In the offseason, teams are frequently characterized as “winners” and “losers” based on the players they’ve acquired relative to the players who have left. Often, the so-called winners are simply the clubs who’ve been most active, bringing in the most players — regardless of cost — while the losers often are those clubs which have been more idle, making smaller moves to improve their rosters. These characterizations do not always translate to the field, as the case of the San Diego Padres illustrates. The Padres followed an active 2014-15 offseason with a poor 2015 campaign.
With that caveat having been made, many have declared the Washington Nationals losers this offseason not simply because Ian Desmond, Drew Storen, and Jordan Zimmermann are gone — replaced by a relatively modest group including Shawn Kelley, Daniel Murphy, Ben Revere — but mainly because they failed to land Yoenis Cespedes, Jason Heyward, or Ben Zobrist in free agency. While the team might be hidden winners of the winter, the Nationals are claiming their failure is due to a tightened budget caused by the Baltimore Orioles’ refusal to pay market value for their television rights.
For those who might not be aware, the Orioles — principally Peter Angelos, through regional sports networks MASN and MASN2 — air the Nationals broadcasts. The Orioles control the Nationals broadcasts as a result of negotiations with the team when the Nationals moved to Washington, D.C., thus encroaching on the Orioles’ television territory. Nathaniel Grow characterized the situation like this after the last major decision in the legal dispute between the teams:
In order to alleviate the Orioles’ concerns, MLB structured a deal in which Baltimore would initially own 87 percent of the newly created Mid-Atlantic Sports Network (MASN), the regional sports network that would air both the Orioles’ and Nationals’ games. In exchange, the Nationals were scheduled to receive an initial broadcast rights fee of $20 million per year from MASN, an amount that would be recalculated every five years.
Jump forward to 2012, when Washington requested that its rights fee be increased to $120 million per year. MASN and the Orioles refused, and as a result the dispute ended up in arbitration, with a panel of MLB team executives – the Mets’ Jeff Wilpon, the Rays’ Stuart Sternberg, and the Pirates’ Frank Coonelly – ultimately awarding the Nationals roughly $60 million per year in broadcast fees.
The Orioles believed they should pay the Nationals roughly half the amount the arbitrators awarded and appealed, getting the decision thrown out due to conflicts with the Nationals’ counsel. (For more on the decision, read Grow’s full piece linked above.) The case is still ongoing without a resolution and the Nationals are pushing the Orioles to head back to arbitration. The Nationals retained new counsel, and have filed a motion to compel the parties to arbitrate the case and set a value for the television rights. In their recent motion, the Nationals indicated that the Orioles’ failure to pay fair-market value for television rights has hamstrung the team in signing free agents to multi-year contracts.
“MASN’s underpayment of rights fees has already required the Nationals to fund payroll and other expenses from its own reserves, and further delay could require the Nationals to seek new financing,” says the team’s memorandum. “This is not only burdensome in its own right, but it places the Nationals at a competitive disadvantage to other baseball clubs, which typically receive fair market value from their regional sports networks for their telecast rights. Without this added income, the Nationals are handicapped in their ability to invest in efforts to improve the team. For instance, without this added and steady income, the Nationals cannot bring full economic confidence to investments in multi-year player contracts to keep up with the fierce competition for top players — especially when such control over finances is in the hands of a neighboring club.”
This might sound a bit like whining coming from a billionaire owner who just one year ago signed Max Scherzer to a seven year, $210 million contract, and reportedly made offers to Jason Heyward for roughly $200 million and Yoenis Cespedes $100 million, but those claims do have some merit.
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