Shocking news was reported that the Washington Nationals are still trying to get paid on monies owed from MASN for the three year period that has passed from 2022-to-2024 totalling approximately $203 million. We also learned that last year, and continuing through 2026, the MASN TV rights payments owed to the Nationals would be reduced annually by 20 percent below the amount of the fees during 2023. In fact, the number for 2024 dropped below $60 million to $58.3 million per a filing with the clerk of the courts last week.
The Nationals submitted their figure based on Fair Market Value (see graphic below with the redactions), and the Orioles/MASN did not agree to the number which caused the arbitration clause to be initiated with a meeting on May 20, 2024, of the members of the Revenue Sharing Definitions Committee (the “RSDC”) after they met in New York, NY, to start the process of determining the rights fees for the 2022-to-2026 period.
The last decision that was confirmed by New York Supreme Court Justice Andrew Borrok in 2023 took less than 60-days, so the hope is that this current filing can be confirmed and paid promptly without any further legal proceedings. Both sides did agree that industry conditions were deteriorating within Regional Sports Networks (RSN), but a 20 percent reduction seems steep, especially at a time when the Nationals were trying to increase payroll spending.
The Orioles still own 75 percent of MASN with the Nationals owning 25 percent, giving the Orioles the full ability as majority owner to make the decisions on the operations of the network. The initial ownership was 90 percent in favor of the Orioles. In the next decade , the ownership will settle at 67 percent to the Orioles and 33 percent to the Nationals. However, the hope was that Commissioner Manfred would have used the sale of the Orioles last year from the Angelos family to the Rubenstein ownership group as a reason to end the MASN agreement. That clearly did not happen, and the Nationals cannot achieve what they consider to be a free market a fair rights number, rather again, they must rely on the RSDC to dictate the number.
“It was foreseeable that, to minimize the risk of bankruptcy, MASN would have sought, and the Nationals would have agreed to, a reduction in rights fees for 2024-2026; and a 20% cut in rights fees is consistent with what the market expected in 2021.”
— the RSDC wrote in their decision
Where does it say in the MASN agreement that they must minimize the risk of bankruptcy? The RSDC is supposed to determine fair market value for the Nationals — it is the MASN agreement that requires that the Orioles must get an equal annual rights payment per a clause that original Orioles’ principal owner Peter Angelos had included in that original agreement drafted and agreed to in 2004 (see excerpt at the bottom of the page).
Before the sale of the Orioles was finalized last year, and per the Baltimore Sun — there was hope that the MASN contract might be severed to give the Nats back their RSN autonomy. Again, that did not happen. It was just false hope.
For years, the Nationals have suffered in restrictive RSN revenues — and this 20 percent decrease in RSN TV revenue of over $14 million is a sizeable hit to the Nationals financial stability. But clearly there are other revenue streams that they are not taking advantage of and must take some of the blame for their own failures in not selling their stadium naming rights, a jersey patch sponsorship, and of course attendance that had been in a freefall until a slight increase in the 2024 season over the 2023 season.
If the Orioles are considered a small-market team by MLB definitions, why aren’t the Nationals? They receive the same annual TV rights BUT the Orioles due to their super-majority of ownership gets about 75 percent of the profit of MASN too! It is long overdue for Manfred to review this perk that the Orioles have -or- cut the Nationals in on it too. Those extra draft picks that the revenue sharing teams get along with other perks are being taken advantage of.
By the way, the Orioles outdrew the Nats in attendance by 2,281,129 to 1,967,302. To add to the revenue questions, Thom Loverro of the Washington Times claims the Orioles signed a jersey sponsorship deal for $15 million a year with T. Rowe Price.
By the way, per Forbes, the Orioles were the No. 1 most profitable team in baseball at $99 million in operating profit. On top of that, the Orioles have $100’s of millions to tap into from the Maryland Stadium Authority for stadium upgrades. But all of that certainly didn’t stop the Angelos family, the former Orioles owners, from whining as you can read:
“The hardest thing to do in sports is be a small-market team in baseball and be competitive, because everything is stacked against you — everything.”
— Orioles’ CEO John Angelos said in a New York Times article in August 2023
Due to the lucrative revenue sharing that has propped up teams like the Orioles, are the Nats the poorest team in baseball in terms of actual revenue being generated? We have certainly heard the stories of the team losing money, and the Lerner ownership group “writing personal checks” has to be a sign that business is getting worse instead of better.
What has happened due to the MASN decrease in RSN payments is that Washington’s competitive divide has been getting larger in the wrong direction, and creating a circular equation that has allowed the other team’s in the NL East (except the Marlins) to far outspend the Nationals just based on the RSN payouts. That higher revenue has allowed the Nats competitors to sign better players — and that in theory attracts more fans in higher attendance because winning teams attract more fans. All of that leads to: More Revenue
On payroll, the Nats are only the 23rd highest in baseball, and really needed to increase closer to league average at the very least. But most of the Nats issues on spending more on payroll was directly related to the low revenues — most of which is the low RSN fees and as mentioned the rest is self-inflicted by not taking advantage of completing a sale of stadium naming rights, jersey patch sponsorships, and a lack of a positive public perception of the team that will directly affect attendance.
The Nats hired Kimberly Bolt in late 2023 to the C-Suite as the team’s new Chief Marketing Officer reporting to Mike Carney, the Chief Revenue Officer. They have to see what we are seeing in the lack of revenue which is right in Carney’s job title. Revenue. Get the numbers up. Sign better players, and you will get the higher attendance and more revenue. Circular and perpetual motion.
MLB commissioner Rob Manfred has said that the league was prepared to help other teams if their payments were affected by Diamond Sports Group, but did he ever say he would help the Nationals? In February 2023, Manfred stated that the league is prepared for whatever happened to Diamond Sports Group, the parent company of 19 Bally Sports regional networks at the time.
In the meantime, the Nats’ fans should definitely address a lot of their anger at Manfred and MLB for putting the Nationals in such a bad spot. What other team in sports has their TV revenue controlled by a competing team in their market? Easy answer: Just the Washington Nationals.
