Based on the proposal, the rights fee amount would increase to just under $37 million in 2013 with an equity stake payment of $8 million, the source said.

Both teams enjoyed historic seasons this year and saw a jump in television ratings. But increased ratings and rising fan interest in the Nationals, who reached their first-ever postseason this October, are only contributing factors and not determining factors in their argument for larger rights fees. Their case hinges mainly on the rise in rights fees in comparable markets.

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