{"id":28254,"date":"2014-07-08T16:23:47","date_gmt":"2014-07-08T20:23:47","guid":{"rendered":"http:\/\/seamheads.com\/?p=28254"},"modified":"2014-07-09T11:34:09","modified_gmt":"2014-07-09T15:34:09","slug":"when-will-baltimore-be-forced-to-quit-stealing-tv-revenues-in-the-mid-atlantic","status":"publish","type":"post","link":"https:\/\/seamheads.com\/blog\/2014\/07\/08\/when-will-baltimore-be-forced-to-quit-stealing-tv-revenues-in-the-mid-atlantic\/","title":{"rendered":"When Will Baltimore Be Forced to Quit Stealing TV Revenues in the Mid-Atlantic?"},"content":{"rendered":"

It is easiest to steal money when no one is watching. And so Peter Angelos has had easy pickings for almost a decade as he took TV revenues away from the Mid-Atlantic Sports Network (MASN) that broadcasts games for the Baltimore Orioles and Washington Nationals on local cable outlets. Television revenues are the name of the game in every sport and they dictate winners and losers more than any other variable, despite the success Oakland is having this season. The growth of TV money in recent years has been exponential and it favors the large market teams increasingly. MLB, Inc. has tried to address the issue of competitive balance as affected by this huge influx of funds, but what is happening in Washington, DC defies economic logic, leaving good sense and moral suasion as beggars at the door.<\/p>\n

As the matter now stands, the Washington Nationals get $29 million in annual television revenues from MASN. That is based on the 2005 contract–negotiated on behalf of Washington by MLB when the team moved from Montreal–that gave DC 13 percent of the revenue and Baltimore 87 percent. With the Dodgers and other teams negotiating huge contracts with cable TV stations, it became clear that such a lopsided agreement in Washington made little sense and so the Commissioner in his infinite wisdom gave the Orioles and the Nationals two years to negotiate something fairer.<\/p>\n

Peter Angelos, the owner of the Orioles, had no motivation to negotiate for a single second and he spent the entire two years raking in his 87 percent. It is unclear how much money the Orioles take away, but it would appear to be in the neighborhood of five times the Nationals amount. It is not bad money when the other guy is doing the work. A Forbes article <\/a>explains the intrinsic media values of the two teams with efficiency. Washington is the 8th largest TV market and Baltimore is the 27th according to Forbes. Washington is therefore the source of a lion’s share of the money being made, not Baltimore, but Baltimore is the one getting all of the goody.<\/p>\n

Despite its relative small size as a city and its low ranking in media market size, in an article by Bloomberg News in 2013, the Baltimore franchise is ranked seventh in value overall, largely on their lion’s share of the Regional Sports Network that Bloomberg values at $492 million for Baltimore. Washington’s Regional Sports Network value in the same article is $108 million–roughly 20 percent of Baltimore’s and their overall value ranks 13th. Baltimore’s ranking as the 7th richest franchise draws largely from its ability to skim money from Washington, something that Angelos had been doing quite well until MLB had the audacity to award the 8th largest media market in the country its own team.<\/p>\n

MLB has decreed that with the two sides at a negotiating impasse–which I assume they do with a straight face–the matter will be decided by a panel of “Baseball Officials.” They will move with some speed according to<\/a> Ken Rosenthal, but given that no one was concerned about moving the issue forward over the past two years, it is difficult to guess what that really means.<\/p>\n

Washington, and its current ownership group the Lerner Family, has asked for $100 million of the overall pie. It is a fair number and one is surprised that Rosenthal sees something smaller as a reasonable figure. Rosenthal’s article also lets out of the bag the provisions of the most recent Collective Bargaining Agreement between the MLBPA and the owners that dictates the top 15 TV markets will receive no revenue sharing in 2016. The Washington Nationals had been compensated for their minescule piece of the TV pie by gate receipts where they ranked 11th and revenue sharing, but that formula will not fly in the future.<\/p>\n

Taking Rosenthal’s rosiest scenario–that Washington gets three times its current takeaway from MASN revenues–then the Nationals will get $81 million from MASN, although the Orioles would likely continue to take a majority share. What will hurt Washington is that in 2016 it will no longer get revenue sharing from Major League Baseball. The money is substantial by any measure and many teams have been receiving $30-40 million annually. But now that half of the teams will receive nothing, the amount going to small market franchises will increase.<\/p>\n

Baltimore, as the 27th largest market of the 30 major league teams not only will continue to get revenue sharing, but is likely to see its share increase. So Baltimore is getting it coming and going. They get revenue sharing money for being a small market team, but they continue to receive the majority of funds from one of the larger media markets in the country. Stealing money honestly has always been the way to get ahead and Peter Angelos is to be admired for stealing it with so many people literally, “watching.”<\/p>\n

If the “Baseball Officials” at MLB do not move with some haste, it is possible that lawsuits will fly like “bombs bursting in air” over Ft. McHenry. The Lerners have always been a litigious lot and while MLB can continue to deny them the All-Star Game and other goodies, the size of the injustice will begin to demand redress at some point regardless the peripheral costs.<\/p>\n

What continues to amaze some in the area is how willingly some Washington natives continue to slit their own throats. Inter-league play dictates a four game series between Washington and Baltimore and the first game was held last night in DC. Of the 35,000 fans, as many as one-in-four was rooting for the Orioles. Many of them drove down from the  Charm City, but a substantial number are from the DC metro area.<\/p>\n

When baseball left the DC area, Washingtonians began making the drive to Baltimore to get their professional baseball during an era when the Orioles fielded fine teams fronted by Cal Ripken, Eddie Murray, Jim Palmer and Brooks Robinson. Those loyalties have been slow to die as is witnessed by the orange-hued crowds that gather even now in Washington. The disgust many felt for Baltimore owner, Peter Angelos, made the transition to the Washington Nationals relatively easy, but a large contingent of holdouts continue.<\/p>\n

The assumption is that over time the Washington Nationals will win back those loyalties as they craft their own winning tradition. When the St. Louis Browns move to Baltimore as the Orioles in 1954–with the blessing of then Nationals owner, Clark Griffith–it took them only 12 years to win their first World Series Championship in 1966. Washington is in its tenth year as a franchise and improving steadily for the moment. Still, as the game last night indicated, the Orioles continue to hold the upper hand. They have the TV money they are stealing; they have the fans who will travel in support of their team; and they have a lineup that can crush the ball when given the chance.<\/p>\n

That situation has begun to stir passions and while there is no hot rebellion likely to occur in the near future, if a fair distribution of MASN proceeds does not occur soon, the climate for games in both towns may get hotter than the sultry night we had at Nationals Park on Monday.<\/p>\n","protected":false},"excerpt":{"rendered":"

It is easiest to steal money when no one is watching. And so Peter Angelos has had easy pickings for almost a decade as he took TV revenues away from the Mid-Atlantic Sports Network (MASN) that broadcasts games for the Baltimore Orioles and Washington Nationals on local cable outlets. Television revenues are the name of the game […]<\/p>\n","protected":false},"author":73,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-28254","post","type-post","status-publish","format-standard","hentry","category-general"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t