New TV Fees for Washington Nationals Will Boost Them and Crush Baltimore Orioles
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TV money is the new power play in baseball.
Well, maybe it's not "new," but signing big-money contracts for television rights has changed the balance of power in MLB in a very short time.
Would the Los Angeles Angels have been able to sign Albert Pujols and C.J. Wilson without the reported $3 billion that the team received from Fox Sports for its latest TV deal? That's expected to bring in more than $150 million in annual revenue, and was a big reason the Angels could sign premium free agent talent.
Most expect the Los Angeles Dodgers to become major players in the free agent market with new ownership. Not just because of the wealth of the ownership group, but because of the huge TV deal the team is expected to work out. If the Angels can get $3 billion, how much can the Dodgers get? The Los Angeles Times reports that a new TV deal could be worth $4 billion.
The Washington Nationals wouldn't derive anywhere near that kind of money in their TV deal with MASN. But they're hoping to get much, much more than they receive in their current shared arrangement with the Baltimore Orioles.
As reported by Fox Sports' Ken Rosenthal, an independent panel of baseball officials is meeting to determine how much in annual rights fees the Nationals should receive from MASN. Under the current shared arrangement with the Orioles, the Nats get 13 percent of TV revenues while the O's hoard 87 percent.
That was part of the price the Nats had to pay to placate Orioles owner Peter Angelos, who was against another team moving into the metro D.C. market.
MLB was willing to oblige Angelos at the time so the Montreal Expos could be moved to D.C. But the contract always had a stipulation to alter the rights fees based on market rates every five years.
And therein lies the dispute.
What exactly are the new market rates? The Nationals and Orioles haven't been able to agree on that, which is why a panel is being asked to hash this argument out.
According to Rosenthal, the Nats currently receive $29 million from TV rights fees. Considering they play in the nation's ninth-largest media market, that's a pretty low sum. In comparison, Rosenthal points out that the San Diego Padres, playing in the 28th-ranked market, will get $50 million per year from their new TV deal with Fox Sports San Diego.
But if the panel decides in their favor, the Nationals could double or triple those revenues. Obviously, $90 million isn't close to the $150 million that the Angels reportedly receive. But how much of a boost would that provide to a team whose payroll is around $90 million this year, according to Cot's Contracts?
Would the Nationals have been able to sign Prince Fielder with those additional revenues? There's no guarantee of that, of course. But general manager Mike Rizzo would likely have been able to make a more competitive offer than the Dodgers and Detroit Tigers for Fielder's services. And that could have made all the difference.
The Nationals have already become the higher profile team in the D.C. market, whether Angelos wants to admit it or not.
The Nats are a team on the rise, expected to contend for the National League East title or wild card playoff spot. The Orioles, meanwhile, are stuck in a last-place rut in the AL East, with little hope of surpassing their four division rivals in the near future.
New, exciting stars like Stephen Strasburg, Gio Gonzalez, Jayson Werth and, eventually, Bryce Harper make the Nats an attractive TV draw. Who can the Orioles offer in comparison? Nick Markakis? Mark Reynolds? Brian Matusz?
The Orioles would love to bring in a top-tier free agent, but no stars are willing to sign there. Mark Teixeira and Victor Martinez are among the big names the O's coveted, but those players opted to play elsewhere. Even Edwin Jackson decided he'd rather pitch in D.C. than Baltimore.
Unfortunately, that situation isn't going to change if some of the O's TV revenues are taken away.
Angelos can't be blamed for wanting to hoard all the TV revenues he can. After all, that's the deal MLB gave him. But he shouldn't be allowed to stand in the way of progress, in the way of a team that's establishing its own footprint and could be a major league power in the years to come.
The Nats shouldn't be deprived of a revenue source that's making plenty of teams throughout baseball competitive with the traditional power markets. Baseball's panel will likely see it that way in this dispute, as well.
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