Haney just said

[papasmurfbell]

That Fox is making a bid on MASN. Short term great deal he said billion dollar deal. Short term what will you fund players with?

[thundercleetz]

That Fox is making a bid on MASN. Short term great deal he said billion dollar deal. Short term what will you fund players with?

 

I told you Papa that Angelos could split up the O's and MASN. Short-term the O's would get a buyout amount. Long-term FOX would pay the Orioles a yearly amount for the television rights. For example, Fox paid the Padres $200 million upfront then pay $50 million a year for the television rights. The Dodgers get $125 million a year from Fox.

 

As far as if this is good or bad, I am leaning bad. It would be good in the sense that the Orioles would directly receive proceeds on their books. In the current agreement since the Orioles own the majority of MASN and Angelos owns MASN, Angelos is under no obligation to reinvest MASN proceeds in the team. If Fox owns the rights the O's might get the short end of the stick long term. The yearly amount the O's would receive would be based on TV rights fees, which is connected to market size. In other words, the Nats would probably end up getting significantly more money then us.

 

IMO I bet the MLB is really pushing for this deal because they really dropped the ball on the Nats TV rights and Angelos has the MLB and Nats by the balls currently. This is the MLB's way of getting out of the deal legally, allowing Angelos to get his upfront payment (the buyout from Fox) and the Nats thus getting a fair market deal.

 

From what it sounds like this would be a good deal for Angelos, the Nats, and the MLB, and a bad deal for the Orioles. The Orioles would essentially be given a yearly payment equivalent to a mid market team like the Pads, while the Nats get more money annually due to a bigger market, and Angelos walks away with probably over a billion dollars from the sale that he is under no obligation to reinvest in the O's.

 

Best case scenario, Angelos keeps the team and MASN. Then eventually sells the team and MASN together. The new owner is then more willing to take MASN revenues and reinvest them in the team. However like we've seen the value of baseball team networks skyrocket with the recent sale of YES, any potential owner would probably be paying close to $1.75 billion for the Baltimore Orioles. How realistic is that? My bet is the team and network get broken up.

[papasmurfbell]

Of course he can split them up. I never said he couldn't. The team is just worth about nothing without MASN. They are locked into MASN showing games and will make no revenue for those games if they are apart. The team basically will never be able to sign anyone again.

[thundercleetz]

Of course he can split them up. I never said he couldn't. The team is just worth about nothing without MASN. They are locked into MASN showing games and will make no revenue for those games if they are apart. The team basically will never be able to sign anyone again.

 

Ad my point is that Angelos or his surviving family maximize their profit by selling them separately. With the skyrocketing values of broadcasting sports networks, it's looking unrealistic that a qualified buyer would dish out more for the team and the network than what Angelos could get selling them separately.

 

But yeah I agree with you: the team's money making potential is severely limited if MASN is sold. But with the amount of money it would take to acquire both the O's and their stake in MASN, any potential owner is going to burn a big initial hole in their checkbook. The final point is simple: the O's need to be bought by a deep pocketed owner who wants to spend.

[papasmurfbell]

If someone is willing to buy the team and let the angelos' keep MASN they are to doltish for words. I have to wonder where they could get the money for a baseball team. That said to maximize the profits for Peter and co it can be to sales. MAN is sold at a premium above what its value is and sell the team for well below market value. The deal with MLB said that when the team is sold they have to get something like $360 mil or MLB makes up the difference.

[thundercleetz]

If someone is willing to buy the team and let the angelos' keep MASN they are to doltish for words. I have to wonder where they could get the money for a baseball team. That said to maximize the profits for Peter and co it can be to sales. MAN is sold at a premium above what its value is and sell the team for well below market value. The deal with MLB said that when the team is sold they have to get something like $360 mil or MLB makes up the difference.

 

There are only 30 teams in the MLB, someone will pay a good amount to buy the team without MASN. How many teams own their own television network? Not many, and that does not effect the marketability of the team to potential owners. Forbes valued the O's at $460 million without MASN. Finding owners to bid around $400-$500 million? You will have a good pool of bidders. Finding owners to bid around $1.5+ billion for a sports team in Baltimore? Good luck. Maybe in a New York or LA you would find a willing bidder to dish out that much money, but not in a market like Baltimore where television viewership in 2011 was 28th out of 30 and attendance was 25th out of 30 . Angelos' best bet to maximize profit is to sell ownership in MASN to another network and then sell the team separately.

 

There is much less profitability for an individual buying a television market at a premium than another television market buying a network to add to their viewer base (such as FOX). An individual will not see the profit anytime soon, and is in less of a position to wait it out for a long-term gain. Angelos got a great deal, the amount of initial capital he had to invest to start MASN was very small relatively. An owner to buy the network at a premium, does not make as much sense. The reason why FOX would look at MASN is to control a market to challenge ESPN. It is part of a much larger and long-term goal.

[papasmurfbell]

I am saying to seperate sales to the same peson. Say Masn is worth $1.5 bil. We will go with that $460 mil on the team. So a potential buyer gives Peter $1.76 bil for MASN and $200 for teh O's. At that point Peter would get another $160 form MLB. But nobody is going to give you max money for the O's without MASN coming along with it. They would have just bought a money loser.

[thundercleetz]

I am saying to seperate sales to the same peson. Say Masn is worth $1.5 bil. We will go with that $460 mil on the team. So a potential buyer gives Peter $1.76 bil for MASN and $200 for teh O's. At that point Peter would get another $160 form MLB. But nobody is going to give you max money for the O's without MASN coming along with it. They would have just bought a money loser.

 

Like I said, I do not see that happening for a sports team in Baltimore. James Murdoch paid $2 billion for 49% of YES because it is the New York Yankees. Which individual wants a broadcast station in the Baltimore market? It is worth a lot more to a broadcasting company like FOX, who would have no interest in buying the O's. There is a saying in real estate, there is a point of no return on renovations made to the nicest house in an ok neighborhood. That is what you have with the O's. Expecting someone to pay $1.5+ billion for a team and television network in Baltimore is not happening.

 

BTW the O's would go for a lot higher than $200 million. I am definitely thinking in the $400-500 million range. We can agree to disagree here, lets just see what happens. My money is this thing is getting broken up.

[papasmurfbell]

You notice the Yanks didn't sell the whole thing. They need the revenue to run the team.

[thundercleetz]

You notice the Yanks didn't sell the whole thing. They need the revenue to run the team.

 

You're comparing apples and oranges comparing YES to MASN. Any individual who bought MASN would be in the red for years recouping their initial investment before realizing a profit. The New York market is disirable with unlimited potential for profit, the Baltimore market is much less disirable with limited potential. MASN is so profitable for Peter Angelos because he had a next to nothing initial investment to start the network. You could say the same thing with YES when it was started years ago. They were ahead of the curve.

 

No individual is going to buy an over a billion dollar television market, then buy the team. There is no profit in that to an individual. To a broadcasting company like FOX, acquiring MASN could fit in with their longterm goal. As far as someone buying the O's without MASN, they would run the team the same way any other midsized market team does: take the yearly payout from FOX or whoever for the television rights based upon the TV rights fees, then everything else is the exact same. That is why it is so frustrating to not see Angelos spend, he has a midmarket team that is bringing in large market revenues.

[papasmurfbell]

Yes but the revenue from the networks is for putting to players. The Yanks would not give up all their money for players. The O's shouldn't either.

[thundercleetz]

Yes but the revenue from the networks is for putting to players. The Yanks would not give up all their money for players. The O's shouldn't either.

 

For the Yanks, yes. For the O's, the money from MASN is going straight to Angelos' pocket. That is where the frustration is: Large market revenue, midmarket spending. Any new owner that buys MASN the revenues would go toward recouping the large initial capital investment to acquire MASN. That money would not go to the O's. Any new owner would most certainly treat the two as two separate money making entities. That is why it does not make financial sense for an individual to acquire MASN and the O's separately. The right owner might acquire them together, but once again, finding an owner to pay $1.5 billion-plus for a Baltimore franchise, I am not confident that would happen.

[papasmurfbell]

They money from YES goes to thye Steinbrenners. Same situation.

[thundercleetz]

They money from YES goes to thye Steinbrenners. Same situation.

 

Exactly, and the Steinbrenners take that money and spend it on the Yankees. Angelos does not spend the money from MASN on the O's. The money from YES and MASN is excess profit for their respective owners because the initial capital investment was very small. However, someone who buys MASN is going to put up over a billion dollars. That new owner will not realize profit for a long time. Murdoch paid $2 billion to invest in YES because it is the NYC market. Nonetheless it will take him a while to make a return in that investment, it was a longterm investment. In other words, if someone buys the O's and MASN, there will be no money from MASN to put back into the team. That money will go back into MASN making it profitable.

[papasmurfbell]

OK but splitting them is not going to help the team be better. The Steinbrenners have always been willing to spend even before YES.

[thundercleetz]

OK but splitting them is not going to help the team be better. The Steinbrenners have always been willing to spend even before YES.

 

Oh yeah I definitely agree there. The best case scenario for the team is a deep pocketed owner buys both the O's and MASN. That way the O's maintain control over the Nats TV rights. Ideally Mark Cuban would be the guy: deep pockets, desire to win, willingness to spend, and experience in broadcasting (HD Net).

[papasmurfbell]

The problem with Cuban who I would love as the owner is the other MLB owners would not aprove the deal. I bet now if they had the vote to aprove the sale of teh Mavs the other owners would not vote to let Cuban in.

[cravnravn]

That would really suck for me caus i have the masn channel in fl. The fox channel is exclusive tampa rays.

[papasmurfbell]

Fox would be buying the channel. It would not go away.