A Hearing We Will Go! Comcast vs. MASN (MLB)

April 7, 2006

Today at 12:30 PM is the congressional hearing regarding the Comcast vs. MASN (and Angelos) issue. Everyone involved has their evil sides, but hopefully a resolution will be made that allows all local fans to watch the games because that’s what counts. Last night, Comcast made a last ditch effort to come to an agreement with MASN, but there was no way MLB/Angelos would agree to it, so it appears to have been solely for PR. Comcast even tugs at those heart strings by stating the Nationals (and potential owner) should have the freedom to retain their own television rights and allow networks to compete for them. Which, honestly, is a valid point. Unfortunately, those rights were given away before the team landed here and it may be too late at this point.

Watch this thread for live-blog updates after 12:30 PM! *Disclaimer*¬¨‚Ć While I type fast, I’m not quite up to the speed of speech. Most of the quotes below are mostly accurate, but I may have rephrased or skipped some sentences. Take that for what it’s worth.

12:35 PM People are taking their seats and a cell phone rang. Someone talks about getting a bunch of guys together for a Kodak moment.

12:37 PM Introduction by Davis – Boy he talks faster than DC council members. This isn’t going to be easy! I can’t imagine how frustrated I would be to find out Livan Hernandez had a no hitter and I couldn’t flip on the TV to see it. If you air it, they will come. I’m disappointed that the sophisticated businessmen can’t make a deal. The only people affected are the fans. I’m not personally affected as a Cox customer. I plan to watch as many as I can. Nothing against sports bars, but I prefer my own sofa. For over 30 years fans have waited for the National Pastime to return to Washington. As part of the deal, MLB made a series of concessions to the Orioles, one granting them TV rights – one called Mid Atlantic Sports Network (MASN) which competes directly with Comcast SportsNet.

Nationals returned with great success. 2.7 million people went to home games and RFK was rocking once again. Part of the success has to do with the gov’t of DC which has made a substantial financial commitment with the stadium set to break ground and open in 2008. Ensuring the games are widely available on television is an important aspect of that. Other providers include Cox, Charter, DirecTV, Verizon, and Adelphia. MASN has demonstrated an ability to make a deal happen. Not so when it comes to making a deal with Comcast. Fans want to know why. Is MASN charging too much money? Today we will find out why. We will hear from them and local officials. I will now recognize Mr. Cummings from Baltimore.

Mr. Cummings: 75% of fans can’t watch the games. After a three decade absence, basball has returned. Despite the success of the 2005 debut season in which they attracted 2.7m people, secured funding for a new stadium, and made a competitive playoff bid, Nats fans continue to endure limited access to games. The MASN which is owned by Orioles owner, Peter Angelos, televised 125 games. Unfortunately for Nats fans, not all were broadcast on cable systems. Last Monday marked the first game of the 2nd season, while over-the-air televised games dropped, cable providers have agreed to carry MASN. Specifically, Cox, Charter, DirecTV, RCN cable and Verizon’s FiOS. (interrupted) What impact has MLB’s anti-trust exemption had in creating this situation? No fan of a team, whether Orioles or Nationals, should be denied the opportunity to watch the game they love.

Mr. Burton (Indiana): I apologize – I thought we were here about the Indiana minor league team. That’s a joke folks! (haha) Maybe this hearing can serve as a catalyst – I understand Comcast offered a compromise. I hope this can be worked out before it goes further in the courts. Facts:

Peter Angelos opposed return of baseball because he worried it would divert his fanbase and revenue. He was the only one opposed to the move. To appease him, MLB gave him a sweetheart deal of the tv rights for $21m. Published reports have estimated the rights at $750m dollars. That’s a pretty good deal. Angelos intends to create a second regional sports network – MASN. MLB owns part rights most likely sold. Because MASN is unlikely to survive with only one team, Angelos intends to package both teams’ rights with the network. Comcast has the rights to Orioles and rights to first refusal after the 2006 season. The suit centers on the definition of a third party. Comcast sued Orioles due to the third party provision. MASN is clearly a 3rd party subject to the 3rd party provisions. Believes Angelos triggered 3rd party by partnering with MLB. Comcast lost the case and has appealed this decision. The Orioles have moved to bypass the appeal to expedite. That is also pending. The Orioles have complained to FCC that Comcast’s refusal is a violation of program carriage rules. While they forbid discrimination, Comcast has refused because it contains what Comcast says is illegal content because the network was created through a breach of contract. No cable carrier has ever been asked to reward a (feed cut off)…

Mr. Van Hollen: We’re excited to welcome baseball back and we believe there’s room for both – an American League team and a National League team. We’re going to be able to see the Orioles on SportsNet tonight and the Nationals over the air on channel 20. But after tonight, we won’t be able to watch as many games. I have children who are baseball fans and want to watch how Soriano starts the season, how Patterson pitches, how rookie, (B?)Ryan Zimmerman performs. We’d like to see as expeditious a resolution as possible so the fans can watch their team and enjoy the Orioles and their new team, the Nationals. I hope some progress comes out today.

Mr. Ruppersberger: I’ve been an Orioles fan all my life. As we know now, many Nat fans cannot watch them on tv right now (like I do for Orioles). I applaud Chairman Davis for having this hearing. He is an avid baseball fan – he used to like the Orioles, and now he’s a Nationals fan. As a former Balto county exec, I worked closely with Comcast. Comcast has done more to put back in balto county. They wired our schools, did community service, sponsored community events – never said no and always there. I’ve also known Peter Angelos for about 30 years. He’s all about Baltimore – grew up, went to school, businessman in Baltimore. He bought the Orioles because he watned the team to be owned locally. Good man, good lawyer. Deep down, he really does have a good heart. Like Comcast, he gives back to the community. Nats fans don’t care who’s right, who’s wrong, they just want to see their team on tv.

If the fee that MASN is charging is reasonable, almost everything comes down to money. This issue MUST be resolved. The two sides must come together. The Comcast/Orioles contract is up in 2007 and I don’t want the same thing with the Nationals right now to happen to the Orioles. Hopefully this hearing will bring the two sides together. We want the Nats fans to see their team on TV and we don’t want to have the same problem. Let the games begin.

Mr. Moran – ESPN came on last night – turn it on and it’s blacked out. For the vast majority of fans in my district, they couldn’t watch. (sound cut briefly) ability of households to enjoy themselves and take advantage of technology. There’s something unique about sports – it’s a unifying element that is important to our community. Tom and I were just in a parade out in Fairfax City. I can’t believe we made it back in time. Boy I’m glad we made the parade – those GMU basketball players and the community want an opportunity to say thanks – thanks for making us feel good. Redskins achieve that and the Nationals will as well. I have a lot of misgivings over a situation where the owner of a competitive (sic) team controls the broadcast rights for Washington’s team. I understand 25 years ago there was a deal and the country was cut up and the Baltimore area was assigned to Mr. Angelos. Although Washington had a team and I don’t think they objected when the Orioles came into town. I don’t think it’s fair when broadcast revenue is more important than real estate. It’s an issue that our constituents are very much concerned about. On the other hand, Cox has reached a deal and will tell us their perspective on whether it was fair, and they are providing these games. Comcast has chosen not to – I assume it may be about the bottom line or maybe it’s a matter of principle. This is too important to our community and if the Nationals are going to succeed, important, the owner needs enough revenue to buy competitive players and sustain that fanbase. To do so, they have to be able to show the games on television. Davis’ objective is the three of you can make it work and figure out a way to benefit the fans, that oughtta be the bottom line, not the dollars and cents.

Ms. Norton: Mr. Chairman, you are known as a baseball maniac who memorizes statistics. I can attest to the fact that when you have focused on baseball – such as cheating in baseball by the use of steroids – you have always focused us on a serious concern. There is joy in the city after the return of baseball in 34 years, especially Washingtonians like me who remember baseball. We remember Griffith Stadium and the Washington Senators. Senators gave the city an identity distinct from federal Washington. When baseball left, it took something away from Washington’s ability to claim being a great American city. Baseball is a very slow learner in coming to grips with this reality. The return to baseball is a counterfeit slogan – with 75% of games blacked out by a lose-lose – line the pockets of baseball. Baseball gave the Bronx cheer to the city council which is footing the bill, however the council proceedings were typical of elected officials and especially one involving the city’s resources. What are we to think of baseball and Comcast who are caught in a lock over the public view of silly politicians. We are told they focus on the bottom line. Nationally local tv and radio contributed half of its broadcast revenue to baseball, far more than other sports. The A list teams are all located in major media markets where the teams have used tv to grow their fanbases and revenue. So why are baseball which finally got the sense to move a long suffering team to a platinum major market, and Comcast leaving money on the table and the fans with dark screens. Is MASN the startup fledgling network even talking with Comcast? The fans are clamoring and deserve more than dark screens. This may be the first time all the relevant actors have been in the same room or sat at the same table.

PANEL:

Swearing In
Bob DuPUy, Peter Angelos, David Cohen (Comcast), McCullom from Cox

Mr. DuPuy: I am president and COO of MLB. MLB understands the concerns of this committee over the lack of full telecast distribution because we share that concern. Today we are very proud of how we serve the public on regional, etc. telecasts. Virtually all of our games are available in the local markets, increasingly games and highlights are being distributed through new technology. We too are delighted in the return of baseball to the nation’s capital. We would like to see the Nats telecasts made available to all fans. That was our expectation when we entered into agreement with MASN. After a long process, MLB settled on DC as home to Nationals. Any relocation had to be done in a manner to maximize viability and popularity of all our teams, including the Orioles. Mr. Angelos and I entered into lengthy discussions on moving the team less than 50 miles from Camden Yards. We entered into a deal that we thought was fair and has been misreported. On April 14, 2005 a report by Anthony Williams and printed in the WAshington Post was fair, I would like to point out. It provides a revenue stream to the Nationals for their telecast rights. $750 is more than 10 higher than any team receives for its rights. Broad distribution of Nats and Orioles – rather than carve up, we chose to dist both teams across the entire area. Many teams have created local sports networks and distribution of those networks has taken time, as it has here. We are disappointed there is legislation regarding this. MASN does have deals in place with (blah blah – names them all again). For the benefit of Nationals fans who are Comcast subscribers, we urge an ageement be met.

Mr. Angelos: I have listened to what was said, but not address. Rather I’m here to ask that you do whatever you can to distribute the Nationals games over pay television systems. While this may seem paradoxical to you that the owner of the Orioles – part owner, we do have 18 other owners who conributed -I’m committed to promoting the distribution of Nationals games because we have a vested interest in making sure that effort is successful. We now have five distributors. 2 million subscribers to these companies. MLB agreement was one that would benefit both clubs. By establishing a network composed of the two teams distributed the entire territory – Lancaster PA down through PA, all of MD, all of DE, all of DC, all of VA, 13 counties in WV and half of the state of NC. We now share that territory with the Nationals and we are promoting the inclusion of the Nationals games right through that territory along wtih the Orioles projected by Comcast in the final year after 10 long years. The highest rights fee we have ever received in those 10 years from Comcast for that entire territory is in this particular last season – the highest they have ever paid is $418 million dollars (not sure I caught that) – we believe the $21 was a much more sensible and kind arrangement. I believe that will ultimately be the arrangement the Nationals will have once a new owner is selected. In addition to the $20m that we paid in 2005, $20 2006 and $25m in 2007 – we believe that they initially start with owning 10% and after a period of years will own 33% of the RSN. There have been comments about my opposition to the location of the Nationals in DC. When we learned that that was goin to be accomplished, we were concerned. 1. that the inclusion of a team some 35 miles away if you measure from border to border – brings another team roughly 8 miles away from one of the counties that is part of our franchise – that is Howard or Anne Arundel county and so on. Formerly we enjoyed all of that territory. We made a decision to live with that arrangement. WE arranged to work things out with MLB to share our territory with the nationals to establish the RSN that has been talked about and create an opportunity for both teams to benefit, and moreover to allow the Orioles to make extra revenue for what is expected to be a 25% reduction in attendance as well as other potential dillution of income that the club has been accustomed to for 30 years. The territory has been the Orioles for more than 30 years. It is now the territory throught the efforts of Mr. DuPuy of both teams. The purpose, therefore, of asking that this arrangement be made is to make up for the expected losses that our team will suffer (wow, he sounds like a lawyer!). The comment that we control the games is incorrect. We can present the games, but the ultimate control of what’s going to be paid for the rights is in the hands of MLB and will remain there. If the Nationals are dissatisfied with the fee structure, they have a right to complain to MLB to survey for fair market value. I think that’s important to understand that we don’t exercise any authority over the team, we can’t set the rights fees without MLB. Quality standards are also up to MLB standards. The issue is not the litigation – the issue is why doesn’t COmcast put the Nationals games on their distribution system? We believe Comcast wants to protect what they had – where they don’t have any competition and deal with the sports teams on the basis of what they think is appropriate. One might say that’s an understandable business attitude. I believe they have an obligation to show the games. We have approached them five times and they have refused – they won’t even talk to us about it. No discussion. We’re ready, we’ve been ready for over a year. I’m sitting next to Mr. Cohen and I’m ready to shake his hand and make a deal right now. That’s up to them. The price – our breach – we carefully made sure are just about what Comcast charges and maybe a tad less, and when we have the Orioles in 2007 along with the Nationals, actually our rate will be less than what the Comcast level is presently. I urge you, do not be deceived by the arguments that are being advanced by Comcast – give those comments no credence. The lawsuit that Congressman Burton alluded to was tossed out of court by the judge because they failed to state a causive action.

Mr. Cohen: Let me start by making a clear and unmistakable point – we are fans of the Nationals and committed to carrying as many games as possible. Comcast has always supported the return of baseball, which distinguishes us from the Orioles. It is certainly Angelos’ right to advocate on behalf of the Orioles economic situation. Odd – original sin in episode. MLB decided to compensate the Orioles by giving them Nationals television rights. This is the first time in history the team’s rights have been handed over to another franchise. Comcast is agnostic, but we do object to how MLB has chosen to compensate the Orioles. By doing this, MLB has tried to foist onto DC cable customers, their obligation to compensate the Orioles. That is unfair to our customers and plain wrong. The Orioles and MLB has created MASN which is trying to charge more than $2/month per subscriber for a channel with no other programming than Nationals games. Even today, one year after launch, no sports newscasts, no college games, and no other sports contests. For 8,000 hours a year, MASN offers nothing but a dark screen. Ind analysts believe they’re askign too much. Assuming costs passed on to customers, this arrangement will transfer more than $600m from constituents to a business that is controlled and majority owned by the Orioles. At the same time this hurts our customers, we believe it also hurts the Nationals. According to the website and confirmed today, they paid the Nationals $20m which is too low. We know this because we offered to pay more. To set a market rate, have the rights available on the market to see what people would pay for them. Even more unbelievably is the rights deal states that until 2011 the Orioles will not get less than the Nationals for rights. Nationals 8th ranked DMA – Baltimore 24th ranked DMA. Last year, Orioles negotiated over the air broadcast deals that did not provide coverage in many suburbs for Nationals. This year it was the Orioles, not Comcast, that decided to slash the number of Nationals games from 81 to 39 games over the air. WE’re not here to assign blame but find a solution. Return the rights where they belong – to the team and let them decide. MASN can participate in the process as well as other cable providers. If the parties agree, Comcast will immediately broadcast all games. We’ve also offered a rights fee the same as MASN pays for non-exclusive rights to games. The fans will benefit and the Nationals will benefit through a doubling of their rights fee (dang, that sounds like a deal to me!). That requires undoing the original sin of the tv rights. Our proposal will get the games on the air fast and will give the Nationals extra revenue, and will help the fans. That would be a grand slam.

Mr. McCullom (sp?) – VP of Cox Communications: Cox does a lot of community service. Any business that retails a product is subject to market prices. Our programming costs are projected to increase 13% and with MASN will grow to 18%. The sports league and team owners are able to pass on their costs, insulating themselves. Therefore, owners are are removed. Cox is being up front and truthful with subscribers about their rising costs. We negotiated extensively and on March 8 announced we’d carry MASN. While the terms of that agreement are confidential, I can assure you it did not come cheaply and will affect prices. Our baseball starved community will pay this to see the games. This is a no-win situation for us and our subscribers. We entered an agreement with little negotiating room as a small player in the metro area. We hope Comcast as a large provider will enter into this to allow other providers more negotiating ability. The owners of MLB and commissioner Selig have granted to the owner of the Baltimore club what appears to be a sweetheart deal. Money transferred from pocket of new Nats owner to Orioles through MASN for monopoly rates. Cox’s mantra is we are your friend in the digital age. I am directly accountable to these customers. I implofe all to reign in prices and stop holding the fans hostage.

Davis: Are we any closer to naming an owner?

DuPuy: We’re certainly closer – every day we get closer. Yes, now that we have – thanks to the hard work of Williams, Cropp, and others, we have a signed lease. I’ve met with four groups – I would expect it to happen over the next four weeks.

Is MASN more expensive than Comcast sportsnet? Are you paying more for the games.

Cox: I carry them both. The deal was a very onerous deal and the price was costly.

Davis: Is Pay-per-view an option?

Cohen: I think you’ve heard the industry’s perspective on that. I believe an ala carte approach will result in less choice for the consumer at greater expense. As a short-term bridge, if someone wants to talk to us about offering Nationals games on a more limited basis, it is something we’d be willing to talk about. Our primary interest is taht the Nationals, fans, your constituents are treated properly.

Davis: but you haven’t been talkin to Mr. Angelos. Maybe MLB could be the adult.

Cohen: I’d be happy to have MLB be another adult. I quibble a little with Mr. A’s characterization that there have been no discussions – there have been discussion. Our offer from MASN is the same offer that MASN has always given us. A meeting has been scheduled.

Davis: Is the offer any different than the offer to Cox?

Angelos: No, it is not. And no our rates are not different than Comcast. They are the same so we would be fair to the subscribers.

Davis: But Comcast is 24/7.

Angelos: We have under construction a full facility to provide 24/7 of the kind he refers to. We’ve only been at it for a year! Besides the cooperation of our monopolists – we’ve been sued, castigated, villified, lawsuits filed without merit. Publically that we are involved in inappropriate business or being unfair. July 15th of this year.

Davis: Next year, MASN will have Nationals as well as Orioles rights.

cohen: Comcast has clear contractual rights to continue to carry the Orioles. We believe the court was mistaken and we’ll be able to vindicate our rights. Otherwise, we will end up in the situation you describe. We respect the rights of MASN to exist in the marketplace.

Davis: Two monopolists – MLB, granted an antitrust agreement – and your cable company!

Cohen: I don’t think so. If you look at this whole market MLB has defined. In that entire market, there are 6.9 million households. We control less than a third.

Davis: But there are many other cable companies much smaller than you and you have a third of the market.

Cohen: It’s time to protect the customer’s rights. It is not fair to characterize this as a dispute between a corp giant and business leader in Baltimore. This is because of MLB and the way they have structured it. I am the company that does have the ability to stand up and say we’re going to protect the rights of the customer, your constituents.

Davis: This would be helpful, Mr. DuPuy, for MLB to step in and look out for the fans. We’ve waited for over 30 years and to get fewer games than last year, it’s a slap in the face. It’s like giving us half a team. MLB can step in and get these parties together if only for a one year agreement.

DuPuy: We’d be happy as long as it doesn’t impede contractual obligations.

Davis: I’m not asking you to do that. This isn’t helpful to anyone over the long term.

Mr. Van Hollen: Are you willing to go forward NOW to reach an agreement?

Cohen: There are many reasons – standing up for our customers, breach of contract, price, programming available. Our willingness to do what is right and make sure we end up – if we sign a deal wtih MASN, we are the last thing standing to protect that Nationals’ rights. Mark my word, if we sign that, they will have a second class franchise and someone will be screaming in ten years asking how did this happen? Who let this happen? We are willing to stand up. If we sign this deal… if we had signed a deal, would this hearing be taking place? Of course not. Our unwillingness to sign a deal is keeping a spotlight on the original sin here.

Van Hollen: I understood your answer to be different than the way Mr. Burton characterized. Taking everything you just said, is Comcast willing to sit down with the Orioles and taking all those variables?

(WORK! Dang)

Cox: The deal we have with MASN is onerous and puts significant pressure on our rates. It’s not an apples to apples thing. They have no content other than games.

VanH: Your customers pay more now, right? Now that you carry MASN. As I understand, they have planned in the works to have 24/7 programming. Won’t that make it apples to apples? 2nd they are a startup – comcast – when it started up sportsnet – have you never had a cable channel that just showed games or has it always been 24/7

Cohen: My history doesn’t go back to answer with 100% certainty. We recently looked at two regional sports nets. One with 4 teams and one with 1 – both launched with 24/7 content.

Cox: The difficulty will be baseball is a summer sport. 24/7 assumes a year round network. Comcast clearly has Caps, Wizards, and Orioles today. I’m encouraged by July 1st, but concerned about December 1st.

Cohen: Two sports networks cost the consumers more money – one is best for any area.

Angelos: Totally disputes Cohen. Picks on Cox for coming to table only because Verizon came to Fairfax county as competition (guess RCN in Falls Church never concerned them). No Verizon, there wouldn’t be any deal with Cox. They all need competition. That’s why they don’t like us – because we also present competition. I’ll be delighted to show you numbers, maybe not here openly. We have nothing to hide. Mr. Cohen’s statements are a falsehood – just like his legislation is a falsehood.

Davis: It looks like when we have that private meeting, we need MLB in the room (titters from room).

Ruppersberger: (Oh hey! I just realized he’s the congressman for my lighthouse area) Comcast is a good corporate entity in the jurisdiction I represent. Most do put back into the community. You have to look long-term if this position you’re taking is going to affect you and your reputation. OTOH, as a businessman, you have to look at the margins and long-term. My recommendation is somehow you move forward and try to resolve a short-term situation. I know for the long-term you have the court case to resolve and what is MASN? What’s going to happen when the Orioles contract expires? I think MLB has to step up a lot more about where we’re going and they can’t do that until you have an owner and advocate. How much you pay for advertising isn’t going to matter if you irritate the average person. If the Nats can’t generate revenue to be competitive, that doesn’t help you either. Everything has a price.

DuPuy: Addressing several in a single answer. Despite the disclaimer there was no attempt to ascribe blame – I keep hearing the phrase original sin. It wasn’t sin and it wasn’t original – it’s been done around the country before including deals Comcast has been involved in. This is a local issue between MASN and Comcast. They ought to be able to reach a resolution this year. In terms of a long-term solution, that’s what we believe we did – pro-fan and pro-competition. We expanded the territory and allowed all the fans to be fans of both the Orioles and the Nationals, based on performance, stars. We tried to deal with the compensation..

Ruppersberger: How do you deal with the fair competitive price and not a monopoly?

DuPuy: The owners are part-owners of MASN.

Ruppersberger (and his name really is ‘Dutch’!): I think you need to do something short-term until the owners come aboard. The airwaves are not privately owned – they belong to the public. We don’t want Congress or the FCC step in – that’s no good for anybody. If it goes too far and you irritate fans, then that’s when we step in because we represent the people. Let’s get it together.

Moran: You make a deal that gives 90% of the broadcasting rights to a competitor.

DuPUy: We gave 90% of the profits, not the control.

Moran: Ok, 90% of the profits for the broadcasting rights of the Nationals to the owner of a competitor team.

DP: Only after ensuring…

Moran: But isn’t it correct that the two principle sources of revenue is real estate it owns and broadcast rights?

DP: Yes, ticket sales and broadcast rights.

Moran: Yet the deal you make gives the new owners TEN PERCENT, which means they aren’t going to be able to compete – getting the best players

DP: Quite the opposite. The Nationals did not have the product to set up their own RSN to compete. What the Nationals have done is combined and formed with the Orioles to form a competing RSN. They’re getting a full rights deal and plus they never would have had but for the negotiation.

Moran: Baltimore is the 23rd market. DC is the 8th. The income level is twice what it is in Baltimore and twice as many television sets. It seems you set up a situation where revenue that would go to a team owner at some point is limited to 10%, 33% in the future, but Mr. Angelos has into perpetuity control…

DP: I would disagree. In Chicago, the White Sox have a certain percentage, the Cubs have a certain… so too here. They are getting a full market rate for their rights. We’ve created value rather than diminishing in my opinion.

Moran: I don’t understand how you can say that. A team owner who is a businessman is going to have to buy from Mr. Angelos the rights to get his own tv market. Let me also ask because it seems to me there’s another factor. In terms of the revenue that will off-set the cost that Cox and Comcast will have to bear and that’s advertising. If you let them get a fair share of advertising, that covers some of the cost. However, if you say you can get the revenue from the dog show shown at midnight and not the share from the game, that’s something we need to understand. (Did I mention there’s been a red Curly W hat on the podium this whole time?)

Angelos: 75%/25% break. 25% to the entity like Cox, the other goes to the RSN.

Moran: That’s all the advertising?

Angelos: We didn’t originate this approach. That is a standard arrangement in the particular business we’re discussing. We haven’t innovated anything. We have followed the system.

Moran: If you were to buy the Nationals, would you not see it as essential in your interest to try to acquire the broadcasting rights so that revenue would be going to the benefit of the Nationals team and not the Orioles team?

Angelos: Let me point out that the territory we’re discussing, that has been the Orioles home territory for 30 years (ooh, he’s getting heated now). Every baseball has a territory like that.

Moran: No, there isn’t an area that is like the DC area that has been shut out from baseball for over 30 years. We have been at your mercy because you had a financial interest in Washington not having a team.

Angelos: When we purchased the Orioles out of bankruptcy in 93, at that time the Oriole home television territory was as I have described. The purchase as well as the home territory was one of the reasons we made that purchase and was also the highest paid for a team at the time.

Moran: Mr. Cohen, the fact that there’s a lawsuit pending, if found on your side would substantially weaken the position. If you are able to maintain that contract you wouldnt’ have to pay nearly as much to MASN. I do think that Comast has culpability here and I think it’s you who is going to have to yield.

Norton: Mr. DuPuy, you’ve gotten off pretty easy here. I’m sure you watched the council very carefully to see whether it would get through those proceedings. For you that means you get $450m. We haven’t seen much of you in this dispute. You’ve not played any of the roles one might expect MLB to play largely because it is inarguable that the present deal does take resources away from the Nationals in particular and will have a negative effect on their ability to compete. I know Mr. Angelos and understand the delay had to do with the fact – he laid it out very clearly. He was in the position to drive a really hard bargain. Of all the hard bargainers I know, you aren’t nearly a match for Mr. Angelos and he came out with something he believes will not hurt him in the long run. The thing that stands out is in this dispute, there is nobody to speak for the Nationals. Obviously Angelos is going to speak for the Orioles. Meanwhile, here are the Nationals playing baseball every day and not at the table during a dispute that means real dollars for them. At least they should be at the table. And when you were asked when are you going name an insult, you came out with a mantra that is pure insult given the nature of this dispute. I must ask you to detail where you are, what discussions have taken place and to give us a date so we can have someone at this table. We have paid for this team, we deserve to have a voice and somebody who can speak for us. We’re used to not having someone to speak for us on the floor of the senate. I’ll be darned if we don’t deserve more than vague notions.

DP: I believe the deal that was negotiated and renegotiated, I believe it was a fair deal (Norton: I bet you do). It will spur development. We believe the team was represented well by the Mayor. That decision will be made by the Commissioner. Last week for the first time we had a team. All the documents were signed. This has been going on for some time. There have been protracted changes. MLB is putting up for the first time $20m.

Norton: Now that you have a lease – you couldn’t have named an owner without a lease. Now that you have a lease, would you answer?

DP: We’ve assembled the documents, groups came in last week. I’ve met with the various groups. The commissioner has indicated he will name one in a couple weeks. (Slimy bastard – just ANSWER THE FREAKING QUESTION! GO NORTON!)

Norton: A couple weeks?

DP: Yes

Norton: *Sigh*

Norton: Sir, are you a lawyer? (to Cohen)

Cohen: I am.

Norton: In that case I’m astonished by the way you said the matter should be resolved – to nullify the agreement that has been made. I agree it’s unfair.

Cohen: I’m a good enough lawyer to know I wasn’t asking court or this congress to do anything… let me be clear. Notwithstanding Mr. Angelos’ comments, I’ve tried very hard not to castigate him. An illegal legal contract. We are asking MLB and the Orioles to do the right thing for the Nationals and their fans and not use as a mechanism the wallets of cable customers and your constituents.

Norton: I don’t understand why someone like you and Philadelphia would regard that as the way to move.

Cohen: We are willing to talk and discuss and be flexible. We have in front of us the interest of the Nationals (this is beginning to sound more and more like a talking point than anything noble)

Norton: 24/7 stuff?

Angelos: ESPN programming, FOX sports, news, sports magazine that fans want to watch on a regular basis. We’ve made our decision and joined in a contract with MLB which will also include the Nationals directly. The proposal from Comcast for the purposes of preserving his monopoly, we find grossly illegal and improper. The solution is MLB should breach its agreement with us, and we in turn would breach our agreements with those who have signed with us such as Cox for seven years they’ve signed. We offered and we will deliver – not just a rights fee, but we will also produce an ownership interest. They will own this RSN. We would be delighted to sit with them at our earliest opportunity.

(They’re just saying the same things over before Cohen leaves the hearing – I’m saving database space by only posting interesting things from here on out…)

Ruppersberger: Gets them to agree to meet. Suggests MLB comes back in a couple weeks. Talks about looking ten years into the future. Come up with a short-term solution to take care of the Nats. I’m not asking Comcast to give up their long-term legal issues. Mr DuPuy, you have to do what’s right for baseball, ALL of baseball.

Moran: I’m glad your tough guys, I don’t have to worry about hurting your feelings in adverserial proceedings. I do think it should be said that it’s clear there’s nothing approaching illegality or unethical in what has transpired here. I say that quite honestly. Mr. Angelos has engaged in a business transaction. I’d like to see an Angelos clone buy the Nationals (NOOOOO!!! Watch your mouth!! You better just be buttering him up!) I do have a concern about the development of MASN. If it becomes a 24/7 station, you will have the ability to increase rates as I understand it. That’s a concern I have for my constituents. Won’t that give you more leverage over Cox and Comcast? Is that true?

Angelos: I think the whole operation will continue to be under the jurisdication of MLB. We present the games. The ultimate control, rights fees we pay, quality, and concern you just expressed will be carefully taken care of by MLB.

(work interruption)

Cohen: Compulsory arbitration is not something we’d be interested in.

Norton: YES network – 3 man arbitration panel making YES available to cable subscribers on an expanded basis. I wasn’t calling for compulsory arbitration. If all else fails, would you be willing to let somebody else talk with either of you and ultimately both of you to see if a decision could be raised.

Angelos: I am willing, WE are willing (he’s done that a lot – started out saying “I” and changed to “we” like he’s been coached to make it sound less about *him*) to meet the Comcast people at any time and place that is convenient for them. Let’s get it calmed down and get the games out there for that Nationals fans in the interim. If they are truly willing, they should be willing to join in the process and in the meantime put the games on.

Cohen: I don’t understand the question. I don’t think a third party is going to be at all helpful. I think MLB HAS to be involved in this.

Davis: How about we say give us status in a month. We don’t understand why we can’t put the fans first? We’ll look forward to a report by the end of the month.

Angelos: Would the chair ask Mr. Cohen whether or not he would agree to put the games on in the meantime?

Cohen: Our offer is to put the games on immediately as soon as MLB and …

Davis: Let’s just sit in a room and see if we can get these games on while you work it out. We’ll do anything we can – report back to us in three weeks.

*****

Wow, Cohen and Angelos are sitting right next to each other. That must be awkward!! Next panel is cable folks – I’ll post if anything’s interesting, but I’ve really got to get some work done!

Hey cool! I saw Ian Koski from NationalsPride.com on TV!

Posted in Media, Washington Nationals