UPDATED: From 2004 to 2024, the leverage has turned on Baltimore

With a possible sale of the Baltimore Orioles to David Rubenstein and partners, the Angelos family that currently controls the team is now on the clock to help push the sale to the finish line. While this sale should not be as complicated as the sale of the Montreal Expos to MLB — then subsequently to the Lerner family and their partners, these sales often have issues to overcome. All sales of teams must adhere to the rules of the MLB Constitution. That is a key document, and all thirty MLB owners must agree to its terms.

The MLB Constitution is a confidential document comprising of 16-pages filled with an abundance of legal language, and normally you would never have seen it unless you owned an MLB team. But there we have this document because it was an evidentiary exhibit in the first MASN lawsuit brought by Peter Angelos against the Nationals nearly a decade ago.

There is nowhere in the Constitution that states a team relocating to an area not listed in Section 8 “Operating Territories” would cause an existing team to be compensated. But per sources, Angelos demanded compensation in order for the Expos to relocate to the Washington, D.C. region. For example, the Oakland A’s have been approved to relocate to Las Vegas — and that didn’t cause the Dodgers to claim that the A’s are infringing and impeding on their broadcasting area. Well, they are — and nobody is compensating the Dodgers for it. But history shows, the Orioles got very well compensated in documents that were submitted to the courts.

There are more points to make here about the Nationals coming into existence. In 2004, when MLB commissioner, Bud Selig, sought to relocate the Montreal Expos to Washington, D.C. — that was an open operating territory as long as the team played their “home” games in Washington, D.C. or Virginia per the Constitution. But sources said that Peter Angelos threatened lawsuits unless he was compensated, and MLB not only gave him large cash infusions of $150 million (see Section C16 above), but also a funded TV network (MASN) where they would control the Washington Nationals broadcasts in an ownership arrangement that sets in place in the year 2032 at 67 percent owned by the Orioles and 33 percent by the Nationals.

Initially, the MASN ownership split was a 90 percent to the Orioles and only 10 percent to the Nationals, with the Orioles pocketing tens of millions in profits per the legal documents as MASN was very profitable out of the gates. On top of that, Angelos received minimum revenue guarantees, and a sales price guarantee by MLB if he ever sold his team. Additionally, Peter Angelos named his son, John, as President of MASN in 2006 per reports. Can you imagine that salary and bonus structure? Did John Angelos have experience running a sports network prior to being handed the job? The production quality of MASN was poor, and the programming was often called into question.

Yes, in 2004 Angelos had all of the leverage, and he squeezed Selig to a point that made the Orioles thrived. Now they are a Top-4 most profitable team in 2023 per Forbes magazine, and valuable enough to sell for a reported $1.725 billion this week. So 20-years later, it is MLB that has all the leverage now on Angelos, because that constitution states in Section 2B that 75 percent of the 30 owners control the fate of that sale which will require 23-owners to vote “yes”, and this has nothing to do with the Rubenstein Group trying to buy the Orioles — this is more about payback we were told by a source about the way the owners feel about Angelos. That sounds personal.

If the Lerners can get at least seven other owners on their side, they can make this very difficult for Angelos and the Rubenstein Group. But it will take leverage, and calling in favors. Any action will need current commissioner Rob Manfred to make this right, and our sources think he will. One source thinks if the Lerners can get ahead of this, they will get what they want before the team is officially sold. Are the Lerners ready for this or will they be passive and just step aside?

The thinking on an Orioles fan site reads that if MASN is sold, “How would the Orioles maintain their advantage if it’s sold? It seems like it wouldn’t be in their best interest.” As our source said, the MASN deal and other concessions that Angelos got was to make sure the Orioles franchise stayed financially viable with a team moving closer than 40 miles away. But in 1953, the Washington Senators received no compensation when the St. Louis Browns relocated to Baltimore to become the Orioles. Other teams haven’t been compensated during relocations. Washington, D.C. and Baltimore had side-by-side teams for decades and were both in the American League.

Nobody handed Angelos the Washington, D.C. market prior to 2005, he just took as much as he could, and even set up an Orioles store and ticket office a few blocks from the White House in Farragut Square. At the time, the Orioles were the only game in town. Today, the Orioles still broadcast to homes in the D.C. area. What if Angelos welcomed the Nationals in 2005 and marketed to fans to retain the Orioles as their American League team since the Nats were going to the National League? A smart businessman would have done that and not tried to alienate fans and drive them away.

During a 2004 radio interview on WBAL in Baltimore a few months before MLB approved the relocation of the Expos to Washington,  Angelos declared, “there are no real baseball fans in D.C.”

Well, the Orioles are very strong financially now, and they have small-market protection. Why would a new owner paying $1.725 billion need a controlling interest in another team’s TV deal when that was meant to be a concession for Angelos? Well, Selig didn’t put a due-on-sale clause in the MASN contract so that was a problem that makes this an ongoing issue as the current MASN deal was set to perpetuity. But now with a possible sale of the team, all of that can change.

Again, now is the time to right the wrong based on the leverage that Angelos had on Selig at the time. The Orioles’ owner didn’t hold a gun to the commissioner’s head and have him under physical duress — but let’s be real, Angelos squeezed Selig hard because the clock was ticking to get a deal done for the 2005 season. That MASN contract has been horrific for the Nationals, and it actually guaranteed that in annual rights fees that the Nats and Orioles would be paid the same annual rights fees beginning in 2007, regardless of the differences in the market size as you will see in the last sentence in Section 2J3.

By the numbers, the Nats have the 8th largest TV market per Nielsen ratings, and the Orioles have the 28th. Washington is also a Top-4 market in demographics due to the wealth. By the way, Nashville is actually a bigger TV market than Baltimore — but yet the Orioles by that 2004 contract get overpaid by design. So if the Orioles get overpaid by $30 million a year because of that “equal annual payment” clause and the Nats own 33 percent of MASN — that is like supplementing a free $10 million out of the Nats pocket if you do the math. That just is not right. This has to be fixed.

With nearly 10 years in the courts fighting out annual rights fees between MASN and the Nationals, in December, the two sides finally came to terms on rights fees through the 2021 season per reports.

Paybacks are hell.

UPDATED Feb 8: News breaking on MLB wanting the MASN Nationals ownership to revert back to the Nats as we theorized.

“All I’ll say on that is that change always produces an opportunity,” Manfred said during a news conference when asked about the MASN situation and the sale of the Orioles. “We’ll see. We’ll see.”

“I’d like to get it done,” Manfred said of approving the Orioles’ sale. “I’ve never been comfortable with protracted approval processes. Once it’s public that there’s going to be a sale, I think it leaves both the departing group — [John Angelos is] not really departing but — the one who’s no longer going to be the control person and the one who’s about to become it, it leaves them both in an awkward spot. So, we just want to get it done as quickly as possible.”

If they in fact want to change the Orioles ownership by Opening Day which is just 48 days away, they have just over six weeks to get it done. That would mean possibly having the Nationals on a new network too — which would mean the Nats have to simultaneously start shopping the possibility of new RSN deal. The obvious partner — Monumental Sports Network, which is controlled by Ted Leonsis and his partners.

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