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O's / Nationals MASN TV Fees (2 of 2)


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#121 Oriole85

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Posted 05 September 2014 - 10:12 AM

Washington PostNationals, Orioles to meet in December over MASN dispute


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#122 BSLChrisStoner

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Posted 26 September 2014 - 08:58 AM

Washington Post: MASN, Orioles ask NY court to throw out MLB panel’s TV rights award

http://www.washingto...v-rights-award/


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#123 Matt_P

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Posted 29 September 2014 - 08:53 AM

"We are unprepared to rely on the unsupported assertions of the Nationals' expert, particularly since his opinion is contrary to the Committee's understanding, based on its significant expertise in this area, of how regional sports networks value rights fees.

 

MASN (through its expert, Bortz Media), on the other hand, attempts to use actual numbers to justify its selection of comparable agreements, but, like the Nationals analysis, we find its comparable analysis to be results-oriented rather than realistic."

 

:shock:



#124 DJ MC

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Posted 29 September 2014 - 08:57 AM

"We are unprepared to rely on the unsupported assertions of the Nationals' expert, particularly since his opinion is contrary to the Committee's understanding, based on its significant expertise in this area, of how regional sports networks value rights fees.

 

MASN (through its expert, Bortz Media), on the other hand, attempts to use actual numbers to justify its selection of comparable agreements, but, like the Nationals analysis, we find its comparable analysis to be results-oriented rather than realistic."

 

:shock:

 

What is that from?


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#125 Matt_P

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Posted 29 September 2014 - 09:06 AM

What is that from?

 

The RSDC decision.



#126 Matt_P

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Posted 08 October 2014 - 07:28 AM

In the RSDC decision I finally found out why the Nationals wanted as much money as they did. Apparently what they did was take the average annual value of the Angels, Astros, Rangers and Dodgers (the one that McCourt and Fox agreed upon), added in a pro-rated amount of bonuses and then added a twenty percent premium. I don't know how much the Angels and Astros received upfront but I have seen reports stating what the Rangers and Dodgers received and it was in the same ballpark as what the Nats wanted. I write more about it here if anyone is interested.

 

A lot of financial data has come out at this point.

 

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#127 Mackus

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Posted 08 October 2014 - 08:14 AM

The Nationals request seems like such an upsold, margin-added-at-every-step type of request that the final number borders on hyperbole, no?



#128 Matt_P

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Posted 08 October 2014 - 08:20 AM

The Nationals request seems like such an upsold, margin-added-at-every-step type of request that the final number borders on hyperbole, no?

 

My reading of the RSDC decision is that the Nationals request was laughed out of the room. I'd go farther than hyperbole. I'd say that the RSDC considered it to be outright fiction.


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#129 RShack

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Posted 08 October 2014 - 11:46 AM

Very nicely done.   I learned a bunch of stuff.  Thanks for that.

 

In the comments section, you said that you would be doing a follow-up piece about the diff between RSDC's numbers and MASN's.  Can't wait.   I hope you will include in that some insight into the diff between those 2 numbers and the the number provided by Allen & Co.    

 

Also, how does DC's viewership compare to that of the Angels? I ask because the RSDC's number was pretty close to what the Angels are getting.

 

How are all these folks dealing with the tricky issue of BAL and DC being different but certainly not distinct markets?  I would think some kind of Venn diagram thing would be the sane way to view that... but what are they all doing about that?

 

Finally, regarding the candy bar analogy you provided... is that pretty much what you think the RSDC did?  Were they just being wimps, or do you think the fix was in?


 "The only change is that baseball has turned Paige from a second-class citizen to a second-class immortal." - Satchel Paige


#130 Matt_P

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Posted 08 October 2014 - 12:32 PM

Very nicely done.   I learned a bunch of stuff.  Thanks for that.

 

In the comments section, you said that you would be doing a follow-up piece about the diff between RSDC's numbers and MASN's.  Can't wait.   I hope you will include in that some insight into the diff between those 2 numbers and the the number provided by Allen & Co.    

 

Also, how does DC's viewership compare to that of the Angels? I ask because the RSDC's number was pretty close to what the Angels are getting.

 

How are all these folks dealing with the tricky issue of BAL and DC being different but certainly not distinct markets?  I would think some kind of Venn diagram thing would be the sane way to view that... but what are they all doing about that?

 

Finally, regarding the candy bar analogy you provided... is that pretty much what you think the RSDC did?  Were they just being wimps, or do you think the fix was in?

 

Glad you liked it. I probably won't have the followup ready until the offseason.

 

I don't know why Allen and Co chose $42 million with a 4% interest rate. I don't even know whether it was for a five year term or longer. I'm hoping that an Allen and Co pro forma turns up in a future set of documents but I'm not sure that will give me an answer.

 

I'd say the LA market is easily twice as valuable as the Nationals would be without the Orioles. It has an extremely large core area and those are the subscribers that pay the most. I'd say the same for the Rangers. The Astros are probably the only real comparable to the Nationals/Orioles. This may be surprising because they're making more money than the Rangers (far superior market). But it does shed some light on why CSN Houston is now bankrupt (and why the Astros in reality got considerably less than the Rangers or Orioles or Nationals). That's another problem with this method.

 

I haven't seen a reasonable method of trying to measure comparable markets. Bortz Media thinks the idea is ridiculous. MLB clearly thinks of it as nothing more than a check (which makes methodology a lot easier if you're just spitballing it). I don't think there's any real agreement. The only two serious parties are basing their decision off of the Bortz Methodology (or something strongly akin to it).

 

I'll discuss the reasons for the differences between the RSDC and MASN based strongly off of the RSDC decision. I think you'll be able to come to your own opinion.


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#131 Matt_P

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Posted 08 October 2014 - 12:57 PM

MASN also claimed that the RSDC previously ruled that Los Angeles can't be included in any "comparables" analysis involving Boston, because it "is so much larger." Eighteenth Report of the RSDC at 7.

 

Note that MASN may have a copy of the Eighteenth Report of the RSDC but I don't believe that I do.



#132 PatrickDougherty

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Posted 08 October 2014 - 01:19 PM

Glad you liked it. I probably won't have the followup ready until the offseason.

 

I don't know why Allen and Co chose $42 million with a 4% interest rate. I don't even know whether it was for a five year term or longer. I'm hoping that an Allen and Co pro forma turns up in a future set of documents but I'm not sure that will give me an answer.

 

I'd say the LA market is easily twice as valuable as the Nationals would be without the Orioles. It has an extremely large core area and those are the subscribers that pay the most. I'd say the same for the Rangers. The Astros are probably the only real comparable to the Nationals/Orioles. This may be surprising because they're making more money than the Rangers (far superior market). But it does shed some light on why CSN Houston is now bankrupt (and why the Astros in reality got considerably less than the Rangers or Orioles or Nationals). That's another problem with this method.

 

I haven't seen a reasonable method of trying to measure comparable markets. Bortz Media thinks the idea is ridiculous. MLB clearly thinks of it as nothing more than a check (which makes methodology a lot easier if you're just spitballing it). I don't think there's any real agreement. The only two serious parties are basing their decision off of the Bortz Methodology (or something strongly akin to it).

 

I'll discuss the reasons for the differences between the RSDC and MASN based strongly off of the RSDC decision. I think you'll be able to come to your own opinion.

You've clearly done more digging than just about anyone outside the case itself, so I don't want this to seem like I'm nitpicking: don't LA subscribers (specifically TWC subscribers) pay the most because the team's broadcast fees are so expensive? If the Dodgers sold the rights to broadcast SportsNet LA for less money, LA TWC subscribers wouldn't be paying something like $5 per month to have access to Dodgers broadcasts. LA is definitely a more valuable market but in my relatively uninformed opinion, the amount subscribers pay is determined by the market valuation and is not a part of the market valuation.

 

I'm ignoring any sort of information that might be included in the calculation like median household income or price elasticity of demand, just for simplicity's sake. If subscriber ability or willingness is included in market valuation and that's why you mentioned it as such, I'd love to know.


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#133 Matt_P

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Posted 08 October 2014 - 02:52 PM

You've clearly done more digging than just about anyone outside the case itself, so I don't want this to seem like I'm nitpicking: don't LA subscribers (specifically TWC subscribers) pay the most because the team's broadcast fees are so expensive? If the Dodgers sold the rights to broadcast SportsNet LA for less money, LA TWC subscribers wouldn't be paying something like $5 per month to have access to Dodgers broadcasts. LA is definitely a more valuable market but in my relatively uninformed opinion, the amount subscribers pay is determined by the market valuation and is not a part of the market valuation.

 

I'm ignoring any sort of information that might be included in the calculation like median household income or price elasticity of demand, just for simplicity's sake. If subscriber ability or willingness is included in market valuation and that's why you mentioned it as such, I'd love to know.

 

What I meant is that core subscribers pay a higher subscriber fee than non-core subscribers regardless of the market.

 

Take MASN in 2011 for an example. Subscribers in the DC, Baltimore and part of the York DMA paid $3.22 per subscriber per month. Subscribers in North Carolina paid $.74 per subscriber per month. I think subscribers in Virginia paid something close to $1.50 per month. This only makes sense --- people living in Baltimore are far more interested in the Orioles than people living in North Carolina.

 

The Los Angeles media market consists primarily of households living in LA which means those people pay the highest rates. People living in Honolulu are part of the Dodgers media market (and all other clubs on the West Coast) but pay presumably pay considerably lower rates for SportsNet LA then someone living in LA (or would if they could get it).

 

This means that the Dodgers media territory probably wouldn't broadcast to many more people than MASN does but because nearly everyone lives in the core region (LA) their territory is far more valuable.

 

One reason why CSN-MA has higher subscriber per month rates than MASN is because they don't broadcast to North Carolina or the Harrisburg DMA. I also believe there's an issue with some of the households in Virginia DMAs that they don't all have good enough equipment to get MASN/CSN-MA or something. They only have 4.7 million subscribers to MASNs 5.9 million subscribers with each network presumably having the same amount of subscribers from core areas.

 

I'm going to be away until Tuesday so I won't be able to respond to anything until then.


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#134 Oriole85

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Posted 10 October 2014 - 04:29 PM

Washington Post: Under MLB’s ruling, MASN would owe the Nationals $300 million in rights fees


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#135 PatrickDougherty

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Posted 10 October 2014 - 04:38 PM

Washington Post: Under MLB’s ruling, MASN would owe the Nationals $300 million in rights fees

“Like the Nationals’ analysis, we find its comparable analysis to be results-oriented rather than realistic,” the ruling states.

Imagine that. Both ownership groups using whichever methodology favors their desired outcome.


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#136 Matt_P

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Posted 14 October 2014 - 08:26 AM

Imagine that. Both ownership groups using whichever methodology favors their desired outcome.

 

Bortz Media stated that there were no real comparables to the Orioles and Nationals and that this whole exercise was of limited worth. But since they needed to do it, they felt that the Rays, Marlins, Rangers and Astros were the best choices. It's not like Bortz claimed they were good.

 

I would say that the only reasonable comparables at the time were the Rangers and Astros (my #1 choice). But in retrospect, it's clear that the Astros are a terrible comparable because CSN Houston went bust because no one would pay for their programming. And the Rangers deal hasn't even started yet so Fox Sports Southwest could go bust (highly unlikely). Deals go bust all the time (see the Astros, Royals, Twins, Indians, etc etc).

 

How can you possibly use deals that haven't started yet before you know whether they'll work? And how can you possibly use deals that are established and therefore obsolete?

 

Comparable analysis is nothing more than guesswork. There are so many required assumptions that by definition it can't be realistic. The reason that you do it is to make sure that you're in the right galaxy. If the Padres rights are worth $30 million and the Angels rights are worth $60 million then it gives you an idea of how much the Nationals rights should be. Although, you still need to control for the fact that the Padres and Angels deals are more than three times longer. If your result is $95 million then that means you should check your numbers again.



#137 aurelius

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Posted 14 October 2014 - 09:37 AM

Just seems the nats asking for the moon and the sun. Just part of an overall strategy I would guess but not sure what that would be. The mere fact that because nobody's watching their games doesn't mean they cannot charge whatever they want?



#138 RShack

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Posted 14 October 2014 - 01:20 PM

The mere fact that because nobody's watching their games doesn't mean they cannot charge whatever they want?

 

Apart from the merits, that's a hilarious sentence....


 "The only change is that baseball has turned Paige from a second-class citizen to a second-class immortal." - Satchel Paige


#139 BSLChrisStoner

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Posted 20 October 2014 - 08:19 AM

Camden Depot: MASN and the RSDC

http://camdendepot.b...n-and-rsdc.html



#140 Matt_P

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Posted 21 October 2014 - 11:46 AM

The Nationals/MLB just submitted a huge amount of documents including the Nationals Statements and Rebuttals.

 

It's fascinating because Bevilacqua's arguments are so dishonest. He literally changes contexts in the middle of sentences. And if I can catch it, then presumably everyone else can also. Who did he think he was going to fool?

 

I think the argument that's my favorite is the one he makes when he claims that MASN should increase its rates in North Carolina to $1.16 per subscriber while convincing Time Warner to provide carriage. In the real world, the FCC claimed that asking Time Warner to pay .60 cents per subscriber was an unreasonably high amount.

 

Although the argument that Comcast would have offered to pay the Nationals $20 million on a non-exclusive basis is a close second. Comcast controls the market. Why would they possibly show media that they already have under their control?






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