Baltimore Orioles owner Peter Angelos and Major League Baseball yesterday agreed on a compensation deal that will allow Washington Nationals games to be seen on television, restart efforts to sell the Nationals and radically alter the Orioles’ economic prospects.
The deal calls for the creation of the Mid-Atlantic Sports Network (MASN), which will serve as the cable home of the Nationals immediately and the Orioles by no later than 2007.
Mr. Angelos and the Orioles will control a majority stake in MASN and the Nationals the remaining share. The agreement mandates equality in the quantity and quality of each team’s exposure on MASN.
The Nationals and Orioles now will be, in effect, business partners, a surprising twist given the rivalry between the two host cities and the passion with which Mr. Angelos fought the relocation of the club to Washington.
The Nationals will receive an annual rights fee, thought to be between $25 million and $30 million, that will provide the club with its second-largest source of revenue, behind ticket sales.
That fee will be reviewed every five years and reset to market rates. The Nationals retain in that review a right of appeal to Major League Baseball (MLB) Commissioner Bud Selig.
Mr. Angelos had been seeking protection from economic damage to the Orioles caused by the arrival of the Nationals in Washington.
MLB guaranteed as part of the agreement that Mr. Angelos will receive at least $365 million for the Orioles and his stake of MASN whenever he sells the franchise.
MLB is assuming that guarantee will not need to be invoked because of the rising values of baseball teams and regional sports networks.
However, Mr. Angelos did not receive a guarantee from MLB that his local revenue would exceed a certain level each year, as he had originally sought.
“We were dealing with essentially the intersection of the Orioles’ need to be protected coupled with our absolute demand that such protection come from the industry in general and not at the expense of the Nationals,” said Bob DuPuy, MLB’s president and lead negotiator. “It was a very tricky situation and took quite a bit of time to work through.
“But in the end, I think we’ve protected the Orioles fairly and actually created additional value for the Nationals.”
MLB and Mr. Angelos had argued for six months about control over the regional TV marketplace for baseball.
Mr. Angelos claimed a territory stretching from Pennsylvania to North Carolina. MLB argued that it owned all TV territories and licensed them out to individual teams.
The agreement reached yesterday gives the Nationals a home-TV territory “co-extensive” with that of the Orioles, with the regional sports network the most visible sign of that shared marketplace.