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April 01, 2005
Angelos payoff complete
Alert the horsemen: MLB and Baltimore Orioles owner Peter Angelos have finally agreed to a deal to compensate Angelos for having to live next door to the Washington Nationals. While the basics of the deal - the two teams will share a new, jointly-owned cable sports network, and Angelos will be indemnified by MLB if he can't get $365 million when he sells the O's - there were two significant last-minute developments:
- According to the Washington Post, "the Orioles will own 90 percent of the regional sports network this season, with baseball owning the rest, according to sources with knowledge of the arrangement. Baseball's share of the network would increase over the next 20 years, but it will be capped at 33 percent." This is a much bigger slice of the pie for Angelos, who previous reports had said would control 60% of the RSN.
- While Angelos gets his sale-price guarantee, he apparently did not get his guarantee that if the O's annual revenues slip in coming years, MLB would make up the difference. This is a huge concession - as I wrote in Baseball Prospectus last week, an annual revenue guarantee would have created a huge incentive for Angelos to "just call up the entire Ottawa roster and let them play out the schedule, knowing that the money will be rolling in one way or another." At least now Baltimore fans won't have to fear being denied the exciting battle for third place in the A.L. East.
As for other ramifications, they remain much the same: Losing control over much of their TV rights (Angelos just has to pay "fair-market value," which is expected to be determined at $25 million a year or so) could cost the Nats some future revenue, which would in turn be expected to reduce the sale price MLB will get for the team later this year. (Cue the violins for George Steinbrenner's wallet.) And, of course, it means that long-suffering D.C. fans will be able to watch Nationals games on TV, starting with Monday's opener - though given their team's offseason acquisitions, that might not help so much with the suffering.