Something Smells Rotten in the TV Rights Dispute in DC

Maximizing profits and income is what businessmen do. But somehow, when they are caught doing it as baseball owners it takes on an uglier dimension because they operate in a protected environment. MLB, Inc. is an enterprise that operates outside the scrutiny to which normal business owners are subject. The largely un-examined, private country club atmosphere has been used to the benefit of Major League Baseball owners for more than a century, but someone may have left the door ajar when they negotiated the deal for the Montreal Expos and there is a funny smell coming from inside.

From the moment that Major League Baseball took over ownership of the Montreal Expos and allowed Jeffrey Loria to leave town for Miami, there have been many questions but no answers. The thirty owners who comprise Major League Baseball, Inc. became owners of the Expos and quickly realized that it was an economic albatross that they needed to shed. Denied the ability to contract the team and thereby increase their overall stake, they sought a new strategy.

They put the team up for sale and moved it to DC.  It was never certain that Washington was the ultimate destination of the team, but they had a stadium and the team could make more money playing in front of the starved fans in the Nation’s Capital than in Montreal, so the trucks loaded up and headed for Maryland. One of their own, Peter Angelos, stood to lose if the team were left in DC permanently. He justifiably argued that the value of his team would be diminished and Major League Baseball rightly offered to compensate him. But of course they would never do that from their own pockets, so they gave him someone else’s money, subtracting from the future stream of TV revenues from the eventual purchaser of the Expos and giving that money to Angelos.

But they could not help themselves, they were businessmen, and so when the chance to sell the team for even more money than the asking price was floated, the owners in charge of the sale were all in. The idea was to drive up the price by telling the new owners of the nascent Washington Nationals that MLB would assist in diminishing the economic drag of that TV rights deal that had been worked out with Angelos. Get it? This is all a club and we got the votes. We are going to get you that money back, just wait and see.  Sign here on the dotted line.

And so the Lerners paid $100 million more than the asking price for the Washington Nationals because they knew that Bud Selig was on their side. And sure enough, he has made every effort to follow through. But the one thing he did not foresee was how cantankerous Peter Angelos could be, how much of a lawyer he could become when not out with the used car salesman crowd.

Which is how we got to where we are now: the New York Circuit Court. It is the very same one from which Supreme Court Justice Sotomayor ruled against baseball in the 1994 player’s strike. The presence of the court has made the owners nervous and justifiably so. The first ruling was amazing in its clarity. Major League Baseball was colluding once again, but this time it wasn’t against the players but against their own. Deciding whether Major League Baseball was trying to cheat the Lerners or Peter Angelos depends upon which side of the Patuxent River you are on. The truth of the matter is that MLB was trying to cheat them both for the benefit of the rest of the owners.  What a gang.

The courts are involved now and it will be fun watching the fracas. If the legal proceedings continue, Major League Baseball might have to turn over all of the pertinent information about the agreements to sell the Expos and the ensuing sale to the Lerners. All of the emails and any written correspondence between the Lerner Family and the front office of MLB, Inc. will suddenly be open to the public in ways unheard of before. Bulldozers will be allowed into the swamp and no telling how many bodies they will find.

The issue is a very partisan one in the Baltimore-Washington area. Baltimore fans cannot understand how the Lerners could possibly have bought the team knowing full well that there were restrictions on the deed, but have now hired a lawyer to help them wriggle out from under that initial agreement. Washington fans cannot understand how their team should be penalized for being the new kid on the block. They are one of the biggest media markets in the country and will be treated as such by Major League revenue sharing arrangements. Yet the agreement with the Orioles will give them less revenue than most small market teams. Unfair! They cry.

That’s why they call it baseball. The line runs from Charlie Comiskey down through the ages to Peter Angelos. The owners have been described as a self-absorbed, greedy, conniving amalgam of cut throats and swindlers; even worse, they have been called used car salesmen. As a baseball fan you agree to let them open your wallet and take, and take, and take. $10 beers?? No problem and pass me one of those $6 hot dogs. What a ball game!!

The protected class indeed. It will be interesting whether the whole thing continues in court for very long, or whether the two parties settle. The Orioles and Nationals are both members of the club and know that they benefit from membership. Going to court may sound good to them now, but pride goeth before a fall. We will see just how proud they are when the bulldozers crank their engines and head for the swamp.