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
Issue: Alex 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.