The wrangling over the Washington Nationals’ television rights fees isn’t for those who loathe minutia. Finding any measure of sympathy in a fight that essentially pits gazillionaire owners Peter Angelos of the Orioles and Ted Lerner of the Nationals against each other is difficult. Fans could treat all the legalese and court filings as white noise and ask, rightly: How does this affect me?
Well, fans will see those effects this season, in the form of who takes the field and who doesn’t. People involved in free-agent talks with the Nationals say the team cites the dispute — which centers around how much income it feels it is due in rights fees from the Orioles-controlled Mid-Atlantic Sports Network — as part of contract negotiations. The Nationals structure their offers with the dispute as an influence – frequently making their proposals less attractive than the total dollar value might suggest.
Last month, that argument made its way into the legal case, in which both sides are appealing a November decision by a New York Supreme Court judge that tossed out a ruling by an MLB panel that the Nationals deserved higher rights fees from MASN. Ed Cohen, an owner of the Nationals and Lerner’s son-in-law who is serving as the club’s lead dog in the case, stated plainly in an affidavit: “Without this added and steady income, the Nationals cannot bring full economic confidence to investments in multi-year player contracts to keep up with the fierce competition for top players – especially when such control over finances is in the hands of a neighboring club.”
That could well sound like a major league ownership group crying poor, or an ownership group ignoring the fact that it purchased the club from Major League Baseball knowing there could be conflict with Angelos down the road. Those points could be debated till Opening Day and beyond.
What we know, according to people on both sides of the negotiating table, is the Nationals’ pursuit of top free agents this winter consisted of heavily deferred contracts, deals that are trumped easily by more traditional baseball offers.
This has all led to what is widely perceived as a failure of an offseason for Washington. The Nationals pursued Ben Zobrist and Jason Heyward and Yoenis Cespedes – and, to some degree, other players – and were spurned. In some corners, this can be painted as a problem with the club’s clubhouse culture. Fairly or not, that culture currently is defined largely by footage of Jonathan Papelbon’s hand grabbing the throat of right fielder Bryce Harper, the soon-to-be National League MVP, in an infamous dugout confrontation in September. Roll that tape, list the players who have signed elsewhere, and it’s easy to put two-and-two together and believe that Washington’s clubhouse environment is solely responsible for its inability to land players.
Yet as one player said recently: “The problem was the manager, and they changed the manager.” Dusty Baker, the replacement for Matt Williams, has a reputation for sorting out clubhouse issues.
So if the clubhouse isn’t the driving issue, then why did the Nationals, after going after so many big-name targets, land just Daniel Murphy, their new second baseman? As someone once said, “Follow the money.” (Who was that again?)
Take the most recent deal: Cespedes’s re-signing with the Mets for three years and $75 million. The Nationals’ offer, according to people familiar with the negotiations, was for five years and $110 million – but that money would have been paid out over more than a decade. In Cespedes’s deal with the Mets, he gets a $10-million signing bonus and makes $17.5 million in 2016 – after which he has an opt-out. In the Nats’ offer, he would have made $7 million in 2016.
So Cespedes’s choices: Guarantee himself $27.5 million in one season with the opportunity to hit free agency again next offseason, take $75 million from 2016-18 and then re-enter free agency at age 33, or take the Nats’ offer of, technically, more total money and be in Washington until age 35. People on both sides of the equation believe Cespedes’s choice was easy: The Mets’ deal was better. Plus, if, say, Cespedes was still due $10 million from the Nationals in 2025 – well, that’s not the same as $10 million today.
This was how the Nationals structured all their major offers this winter, similar to the deal with which they landed pitcher Max Scherzer a year ago – a seven-year, $210-million contract that will be paid over 14 years. Heyward, their primary target in the outfield this offseason, received a $200-million offer from Washington, but signed for eight years and $184 million with the Chicago Cubs. But one person familiar with the Nationals’ offer called it “the most complicated deferral I’ve ever heard of,” with the money to be paid out over 16 years. Even Murphy, who is signed through 2018, will be paid through 2020.
(This means the Nationals’ current approach will have ramifications for years to come. When Scherzer’s deal is up following the 2020 season, there’s going to be a $15 million line item on the 2021 budget – with no corresponding player on the roster. Even if $15 million then isn’t worth the same as $15 million now – well, it’s real money, and it has to be paid, and it’s easy to see how that could prevent the club from buying, say, a free-agent reliever or two that year because it’s still paying money to Scherzer on the deferred deal.)
Baseball contracts, unlike those in the NFL, are normally easy to understand. When Jayson Werth signed a seven-year, $126-million deal with the Nats prior to the 2011 season, there was little mystery. Yes, his annual salary increased gradually over the course of the deal – from just more than $10.5 million in 2011 to $21 million in both 2016 and ’17, by which time the Nationals figured the MASN issue would be resolved. But it was otherwise a straightforward baseball contract: When Werth is done playing with the Nationals, the Nationals are done paying Werth.
Now, the Nationals are conducting their business differently, and citing their convoluted television situation as the reason why.
“In other words,” Cohen wrote, “MASN’s refusal to pay the fair market value fees required under the contract forces the Nationals either to have to borrow more money to fund cash flow needs (which comes with its own costs) or to limit or forego the sorts of investments the Nationals should be making to build the club’s business for the future.”
Does the MASN entanglement make for compelling hot stove talk? Not at all. But so long as the Nationals see it as a factor in what they offer players, it will have an impact on the team that takes the field.