Friday, April 29, 2005

The MASN Mess'n

From bad to worse?
Baltimore Orioles owner Peter Angelos will receive a payment of $75 million for the Washington Nationals' 10 percent stake in the Mid-Atlantic Sports Network, the new TV venture formed to air Nationals and Orioles games.

Major League Baseball (MLB) will pay the first $37.5 million of the fee due June 30, according to sources familiar with the agreement that MLB struck with Mr. Angelos in March.

A senior baseball official said that MLB's central office will make the payment.

However, some groups seeking to buy the Nationals fear that MLB, which owns the Nationals, will seek to indirectly recoup the money when it auctions off the team this year.

Who will make the second payment of $37.5 million, due June 30, 2006, is not clear. Some sources think the Nationals' new owners ultimately will be responsible for the full $75 million.

The $75 MM payment represents the 10% stake in MASN the Nationals 'earned' as part of the Angelos bribe. There's no word on whether the serial numbers of the bills need to be non-consecutive, or whether they need to exchange it in front of the Paper Moon Diner, or if they can just stuff it in a duffle bag in a locker at the newly-renamed Thurgood Marshall Airport.

Either way, my once-respectable, but now highly-dubious math skills tell me, that they're valuing MASN at $750 MM. Those same eroded math skillzzz tell me that's a freakin' quarter of a freakin' billion dollars!

I'm certainly no expert in TV network valuation, but doesn't that seem a little.... high?

The always-valuable (but not $750 MM worth of value) Eric Fisher answers that in a diplomatic way, to say the least:
[The high price of the network is] a reflection of the optimism that MLB and the Orioles have in the venture and the growing importance of team-owned regional TV networks in professional sports.
An 80 percent stake in the New England Sports Network, for example, added an estimated $250 million to $300 million to the sale of the Boston Red Sox three years ago.

Yeah... maybe I AM an expert in TV valuation. A network that has carriage everywhere from Stamford to Burlington, all the way to Quoddy Head and a team that's one of the most popular draw in the entire country, let alone New England, is valued at three times as much? I don't know how the populations match up -- and I don't really want to guess -- but I feel comfortable assuming (Knowing full-well that that could make an ass out of you and me) that MASN's isn't reaching three times the number of people as NESN.

As Jack Evans says in the article, "Why would [MLB] make a deal like that? It doesn't make any sense. They're bidding against themselves."

The article creates a few more troubling questions -- ones that have lingered in my mind, but still don't have any sort of firm resolution. This one has always made me wonder:
The agreement between Mr. Angelos and MLB mandates parity in the TV distribution of the games of both clubs. The Orioles plan to move their local pay TV games from Comcast SportsNet to MASN in 2007, and the network intends to show the same number of games for each club and provide equal exposure for each in the other's market

If they want to show the same number of games and have equal coverage, that seems great. Yet, unless they're able to clear two stations, or paw off some of their coverage to local affiliates, which would seemingly defeat the point of MASN, doesn't this mean there'll be fewer Nationals games and Orioles games on TV? 90% of their games will take place at the same time.
And if there's equal exposure in both markets, one's going to have to be relegated to the ether, taking place only for those fans actually in the stands.

In NY, where springtime is hell with the Yankees, Mets, Nets, Rangers, Islanders, Knicks, Devils all playing, they're good about clearing space for the secondary broadcasts.

But here, MASN is working with a clearly pissed-off Comcast, who has less interest in airing MASN than showing that God Awful "Faith Walk" public access show with the American Idol reject gospel singers 'singers'.

Getting them to air MASN alone is proving to be difficult enough. Clearing an extra station ain't gonna be easy!

And Direct TV is not an option for most people either. Many apartment and condo dwellers simply don't have access. Comcast knows that.

So, for now, as it has been, it's MLB.TV. It's a start. But, hopefully not the end.


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