The Nationals and Orioles dispute over TV money is about to explode

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For years now, the Nationals and Orioles have been at odds over TV revenue. It’s about to explode.

The back story: in order to allow the Nationals to start up business in Orioles territory back in 2005, the Orioles got a sweet TV deal. They got (a) majority ownership of the network, MASN, that broadcasts both Nats and Orioles games; and (b) they got way more in rights fees from the network for their games than the Nats got for theirs. Indeed, the Nats got a pretty undervalued amount, per the deal.

Starting in 2012, that undervalued piece ended and the Nats were to begin receiving rights fees from MASN that represented “fair market value.” They still haven’t received it as MASN — which, again, is controlled by Peter Angelos and the Orioles — has repeatedly balked. To placate the Nationals, Major League Baseball has been kicking back money to the Nats. Bud Selig also set up an arbitration, with a panel made up of other baseball owners and executives to determine what “fair market value” is.

The Hollywood Reporter has a bombshell of a story today in which it notes the following:

  • That arbitration panel ruled in favor of the Nationals;
  • The Orioles/MASN have still ignored it and haven’t paid;
  • The Nationals and Orioles/MASN have each started getting testier with one another via attorney letters;
  • Bud Selig wrote both clubs — and Hollywood Reporter has the letter — warning them that if they sue over this they’re in DEEP TROUBLE suggesting that they may have “the most severe sanctions” leveled against them if they do; and
  • Both the Nats and Orioles seem to be ignoring Selig and are on a collision course in court.

This is a huge story inasmuch it (a) involves something huge like broadcast rights fees at a time when such fees dictate almost everything about the game; (b) shows that Bud Selig’s greatest strength as Commissioner — keeping the peace among clubs — is failing him in this case; and (c) we have the distinct possibility of club vs. club litigation, which means actual financial and business information in open court and THAT JUST DOESN’T HAPPEN IN MAJOR LEAGUE BASEBALL.

Oh, and those “most severe sanctions” Selig threatened the O’s and Nats with? Those include the sorts of sanctions that cost Frank McCourt ownership of the Dodgers. Of course McCourt was a wounded animal at the time. Would Selig dare try to go after Peter Angelos or the Lerners like that?

A big, big story. Great work by the Hollywood Reporter to get this out there when Major League Baseball’s m.o. is to never air its dirty laundry in public.

UPDATE: The Orioles and Attorneys for MASN just contacted me with official comments on the matter. From the Orioles:

“As those who follow the Clubs are aware, the Settlement Agreement between Baseball, the Orioles, and the Nationals established MASN to compensate the Orioles for the loss of market share and other damages caused by the relocation of the Nationals to Washington, D.C. Contracts are meant to be honored and the Orioles have every expectation that this contract will also be honored. The Orioles continue to work with the Office of the Commissioner to try and resolve this dispute.”

And from Thomas J. Hall, counsel for MASN:

“MASN has honored the terms of the Settlement Agreement, including the formula in that contract for resetting the Nationals’ telecast rights fees and expects all parties will do the same. That contract specifically includes an agreed upon and historically applied formula for resetting the Clubs’ telecast rights fees that has been applied by Baseball to virtually every other club-owned regional sports network. MASN is confident its contract will be honored and looks forward to further discussions with all parties to try and resolve this matter amicably. Our loyal viewers should understand this is a business dispute and will have no impact on the telecast of the Clubs’ games.”

Note the complete lack of reference to the arbitration Selig put together? Did the Orioles not participate in it, or are they just refusing to acknowledge its legitimacy now that it has resulted in a decision they don’t like?

One thing I do know: Peter Angelos is, more than anything, an able lawyer. And if he’s not running the show himself, he has people in place that are running it the way he’d like it to be run, and he has never feared going to court. Meanwhile, the Lerners did not get rich by being walked-over rubes. They are as litigious and determined as the next high-powered businessman, and likely more so.

Buckle your safety belts.

Seattle Mariners to make a “full-court press” for Shohei Ohtani

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Mariners general manager Jerry Dipoto said in a team-sponsored podcast the other day that the M’s will make a “full-court press” for Shohei Ohtani. To that end, Dipoto said that the M’s would be willing to let the two-way star to pitch and to hit, which is something Ohtani is interested in doing in the United States. Not all clubs are likely to let him do this, with most likely seeing him as a starting pitcher only.

Ohtani, who is expected to be posted by his Japanese team, the Nippon Ham Fighters, possibly as early as today, can sign with anyone he wants. He is, however, subject to the international bonus pool caps, so the bids on him will be somewhat limited. The Texas Rangers and New York Yankees have the most money available: $3.535 million for the Rangers and $3.5 million for the Yankees. The Twins ($3.245 million), Pirates ($2.266 million), Marlins ($1.74 million) and Mariners ($1.57 million) are the only other teams with more than $1 million left. Twelve teams — including the Dodgers, Cubs, Cardinals and Astros — are limited to a maximum of $300,000, having met or exceeded their caps for this signing period already.

Ohtani, however, is said to be less motivated by money than he is by finding the right situation. While a lot of guys say that, the fact that Ohtani is coming over to the U.S. now, when his financial prospects are limited, as opposed to waiting for two years when he is not subject to the bonus caps and could sign for nine figures, suggests that he is telling the truth. As such, a team like the Mariners that is willing to allow him to hit and pitch could make up for the couple of million less they have in bonus money to spend.

As for how that might work logistically, Dipoto said that the team would be willing to play DH Nelson Cruz a few days in the outfield to accommodate Ohtani, allowing him to DH on the days he’s not pitching. That might be . . . interesting to see, but given how badly the Mariners could use a good starting pitcher, they have an incentive to be creative.

Ohtani, 23, suffered some injuries in 2017, limiting him to just five starts and 65 games as a hitter. In 2016, however, he hit .289/.356/.547 with 22 homers in 342 at-bats and went 11-3 with a 3.24 ERA, and a K/BB ratio of 146/51 in 133.1 innings as a starter.

Five clubs have more money to spend on Ohtani than the Mariners do. None of those teams are on the west coast, which some Asian players have said in the past they preferred due to faster travel back home. The Mariners, owned for a long time by a Japanese company which still retains a minority interest in the club, and long the home for high-profile Japanese players such as Ichiro and Hisashi Iwakuma, likely have a better media and marketing reach in Japan than most other teams as well, which might be a factor in his decision making process. Is all that enough to sway Ohtani?

We’ll find out over the next couple of weeks.