Worst TV Deal Ever

For the fullest effect, imagine Comic Book Guy reading the title of this post.

When Major League Baseball relocated the Montreal Expos franchise to the Washington market, one of the main points of contention to such a move was how MLB was going to appease the concerns of Baltimore Orioles’ owner Peter Angelos. Angelos argued, rightfully so, that moving a second team into his market would cut into his profits. So, in the process of completing the relocation of the newly named Nationals Angelos was awarded an overwhelming unfair stake in the local television agreements for broadcasting rights.

Fortunately for the Nationals, part of that original agreement contained a clause which permitted the team to renegotiate certain aspects of the deal after five years. That five year period is now up.

Tracee Hamilton at The Washington Post brings our attention to this fact, discussing some possibilities for how this could ultimately affect the organization moving forward. According to her sources, the existing agreement resulted in roughly $29 Million in revenue for the team this past season. Hamilton continues on to say that the team could potentially hope for double or triple that figure upon the completion of this “re-set”.

An increase in revenues of this magnitude could be highly impactful for any franchise, but would certainly be a welcomed addition in Washington. Most would assume that this new revenue would go directly towards the team’s payroll, however I don’t think the answer is quite that simple. I think that last winter’s signing of Jayson Werth showed that ownership is willing to spend the money on free agents in order to compliment the team’s younger core. It showed the team is moving in the right direction. But, even knowing that the deal could be renegotiated down the road at that time, it wouldn’t have made sense to sign Werth to that contract unless they already felt comfortable with the added payroll. So, I don’t see this as being totally payroll related.

This extra revenue, however, would go back into the team in other ways. It could be used on improving player development and conditioning programs for the minor league systems. Improving the amenities for the fans at Nationals Park. More spending on advertising or fan appreciation days. Better salaries for their employees. The opportunities would be endless for any team with an addition source of revenue.

Despite the increase in revenue that the Nationals will see from this “re-set”, the divide between the two teams over overall MASN revenues is wildly out of control. I’ll allow Hamilton to explain:

"There’s no question Washington got the short end of the television stick when the Expos relocated here in 2005. To placate the volatile Orioles owner, MLB gave him 90 percent of MASN. The Nats got the other 10 percent. Each year their share grows, but slowly. They have about 13 percent now. The Nats will top out at 33 percent.It seems unbelievable that anyone would agree to such a deal – and unbelievable that any league would hamstring one of its own teams with such a deal – but there it is. And that part of the deal is not up for renegotiation."

Now, I won’t pretend to fully understand the ins and outs of these regional television agreements between networks, leagues, and individual teams. I know they’re profitable, for both sides, and it’s clear that the Nationals aren’t getting anywhere close to their fair share. A recent Washington Post poll found that 36 percent of baseball fans in the Washington area consider themselves Nationals fans. The Orioles were second on the list, with 15 percent.

I don’t expect that we’ll hear too much about these renegotiations until an agreement is announced. Unfortunately it won’t make a change to things on a whole due to the illogical thinking that went into the original agreement. But it will, or at least should, provide the organization with a nice revenue boost in the interim which can be infused back into the team in a number of ways.