Major League Baseball and the Baltimore Orioles will share ownership in a regional sports network that will include broadcasts of Washington Nationals games, giving Orioles owner Peter Angelos at least part of what he wanted as compensation for MLB moving the Nationals within 40 miles of his club, according to a tentative agreement between the Orioles and the league.
Under the agreement, according to well-placed sources, newly created Mid-Atlantic Sports would pay the Nationals a rights fee and distribute 76 of the club's games to WTTG-5 and WDCA-20, two Fox-owned broadcast stations in Washington. Most of the rest of the games are targeted for satellite and cable stations, if they agree to carry the network once it is up and running.
Washington area homes receiving cable or satellite transmissions would receive most of the 162 Nationals games, including the 76 broadcasted on either WTTG or WDCA, with WDCA airing the majority of the games, according to sources. Households receiving conventional transmissions would be able to view only the 76 Fox-owned games.
The Orioles have two years remaining on their contract with Comcast SportsNet to produce and televise about 80 Orioles games a season. Starting in 2007, according to the plan under consideration, Orioles games would also be produced by Mid-Atlantic Sports.
Many of the critical details of Mid-Atlantic Sports could not be learned as of early last evening, although sources said the Orioles' share of the proposed network is well over 50 percent. Other questions include who would settle disagreements between the partners and how rights fees for the Nationals and Orioles would be set.
The rights fee that Mid-Atlantic Sports would pay to the Nationals, according to some experts, would be between $20 million and $30 million the first year. The eventual plan is for all the Orioles and Nationals games to be produced by Mid-Atlantic Sports and for all the games of both teams to be aired throughout the Baltimore-Washington region, sources said.
Baseball is trying to sell the Nationals, formerly known as the Montreal Expos, for $350 million to $400 million. The league's 29 owners bought the failing Expos from Jeffrey Loria for $120 million in February 2002. There are at least seven individuals or groups who want to buy the team, and a bad television deal could hurt the sale price.
The likelihood is that MLB will sell its interest in the regional sports network to the purchaser of the Nationals, according to sources.
Angelos had sought a majority share in a network, and the potential risks and rewards that go with it, as compensation for the negative effect of the Nationals on his franchise. After rights fees were paid, Angelos had proposed that the Orioles receive a majority of profits, if any.
Angelos and the Orioles could face an uphill battle persuading cable operators such as Comcast and satellite television providers such as DirecTV, to carry the fledgling network. The Orioles need to get the 24-hour network in place, including filling more than 8,000 hours of air time a year when the Nationals games are not being televised.
Regional sports networks have produced mixed results, with some huge successes, such as the Boston-based New England Sports Network, which reaches nearly 3.7 million homes in six states and carries more than 100 Red Sox games and more than 70 Boston Bruins games each season.
However, in Minnesota last year the Twins' owners started a regional sports network, called Victory One Sports, but Time Warner and other cable operators refused to carry it, saying the Twins were charging too much, dooming the venture and keeping Twins games off the air for a time last spring, angering fans. The Twins pulled the plug on the nascent network and re-upped with Fox's regional sports network in May.
Duffy Dyer, vice president and general manager of WTTG and WDCA, did not return phone calls on this subject yesterday.
The Nationals' season opener is Monday in Philadelphia, and MLB has yet to announce where and when the games will be aired on television.
The television deal is the last loose end in a financial compensation package that MLB has proposed to Angelos. The tentative agreement is the culmination of more than six months of intense negotiations between MLB President Robert DuPuy and Angelos. The talks began last September when MLB announced it would move the Expos to the District after the city agreed to build a $535 million stadium complex on the bank of the Anacostia River in Southeast Washington.
Angelos and DuPuy also did not return phone calls or e-mails seeking comment.
The deal also includes a guarantee that Angelos would fetch at least $365 million if he sold the Orioles; MLB would make up the difference should the sale not approach that number.
The Orioles estimate that the team will lose $30 million in ticket sales, concessions, advertising and parking revenue because of the Nationals' arrival.
The negotiations bogged down over the potentially lucrative Baltimore-Washington television market, which runs from Pennsylvania to the Virginia-North Carolina border, and from West Virginia to Delaware. The Baltimore-Washington market is one of the largest in the country, and its potential television revenue could have a huge impact on the financial health of both franchises.
Angelos acquired the broadcast rights to the Baltimore-Washington region when he bought the Baltimore club for $173 million in 1993, and he wanted to retain control of those rights through an Orioles-owned regional sports network.
MLB had been reluctant to unilaterally redistrict the Orioles' broadcast region, fearing a messy lawsuit by Angelos, who made a fortune as one of the nation's most successful trial lawyers. Top MLB officials believe they would ultimately prevail in a suit by Angelos, but the league wants to avoid it nevertheless.