Another reminder of the escalating stakes and mind-boggling math associated with the Nationals’ standoff with MASN over rights fees came this weekend. The Los Angeles Times reported that the Dodgers are in negotiations with Fox Sports that could result in a $6 billion, 25-year television contract. That would work out to Fox paying the Dodgers $240 million per season to broadcast their games – or a staggering $1.48 million per game.
With that as a backdrop, the impasse between the Nationals and Orioles fate in their dispute over money generated by MASN remains in the hands of Major League Baseball. The league has been in control since a three-member mediation panel took over the case this summer. At the all-star break, Commissioner Bud Selig said he expected the deal would have been settled “a month ago.” But one person familiar with the talks said “big issues” still remain, and there is no apparent timetable for a resolution.
Through a spokesman, MLB declined comment on the Nationals-MASN issue.
The potential Dodgers deal makes clear both why a group that included former Nationals team president Stan Kasten purchased the team for more than $2.15 billion last summer and how valuable television rights have become. In a DVR-dominated landscape, live sports may be the last, best way to get viewers to sit through commercials as they watch TV.
The Nationals occupy an unusual place in this dynamic because of their unique arrangement with the MASN and the Orioles over television rights. The Nationals remain in a battle over how much money they should receive from MASN, the network that airs their games and is majority-owned by the Orioles.
Major League Baseball put the contract in place in order to appease Orioles owner Peter Angelos when the former Montreal Expos moved to Washington in 2005. But the stakes have changed since that contract was signed by both parties – the rights fees generated by pro sports in general and baseball in particular have skyrocketed.
Which is why the Nationals are locked in the dispute that has been mediated by a three-member panel – with representatives from the Rays, Mets and Pirates – overseen by MLB Executive Vice President Rob Manfred since late spring. At last check, per reporting by colleague James Wagner, the Orioles wanted to pay the Nationals $34 million for their rights fees this year, while the Nationals asked for roughly $110 million.
Under the current contract, the Nationals stand to make $45 million in 2013 from MASN between their rights fees ($37 million) and their share from their equity stake ($8 million).
The sides remain entrenched. The Nationals believe the landscape for rights fees has changed so much since the original contract that it would be harmful and negligent for baseball in the Washington market to allow it to stand. The Orioles are negotiating with the current MASN contract on their side and have no shown no willingness to budge from the original deal.
MLB has broached the possibility of restructuring the MASN deal to increase the Nationals’ ownership stake in the network. The Nationals currently own 13 percent of MASN, with their share scheduled to go up roughly one percent each year until it reaches 33 percent. The Orioles have pushed back against that idea, again digging in to defend the original deal.
The news about the Dodgers should only intensify the Nationals’ desire for a new deal. Receiving $45 million per year from their television would put the Nationals at a stark competitive disadvantage to comparable markets. The Los Angeles market is far larger than Washington, but the Nationals’ market, which includes the large surrounding suburbs, is substantial. The lucrative tide caused by the Dodgers’ deal, the Nationals will argue, should raise all boats.
For now, the standoff remains. The Nationals are not happy with the current arrangement, the Orioles are fighting to keep it that way and, with MLB holding the reins, there seems to be no clear end in sight.