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Nats MASN issues and MLB’s many ongoing legal issues

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Wendy Thurm reviews legal matters for Fangraphs, and her writing is excellent.  In her latest article, she gives updates on several ongoing legal battles involving MLB.  Its an excellent read.  Here’s a quick review of the current issues, how I think they’ll play out and then how I *wish* they would play out, as a baseball fan and a fan of all that is right and just in the world :-) .  I won’t go into a full description of the issue (read Thurm’s article for more, because she also links to her past stories to provide full context of the issues).  Then at the end of this post we’ll talk about the Nats-MASN issue, which lingers without resolution but received a very intriguing piece of news this week (and thus has come up in the comments elsewhere).  Read on…


Houston Astros/CSN Houston

Issue: CSN Houston couldn’t get most of the cable companies in Houston to pay its fee demands, so 60% of local residents can’t watch the games and CSN Houston just went chapter 11.  (There’s more to this story than this sentence; Thurm’s article has links to more detailed overviews).

How I think it will play out: I think the fact that CSN Houston is now in Chapter 11 will grease the skids towards getting the games onto the local carriers at significantly cheaper fees, which means less money in the Astro’s pocket.  Oh, and they probably lose their ownership percentage too as the bankruptcy court pays out debtors.

How I wish it would play out: I think the Astros have dug their own grave here.  Lots of executives and baseball pundits are praising their “purposely bad” strategy, which has resulted in 3 straight #1 overall picks, three straight “worst in the majors” seasons, and they’ll likely challenge for a 4th straight such season in 2014.  This may be a great long term strategy … but if I was a season ticket holder or a suite renter I’d be beyond livid at the product being put on the field.  You want me to pay to see your team play?  Then show me you’re at least *trying* to field a competitive, entertaining team.  In that respect I don’t feel the Astros deserve nearly anything close to the RSN fees it’s getting.  The fees Houston gets should be commensurate with the product its putting on the field; make them sign a cheap deal until they’re good again, and then they can re-negotiate.

Alex Rodriguez Suspension

IssueAlex Rodriguez got an unprecedented suspension not entirely in line with the JDA signed between MLB and the MLBPA, and is suing everyone and their brother to try to get reparations and/or reversals.

How I think it will play out: I think union arbitration processes are sacred and the courts are not about to change that.  All A-Rod’s lawsuits to that end will be tossed, he’ll serve his suspension, perhaps he’ll play some independent league baseball or go to Cuba or something (boy wouldn’t that be a thumbing of the nose to America).  And then sometime in the off-season of 2014-2015 the Yankees will outright release him, nobody else will pick him up, and A-Rod will go the way of Barry Bonds with his hundreds of millions of dollars and ruined reputation.

How I wish it would play out: I’ve gone on record a couple times in this space (here and here) about how I think both sides are culpable in this mess.  I believe A-Rod continued to dope and more and more I believe he showed a distinct pattern of cheating to the point where I don’t have a problem if he never played again.  But in the meantime I believe what MLB did to pursue A-Rod went far above bounds, and I believe that Selig was colluding with the Yankees owners in some respects (just as I believe Selig has organized collusion among the owners against players and/or the MLBPA several times in the past).  I wish MLB would lose its anti-trust exemption so that a number of the unsavory situations in the game could see the light of day in a courtroom.  It’ll never happen.

San Jose vs MLB/Giants and Athletics

Issue: Oakland wants and needs to get out of its sh*tty stadium and San Jose is an ideal spot to move.  Except that San Francisco is claiming that as part of its god-given “territory” despite evidence that it was once Oakland’s to begin with and the then-Oakland owner “gave” it to SF out of gratitude.  Meanwhile, San Jose filed an antitrust lawsuit to try to compel movement in the interminable “blue-ribbon panel” that Bud Selig appointed years ago but which has done nothing.

How I think it will play out: Well, the lawsuit that San Jose filed against MLB has no chance of winning.  How do I think the whole Oakland moving thing will play out?  Unfortunately, I think the commissioner (who, remember, works at the behest of the owners) will *never* broach a territorial battle of one of its owners, because that’d set a precedent that they wouldn’t be able to fix (think about how many teams would *love* to move to Brooklyn and immediately have a 10m person fan base…Tampa Bay would be there tomorrow with their NY-based ownership group).  So Oakland will continue to be stuck in Oakland until maybe possibly they decide to test a new market in Portland or San Antonio or Charlotte.  Except that (of course) all those markets also have the same territorial rights (from Seattle and Houston and Washington/Atlanta respectively), so maybe that’s a non-starter too.  *sigh*.

How I wish it would play out: I wish the Giants would just be forced to admit that San Jose is not part of their territory.  Perhaps when they played in Candlestick and it was workable to drive from San Jose to the south of the city to see a game.  Now?  The heart of San Jose is 50 miles from the Giants stadium, which is in the middle of the city with limited parking.  It is exactly akin to driving from DC to Baltimore on a mid-week night to see a game … except that the Baltimore stadium has acres of parking paved out.  Oh and if you realistically wanted to make a 7:05 start in Baltimore and you lived in Northern Virginia … you’d be leaving your house at 4:30 to ensure you beat the traffic.  For that reason, I feel that the A’s should be allowed to move to San Jose and re-distribute the fan-bases of the Bay area.  Large swaths of the Oakland suburbs in east bay would now be so much closer to AT&T park than the A’s stadium that they may start patronizing the Giants, while huge swaths of the south bay would now have an easily accessible team to visit and follow.  It’ll never happen though.

Antitrust challenge to MLB Blackout Policy

Issue: Thanks in part to the whole “territory” issue mentioned above, MLB now finds itself with these arcane blackout policies that are incredibly unfair to people who live in certain “multi-team territory” states and who depend on MLB.tv to watch games.  If you live in some places like Iowa, south Nevada, Oklahoma, Connecticut, etc then you may be completely blocked from watching your local team altogether, thanks to MLB blacking it out and your local cable channel perhaps not carrying your favorite team’s games.

How I think it will play out: I’m sure MLB will continue to claim that it can’t compete against its RSNs … not while these RSNs continue to line the pockets of owners.  Remember, everything baseball does is about putting extra pennies in the owner pockets.  See the CBA, limits on amateur spending, the cap on posting fees for Japanese players, everything.

How I wish it would play out: How hard would it be to just pipe in the RSN feed to MLB.tv in these blackout areas?  You’d be showing local customers their local commercials and ending the blackouts.  Is that just too simple?  If RSN’s are worried about ratings … just add in the MLB.tv ratings.  In this day and age, where companies now can track TV watching far better than the Nielsen ratings ever could (don’t believe me?  How did Tivo know that the infamous wardrobe-gate incident was the most “rewound event” ever unless they’re tracking our watching patterns FAR more closely than we know?)

 


Thurm also maintains an equally excellent overview of the Regional Sports Network (RSN) deals in place for MLB teams, so that fans can see just how ridiculously unjust the current revenue distribution is in the game.  By way of example; the Dodgers are getting an unbelievable $340M/year from their RSN deal while Pittsburgh gets $18M.  Yeah; that’s pretty much the definition of an uneven monetary playing field.  Yes some of this money goes into a revenue sharing pot, but the lions share of it stays with the team, and enables the Dodgers to have a payroll 5-6 times that of most of its competitors.

I bring up this last point because (in case you didn’t know or havn’t been reading the comment sections here) Jonah Keri recently published an excellent “expose” of the downfall of the Baltimore Orioles under the “leadership” of Peter Angelos, and it contains a very interesting nugget of information about the ongoing Nats-O’s MASN struggle.  Thurm didn’t go into this particular issue because it isn’t a “legal issue,” meaning there’s no lawsuit pending.  Not yet anyway; Keri discovered that MLB has been making secret under the table payments to the Nats to make up for the obvious and clear RSN revenue shortfall that the Nats are being screwed out of in the current MASN deal, and Keri alleges that these payments are being made in order to PREVENT a lawsuit from Ted Lerner and the Nats ownership group.  Which only makes sense to me.

Washington’s market is about the same size as Dallas, in terms of population.  It is significantly more wealthy.  However the baseball-watching fan-base isn’t as developed as in other mature baseball markets.  You can easily make the argument that the Nats should be getting a comparable deal to what the Texas Rangers on some levels, but not others.  The Rangers are getting a whopping $150M/year from their deal while the Nats get $29M (plus whatever under-the-table cash from MLB) from MASN.  Its no wonder the Nats have demanded $100M from Angelos, and its frankly ridiculous that Angelos’ thinks his counter of $35M is anywhere close to equitable.  And its no wonder this hasn’t been resolved yet, not when the sides are $70M apart.  That being said, Keri lays out a rather reasonable explanation why Angelos is worried about this whole deal, and why it may be impacting his on-the-field product.

How I think it will play out: a deal is a deal, and I’ll bet the Nats are stuck with this deal for the long term.  Thanks Bud!

How I wish it would play out: I wish the league would just recognize its deal with Angelos was hopeless and force a one-time buyout fee and/or a splitting of the RSNs.  I’d love to see a buyout of the deal (costing hundreds of millions of dollars), and then a new RSN and/or a joining forces with CSN Washington (who already broadcasts Wizards and Caps games) to create a strong Washington DC RSN.  I’d even be willing to throw some ownership percentage as an appeasement to Angelos.  Maybe we can do some partnership deals with MASN to broadcast Orioles games in the DC area on CSN-Washington2.   Let Washington control its own destiny.

 


Editor Note: I corrected Wendy Thurm’s name throughout; I had it as “Thrum.”  Thanks to commenter Wally for pointing this out.

Written by Todd Boss

February 7th, 2014 at 7:51 am

Ask Boswell; 12/17/12 Edition

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Is he staying or going? Photo: Rob Carr/Getty Images

Another Ask Boswell edition, dated 12/17/12.

As always, I type my response here before reading his answer (which sometimes leads to non-answers, since Tom Boswell sometimes doesn’t directly answer the same question i’m answering), and I sometimes edit questions for clarity.

Q: What is it going to take to settle this MASN Mess?

A: Probably a huge check to Peter Angelos to buy out his 90% stake in MASN.  But I like the approach baseball is taking; clearly Angelos has himself an incredibly one-sided deal, and clearly the whole “we’ll renegotiate in 5 years” turned out to be a gigantic mess.  Because its now drug on for more than a year with Angelos predicably low-balling the team while other teams out there get multiples of millions of dollars more per year than the Nationals are getting.  Wendy Thurm at fangraphs.com posted a great review of all 30 team’s RSN contracts.  For comparison purposes the next closest Market sizes to Washington (based on 2008 MSA) are Miami and Houston.  Miami gets $18M/year in a very bad deal, Washington is getting $29M/year, and Houston just negotiated a $80m/year deal.  Detroit, which is smaller still than Washington, is getting $40M/year in an old deal that expires in 2017, though they’re likely not to rise too much because of the economic conditions of their market.  What does all that mean?  Clearly Washington is no New York/Boston/Los Angeles, but clearly the team needs more than $29M.

I hope Fox Sports comes along, buys out Angelos and negotiates individual terms with the two franchises.  Will it happen?  Probably no, probably never.  Perhaps the solution will be a change of ownership in Baltimore, and Bud Selig (or whoever the commissioner is at the time) tacks on a clause of the switch to split off the RSN.  I could see that happening.

Boswell says it will take time, anger, and maybe even Selig imposing his whole “best interests of the game” clause.

Q: Who has the most frightening lineup in baseball ( Angels, Dodgers, or Blue Jays)?

A: Hmm.  The Angels now feature no less than SIX guys who have hit 30 homers in a season; Trout, Pujols, Trumbo, Hamilton, Morales and Wells.   That’s some incredible offense (even if Vernon Wells‘ time is past).   The Yankees and the Rangers were 1-2 in Runs Scored, Slugging and OPS in 2012 but both will be weakened by injuries and FA defections in 2013.  The Dodgers lineup “seems” potent, but includes a significant number of question marks.  If everyone plays to their potential, then yes the Dodgers could be fearsome.  But its more likely that  Crawford struggles and that Adrian Gonzalez continues to appear as if his best days are past.  Lastly Toronto may have a great middle of the order but they can’t match the Angels for up-and-down the lineup power.   The additions of Jose Reyes and Melky Cabrera aren’t going to help them catch the Angels.  Boswell says Toronto is best.

Q: With Hamilton->Los Angeles, are the odds of LaRoche leaving higher?

A: I think the ongoing stalemate over contract length plus Texas suddenly being majorly in the market for a middle-of-the-order lefty bat to replace Hamilton should have Nats fans worried (or rejoicing, depending on your viewpoint) that Adam LaRoche may be plying his trade in Dallas the next few years.   I would not be surprised to see LaRoche sign a 3 year deal in Texas right now.  Is that the end of the world for the Nats?  No … I think the team will do just fine with Michael Morse playing first and Tyler Moore getting backup reps in LF and at First.  Others have pointed out that Morse’s lefty/right splits are nearly identical and it doesn’t matter that we wouldn’t have another lefty in the lineup.  And (not that the average fan cares about this point) it would save a bit on payroll, perhaps allowing the team to augment/buy something they may need at the trade deadline.

Q: With all the FA stars seemingly ending up in the AL, are the Nats better just by attrition?

A: A fair point.  But the NL Dodgers have certainly bought their fair share of talent too.  As a Nats fan, you have to be happy about the decline of our divisional rivals in the past few months: Marlins fire-sale, Mets basically turning into a mid-market team (and traded away their Ace in RA Dickey this week), and the Phillies making one curious acquisition (Michael Young) after another (Ben Revere).  Washington has improved this off-season, and if they can stave off the injury bug that hit the offense last season they could improve on 98 wins in 2013.   But I also think St. Louis will be just as good, I think Cincinnati has improved, and of course the Dodgers could be scary if all their talent comes together.  Boswell thinks so, but also has stated before that the WS now goes through Los Angeles.

Q: Is there something amiss in the MASN contract legally, since Angelos has not accepted what should have been stipulated in the contract?

A: It sure seems so.  Ever since Angelos got the team, his legal background seems to have Selig spooked.  I wonder if this is why Selig has not pressed more for a solution to this situation.  Boswell thinks that the search for a MASN buyer could be indicative of a permanent stalemate in the contract talks.

Q: Will Philadelphia fans forgive Lannan for breaking Utley’s hand?  Should the Nats batters be worried when he returns?

A: Yes the Philadelphia fans will forgive and forget; remember, most fans just root for the laundry.  Whoever is wearing the jersey is a friend, everyone else is foe.  I don’t think our batters should be too worried; I’m sure they look forward to facing John Lannan.  He’s not exactly the second coming of Cy Young after all.  Boswell says that Chase Utley brings the HBP on himself by virtue of his hitting too close to the plate.

Q: You’re Mike Rizzo: Do you have another big move up your sleeve, either a trade of a FA signing? Or are you satisfied with what you’ve got, and standing pat?

A: I don’t think the team has any more major moves; Mike Rizzo left the winter meetings early because his work was done.  I can see a couple of players getting moved for prospect depth, and perhaps an under-the-radar signing for a right handed reliever to compete for a spot in spring training (ala Brad Lidge last year), but that’s it.  This team is who it is right now.  Well, once the LaRoche situation is resolved anyway.  Boswell agrees.

Q: Who you got for more wins this year, Angels or Dodgers?

A: Dodgers.  Easier division, more talent added.  The Angels have to deal with both Oakland and Texas, and look to have a significantly worse rotation so far in 2013.  The Angels can’t improve much from 89 wins, but the Dodgers can definitely improve on 86 wins.  Boswell didn’t really answer; he says both make the playoffs but neither makes the WS.

Q: Was it the # of Years that convinced Hamilton to go to Los Angeles?

A: I think it was partly a sense that Josh Hamilton felt he wasn’t wanted in Texas, and then mostly from there the right destination in terms of team and guaranteed dollars.  Some cynics out there in the baseball world say that the team doesn’t matter; that players only follow the money.  I don’t believe that necessarily.  Money issues equal, If you had to choose between a franchise on the brink of the playoffs, in a warm-weather city like Los Angeles versus a team that hasn’t contended in years in a crummy weather city (thinking Seattle, another rumored destination), where would you choose?  Boswell says Hamilton isn’t worth 5 years but didn’t answer this part of the question otherwise.