Prospective Washington Nationals owner Bill Collins said yesterday it will be “very difficult” for him to pay a price above $400 million without the Nationals regaining full control of their local broadcast rights, a statement that could put him out of step in the ongoing auction for the club.
Speaking on WTOP-Radio, Collins said, “If [the price] gets above $400 million, I really believe that those broadcast rights would have to be given back to the Nationals ownership group. Having only a partial ownership in [the Mid-Atlantic Sports Network] really takes a significant amount of the value proposition away from the ownership group. Not to control your own broadcast rights, like the other 29 owners in Major League Baseball, is something very difficult to swallow.”
But several well-placed industry sources said the Nationals auction is now headed strongly toward $450 million. More importantly, MLB has no intention of seeking a dismantling of MASN, the Baltimore Orioles-controlled TV operation that intends to be the regional home of both the Orioles and Nationals.
MLB, current owners of the Nationals, and Orioles owner Peter Angelos spent six months in arduous negotiations creating the structure to link the Orioles and Nationals TV rights under the MASN umbrella, establishing co-extensive market territories for the clubs in the process. The Orioles control 90 percent of MASN equity, with that stake falling to no lower than 67 percent over time.
And this week, the Orioles and MLB appeared together in Montgomery County Circuit Court to defend themselves successfully against a breach of contract lawsuit from Comcast Corp. stemming from the rise of MASN.
“I don’t think there’s any way this stays under $400 million,” said another bidder for the Nationals, speaking on the condition of anonymity. “And I think it’s even more certain these TV rights stay linked for at least the foreseeable future, certainly after what happened in court the other day.”
Speaking later yesterday with The Washington Times, Collins stood behind both his earlier comments and his chances of landing the club. Collins is aligned with Sallie Mae chairman Albert Lord in his bid.
“I don’t think there’s anybody else [in the field] that has better relations with Major League Baseball than us, or is better matched to work with the various levels of governments here,” Collins said. “We continue to be very upbeat.”
Soon after MLB and Angelos finished their TV deal in late March, most of the Nationals bidders held a similarly negative view of the MASN ownership structure as Collins. But over time, several factors became evident to leave most of the suitors more sanguine, or at least more tolerant, about the situation.
First, the MLB-Angelos agreement calls for both teams to distribute their local pay TV games under the MASN umbrella in perpetuity. Second, the agreement does call for a periodic readjustment of the Nationals’ rights fee payment from MASN to market rates, and those rights to stay equal with those paid to Baltimore. Similarly, the agreement calls for parity in the editorial and technical presentation on TV of both clubs, though some believe the legal language to that point is somewhat vague.
And third, the MASN situation is simply not as big a concern for some bidders as efforts to build the club’s new stadium in Southeast.
MLB intends to name the new Nationals owner in late August. What likely will happen is MLB will set a desired sale price, believed to be near the $450 million figure, and then choose among those groups meeting that amount.
At that point, nonmonetary considerations such as political affiliations and involvement in charitable activities will be considered. To that end, the Washington Baseball Club, led by Fred Malek and Jeffrey Zients, is still seen as a strong favorite in the race, with local developer Mark Lerner lurking close behind.
Also said to be strongly in the mix are local philanthropist Jonathan Ledecky and developer Franklin Haney Sr.