Friday, September 29, 2006

Jim Williams: Playing money ball, Baltimore-style
Jim Williams, The Examiner
Sep 29, 2006 5:00 AM (10 hrs ago)
Current rank: # 16 of 6,692 articles

BALTIMORE - Orioles owner Peter Angelos finally has the regional cable sports network he feels is necessary to make up some ground on the Yankees and Red Sox, but there is a long way to go before cash starts rolling into the Camden Yards warehouse.

Angelos’ Mid-Atlantic Sports Network is the single biggest gamble he has taken since assuming ownership of the team. The Washington Nationals’ local TV rights fees are paid by MASN as part of the deal Angelos struck with Major League Baseball when they invested $75 million into the network for a stake of up to 33 percent ownership of MASN over time. The deal, which is guaranteed, then transferred to the Lerner family when it bought the Nationals. Should MASN fail to pay the Nationals on time every year, the network would run the risk of breaching the agreement and losing the Nationals’ rights.

As MASN’s senior partner, Angelos is also responsible for all of the network’s operating costs — such as rights fees, buying programming and producing more than 300 baseball games in 2007 at about $15,000 per game.

MASN is losing money. Currently, it’s at 3.6 million subscribers, putting it 1.2 million behind Comcast SportsNet’s total. MASN’s growth to reach the five- to six-million mark is critical to its long-range success, and that will take time.

The clock is ticking on the local network. The Baltimore- and Washington-area cable deals with Comcast are in place, so MASN is further along than last year, but there is still a long road ahead. Typically, it takes regional sports networks four to six years before they turn a profit.

So how much cash will MASN generate for the Orioles to spend? Good question.

In 2007, MASN will pay the Nationals and the Orioles $25 million dollars each in local TV rights fees, with an increase each year as the network grows. Add to that $22.5 million per year — the Orioles’ share of MLB’s new $3 billion TV contracts in 2007 — and that puts the Orioles at $47.5 million in local and national TV revenues next year. Both Baltimore and Washington will be well within MLB’s top 10 in local TV-generated revenue.

But no matter how well MASN produces, there will always be a financial disparity between the Baltimore/Washington region and top markets like New York, Los Angeles and Chicago because of sheer population numbers. At the pinnacle of the local TV revenue list are the Yankees, Red Sox, Mets, Dodgers, Angels and Cubs. The Orioles and Nationals are in the same boat as the White Sox, Braves and Phillies.

But money — or in this case, the lack of it — isn’t keeping smaller-market teams like the Athletics, Tigers, Twins and Padres out of the playoffs. None of them has anywhere near the TV cash that the Orioles and Nationals will have in 2007. The moral of the story? The Birds must open their potentially burgeoning wallet wisely.

Baltimore fans should be encouraged that Angelos is taking a big gamble with MASN. He knows the Orioles need it to be successful. But that same gamble could cost him everything.

Jim Williams is a seven-time Emmy Award-winning TV producer, director and writer. You can reach him at

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