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The Washington Nationals might be for sale. Then what?

The Lerners, who own the team, have indicated they may explore selling the Nationals. The Post's Chelsea Janes explains what the sale could mean for fans. (Video: Joshua Carroll/The Washington Post)
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Since big league baseball returned to Washington in 2005 after a 33-year absence, the city has known one ownership group: the Lerner family, led by patriarch and real estate mogul Ted. Since buying the franchise from Major League Baseball, which moved it from Montreal, the Lerners oversaw the construction of a new stadium and watched the area around it grow. They built a baseball operation that became an annual contender for the better part of a decade and won the World Series in 2019.

On Monday, the family declared its intent to explore changes to the team’s ownership structure, including the possibility of a sale. While Mark Lerner, Ted’s son and the team’s managing principal owner, was quick to call the move “an exploratory process,” the family has hired New York investment bank Allen & Company, which has managed the recent sales of several sports franchises, to research potential investors or buyers.

A sale of the team would have far-reaching ramifications, from how the team is run on and off the field to a wider impact throughout baseball.

The Lerners paid $450 million for the team in 2006, and its value has increased significantly since. The Lerners’ strong ties to the area were considered a significant asset to their bid then, but that wouldn’t necessarily be a requirement for a new buyer. Any sale needs to be approved by the other 29 MLB owners, who gather four times per year at owners meetings.

The most recent such meetings were in February, in the midst of the lockout, at which point the Lerners’ intent was not on the radar. The next ones are in June, probably too soon to have a vote on a potential suitor. The subsequent meetings are in November and then February, according to a person familiar with the schedule, so even if the Lerners decide to sell and that process goes relatively smoothly, that leaves plenty of time to ponder the most pertinent questions.

Who are potential buyers?

Amazon founder Jeff Bezos’s name regularly comes up whenever pro sports teams are on the market, and given that Bezos owns the largest house in Washington and Amazon is opening its second headquarters in Arlington, it’s no surprise that his name surfaced speculatively in nearly every conversation with people connected to baseball or the Nationals. (Bezos also owns The Washington Post.)

The Lerner family will explore selling the Washington Nationals

Monumental Sports & Entertainment — the D.C.-based sports and entertainment conglomerate led by Ted Leonsis that controls the Washington Capitals, Wizards and Mystics — is another possibility. A Monumental spokesperson declined to comment on Leonsis’s interest in the Nationals.

Five years ago, Leonsis brought another billionaire into the fold when Laurene Powell Jobs bought a large stake in Monumental, estimated to be worth hundreds of millions of dollars. Leonsis also has been a vocal proponent of sports betting, which many see as important to baseball’s economic future.

Josh Harris and David Blitzer, owners of the New Jersey Devils and Philadelphia 76ers, have shown interest in MLB ownership. Harris and Blitzer were one of the groups bidding against Steve Cohen for the New York Mets.

David Rubenstein, co-founder and co-chairman of private investment firm Carlyle Group, has strong ties to the area. The chairman of the board of trustees for the Kennedy Center and chairman of the board of directors for the Council on Foreign Relations, Rubenstein is also the namesake donor for the giant panda habitat at the National Zoo. At 72, he might be considered old to take over as a new owner, but for context, Ted Lerner was 80 when his group’s bid was accepted for the Nationals in 2006, beating out a group led by Fred Malek and Jeff Zients, who had tried for years to bring baseball back to D.C. Zients has been heading the coronavirus response for the Biden administration, though he is expected to leave the White House this month.

What is the team worth?

As with real estate, recent comparable sales inform the estimated values. The Kansas City Royals, who play in a much smaller market, recently sold for approximately $1 billion. The competitively sagging, low-attendance Miami Marlins sold for roughly $1.3 billion in 2018. The New York Mets sold for $2.4 billion in 2020. Forbes currently values the Nationals at around $2 billion.

Marc Ganis, president of Sportscorps, a consulting agency that advised the Chicago Tribune when it sold the Chicago Cubs in 2009, agreed with the $2 billion figure because of the growth of the D.C. region and the surrounding political influence.

“The whole Washington area is awash in wealthy people,” Ganis said. “It’s the seat of power, and the team can be used to interact with politicians, lobbyists — and very importantly media, too.”

The hype is already building for the free-spending Mets and unapologetic owner Steve Cohen

The long-term financial health of baseball elicited a range of opinions. On one hand, MLB has generous, long-term national media rights deals and a new collective bargaining agreement with its players. On the other, its fan base is considerably older than, say, the NBA’s or the NFL’s.

“At other points in time I would have said it’s a great investment,” said Andrew Zimbalist, a sports economist at Smith College who has consulted with buyers and sellers of baseball teams. “My concerns are around streaming and broadcasting and whether or not that will be as lucrative as the model of cable companies. There is more fragmentation and continuing issues about youth and baseball fandom.”

Another factor is Nationals Park. The stadium is almost 15 years old and is owned by the city, so any renovations would have to be negotiated.

What about MASN and the Orioles?

This is a unique complication and perhaps the biggest.

The Nationals’ dispute with the Baltimore Orioles over their share of television revenue from games broadcast on Mid-Atlantic Sports Network has loomed over the franchise since its arrival in Washington. MASN was created as part of a compromise with the Orioles, who asserted they were surrendering geographic territory to a new team. The network, controlled by the Orioles, owns the local TV rights to the Nationals in perpetuity, meaning the Nationals cannot sell them on the open market as other teams can.

Local TV revenue can account for 20 to 50 percent of an MLB team’s revenue, according to multiple people familiar with the figures.

The Nationals and MASN have been engaged in a decade-long legal fight over the value of their broadcast rights, and that uncertainty could be a significant hindrance to any sale.

“If I’m a buyer, I really want to figure out where that’s headed,” sports economist Dan Rascher said. “I don’t want to buy my way into an ongoing lawsuit.”

Ganis was less concerned about the MASN dispute suppressing the team’s value.

Adding to the intrigue is speculation that the Angelos family may be preparing to put the Orioles on the market, too. If they do, perhaps a deal to end the MASN stalemate could come, too. An Orioles spokesperson did not reply to a request for comment.

What does it mean for the team?

While fans always wanted the Lerners to spend more money on players, the Nationals were in MLB’s upper third of payroll for much of the past decade. After last year’s sell-off, they began this season with the 16th-highest Opening Day payroll ($138.1 million), according to Cot’s Baseball Contracts, the first time since 2012 they were in the bottom half of MLB. A new owner’s relative desire to spend would be influenced by two significant factors.

First, there are existing debts, which include deferred payments committed to Max Scherzer and Stephen Strasburg that add up to nearly $200 million — $90 million in deferred money owed to Scherzer from 2022 to 2027 and just shy of $100 million owed to Strasburg in the years after his deal expires in 2026.

Then there’s Juan Soto, widely considered one of the top young players in the game. Soto rejected the Nationals’ offer of $350 million over 13 years this offseason. He and his agent, Scott Boras, probably wouldn’t consider signing any contract that doesn’t approach $500 million rather than exploring free agency after the 2024 season.

An ownership change could affect Soto’s willingness to stay, too. Soto has indicated a desire to win and was unhappy when the Nationals sold off their stars at last year’s trade deadline. He may want to see what a new ownership group would commit to the franchise before making any decisions about his future.

Soto will be watching the developments over the next several months intently — and everyone else with an interest in Washington baseball will, too.