Six months after the Lerner family announced its intention to explore a sale of the Washington Nationals, Major League Baseball has inserted itself into the negotiations to resolve an issue that has hampered the franchise since it relocated to the nation’s capital: the Mid-Atlantic Sports Network.
But MLB is aware that any new owner would want to know how much money it would receive from MASN for the team’s regional media rights. An MLB official said Tuesday that it is engaged in negotiating certainty about that revenue going forward — a step that could give Leonsis’s group confidence to move forward with its bid.
A spokesperson for Monumental Sports, which owns the NBA’s Wizards, the WNBA’s Mystics and the NHL’s Capitals, declined to comment.
The Baltimore Orioles control MASN, which owns the Nationals’ local media rights. That agreement, reached in 2005 as part of the deal that allowed MLB to relocate the Montreal Expos to Washington, has been acrimonious from the start and has led to a decade of litigation over rights fees owed to the Nationals. In 2020, a New York state court ruled the network owes the Nationals some $100 million in backpay, though the network has appealed.
Though the battle over the previous rights fees lingers between the Lerners and the family of Peter A. Angelos, which owns the Orioles, MLB’s current effort is to make sure a potential buyer knows what it would receive in what is an important revenue stream for any professional sports franchise. Since they bought the team from MLB in 2006, the Lerners haven’t had that certainty. Leonsis, people involved in the process said, would want that.
“It’s well-documented that MASN is an issue — a contentious issue,” a person who has knowledge of the situation said Monday, speaking on the condition of anonymity because the person was not authorized to discuss the matter publicly. “MLB would like to find a resolution. The Nats would like to find a resolution. Hopefully, the Orioles would like to find a resolution.”
Though Mark Lerner, the Nationals’ managing principal partner, has told associates in recent months that he would like his club to fetch something in the range of the New York Mets’ sale price of $2.4 billion, some have cautioned Lerner that the MASN situation could affect a potential sale price, according to people familiar with the discussions. Steve Cohen, who bought the Mets in 2020, did not acquire the team’s television rights, and he is reportedly interested in buying SportsNet New York, which owns them. There is no easy path for any new owners of the Nationals to gain control of the team’s local TV rights.
The terms of the MASN accord have long frustrated both the Lerners and Nationals fans, who bemoan the presentation of games on MASN and the fights over the rights fees. But the agreement remains a key piece of any sale. According to the 2005 settlement agreement between the Orioles and MLB, “all relevant terms, conditions and obligations of this Agreement shall be made known to any purchaser(s) of the Nationals now, and in the future, and that the assumption of the Nationals’ obligations under this Agreement shall be made a binding condition of the purchase of the Nationals’ franchise.”
The agreement continues, “The Nationals and Major League Baseball represent and warrant that they shall take such other steps as reasonably may be necessary to bind any subsequent purchaser(s) of the Nationals to the terms and conditions set forth in this Agreement.”
Marc Ganis, president of Sportscorp, a consulting agency that advised the Chicago Tribune when it sold the Chicago Cubs in 2009, said in an interview that he was surprised that MASN would be a sticking point in any sale because the deal is “interminable, and if that reduces the value it should be reflected in the sale price.”
In other words, the MASN deal is transferrable, so what is left to figure out is how much that impacts the value of the team. MLB has a high interest in having the Nationals sell for a premium price, and resolving the MASN rights fee issue would be a significant step toward solidifying the club’s value.
Regardless of how the MASN situation affects the eventual price, some people familiar with the sale process believe it is affecting the timeline. During the summer, there had been some hope a new owner could be selected by November. But barring a major shift in circumstances, the Nationals won’t begin their offseason with a new ownership group in place — or even, it seems, with one on the verge.
Though several people in and around the Lerners and the Nationals believe Leonsis is the leader, one person familiar with the process cautioned that several outcomes are still possible — that the Lerners could take on a minority investor, which some private equity firms have done with other professional sports franchises; that an individual could be brought in as a minority investor with the intent of becoming majority owner over time; or that the Lerners could hold on to the franchise altogether.
But MLB would not be working on determining revenue from MASN for a future owner if it didn’t have a serious candidate to purchase the franchise.
Meanwhile, the business of the offseason — both on the business and baseball sides — awaits. While the Lerner family made the decision to keep President of Baseball Operations Mike Rizzo and Manager Dave Martinez under contract through next year, neither would seem to be guaranteed any longevity without clarity about who will own the team long term.
Two members of the front office who spoke on the condition of anonymity to discuss the subject candidly have indicated a sense of a “lame-duck offseason” because of the uncertainty over who will own the team, how much the Lerners will be willing to spend if they still own the team and when any of that could change.
Such uncertainty likely will limit the Nationals’ spending on payroll. They currently have just over $94 million committed to their projected Opening Day roster next season, per Cot’s Baseball Contracts. Two-thirds of that is committed to two players, Stephen Strasburg and Patrick Corbin, who are each owed $35 million in 2024.