The battle over the Nationals’ TV rights on MASN between the NL East leaders and the AL East leading Orioles isn’t going away any time soon. On Monday, a New York Supreme Court judge extended an injunction that he granted two weeks ago, barring the Nationals from receiving the increased rights fee that a panel of three MLB owners agreed to in June, and also preventing the club from pulling their broadcast rights from MASN for the time being.
If you’re new to the conflict, here’s a Cliff’s Notes version: when the Nationals moved from Montreal to Washington in 2005, a deal between the Nationals and Orioles was reached, giving the Orioles a huge chunk of the revenue pie to start, while Washington’s stake would steadily increase before topping out at 33% ownership of the network. The deal also contained a provision allowing the Nationals to renegotiate their rights fees every five years, which they exercised. Thus, all hell has broken loose as the two teams continue to remain miles apart.
The injunction won’t change much immediately. The Nationals won’t get the $10 million-plus that is owed to them in back rights fees yet, though MASN did put up a $20 million bond to pay the Nationals in case the court ruled in Washington’s favor. The Nationals also can’t look for a non-MASN alternative (IE, CSN Mid-Atlantic) yet, and further delays will likely continue to doom them to MASN for the 2015 season, even if a final agreement is eventually reached.
This is clearly a very sensitive, and very unique, situation. How often in sports do you hear of one team in a market controlling the media rights of another team in the same sport in the market? Imagine if the Yankees owned 85% of YES and the Mets owned 15%, and the Yankees refused to let the Mets find an alternative (MSG or SNY, which wouldn’t exist in this hypothetical scenario) while forcing them to take a rights fee a fraction of what they should be receiving. It truly is madness, and screams “conflict of interest” to me.
Perhaps a better comparison is in Chicago, where White Sox owner Jerry Reinsdorf owns 40% of CSN Chicago (thanks to his dual ownership of the Sox and the Bulls) and Cubs owner Tom Ricketts owns 20% of the network. Yes, Reinsdorf’s part of the pie is bigger, but he’s not actively trying to screw over they Cubs – they get the same per game rate as the White Sox do, and both parties receive the same amount of ownership revenue from the baseball side of their operation.
Whatever ends up happening with this situation, one side isn’t going to be happy. I don’t think this dispute is going to get resolved any time soon, and I don’t think that the dispute is going to end with cake, cookies, and punch shared between the two sides.
The Nationals will end up with a higher rights fee, but not the exorbitant fee they’re seeking. As for a larger share in the network? I wouldn’t hold your breath for a 50/50 split. I could see the Orioles ceding to a situation where the Nationals have their ownership stake bumped to something like 25% immediately, with the caveat that the 1% yearly ownership increase disappears and the club is locked in to the new rights fee for something like 20 or 30 years. In that case, it would be a tremendous short-term gain for the Nationals at the cost of potential future earning. But wouldn’t that be better than what the team has now?