“The most important part of the deal is the equity in MASN over the long term. In a few years that equity stake in the network will be worth far more than any rights fee that a Comcast or a Fox SportsNet could pay (the Washington Nationals). So they will in time have a 33 percent stake in MASN without one penny of investment. We pay all production costs, overhead, the staffing and program fees. The new Nationals get all the benefits without the risk. My goal, and I am sure it is the same for the Washington owners, is to have two very successful franchises that work together on a number of projects while being friendly rivals on the field.”
Peter G. Angelos
April 7, 2006
AS PETER G. ANGELOS WATCHED THE Boston Red Sox win the 2004 World Series, he was still a state of shock that his Major League Baseball partners and commissioner Bud Selig had actually done the unthinkable – placing a rival National League team into Washington, D.C. to compete with the Orioles, forever dividing the marketplace.
Insiders said they’d never seen Angelos so angry, so agitated, so betrayed and hell bent on making them pay for this decision to double cross a partner. Selig had been contrite in their conversations and vowed to somehow find a way to keep Angelos whole on the deal and the burgeoning business of television networks had become the next generation way of getting money from the masses to fund baseball growth. In the 1980s, MLB discovered sponsorships and a higher-end clientele. In the 1990s, MLB discovered leveraging municipalities for new stadia, skyboxes, club seats and premium sponsorships. Now, in the new century, it was going to be television rights and revenues derived from cable purchasers who are bundled into larger all-but-invisible packages where the “regional sports network” would garner a few dollars per month, per subscriber.
This was a way to collect automatic, “unseen” money from virtually every home in their region. They would be getting tens of millions of dollars from folks who wouldn’t even know they were funding Major League Baseball. The Lords would be getting money from people who didn’t even know what baseball was – or where to find it on the multi-channel cable dial.
Angelos had already become wise to the reality of the changing media marketplace. He didn’t really understand but it – but knew it had tangible and growth value in the future.
It was no accident that the New York Yankees and the Boston Red Sox had more far revenue to spend on better baseball players, which exponentially aided their ability to win and keep the money machine well oiled with local interest and new-age marketing. The Yes Network was a product of a 1999 merger between the Yankees and New Jersey Nets for the express purpose of marketing a cable television channel in the New York region that would cut out the middleman – the sports cable television networks. The war in New York with Cablevision was legendary and it was big money. In 2001, the New England Sports Network (NESN), which enjoyed a near monopoly status in the region for television sports, went to the basic tier of cable, meaning far greater distribution and more money that would be used to fund the new and improved Boston Red Sox.
The same Red Sox that Angelos just watched win the World Series, who were led in part by Larry Lucchino – the former Orioles president and investor, who was the visionary for the modern franchise and building of Camden Yards, and the first employee whom Angelos unceremoniously partnered with and then ousted a month later in 1993 after his Orioles acquisition from Eli Jacobs in a New York auction.
Angelos knew all of his options, demands and “asks” in regard to what he’d be trying to retain and obtain if Selig and his MLB partners ever crossed the line and did the unthinkable – putting the Expos just 38 miles away in his backyard.
But, make no mistake about it, Angelos would’ve far preferred to have never seen the Washington Nationals born at any cost or any profit.
He abhorred the concept of D.C. baseball.
Washington baseball was truly his worst nightmare as the owner of the Baltimore Orioles. He was absolutely convinced there was no financial way to make him “whole” – and worse, he truly believed that it would drastically affect not only his team, but that the Washington team would fare no better in a market that Angelos and most everyone else remembered as a two-time baseball loser in the 1960s and early 1970s. But a lot had changed since the Senators left for Arlington, Texas in 1971 to become the Rangers.
The Northern Virginia suburbs had grown exponentially over the nearly four decades and the biggest enclave of per capita earnings in the United States fell throughout what Angelos felt was hard-earned Orioles country. Angelos valued the Washington, D.C. community for the same reasons Selig and the other MLB owners did – they smelled the size, money and disposable income. Angelos claimed that 30% of his audience came from those homes and wallets. The Orioles and Major League Baseball were a television brand that his baseball brand had cultivated over 30 years and he and his partners paid top dollar for in 1993.
Angelos felt absolutely deceived, absolutely blindsided by their lack of concern …