The Nationals finally have an owner not named “Major League Baseball.” Real estate developer Ted Lerner, together with former Atlanta Braves president Stan Kasten and a whole host of minority shareholders coughed up $450M and bought the former Expos from the 29 other major league clubs. The sale of the Nationals to the Lerner/Kasten consortium represented a gross profit of $330M for MLB which, even after tax and expenses, should still represent a nice little boost in revenue for each ballclub. Although the sale took far too long to come to fruition and probably cost the Nationals a legitimate chance at the post-season in 2005, it is good for baseball to rid itself of this gross conflict of interest.
Lerner’s group represented the best option among the eight groups seeking to buy the Nationals because of his ties to the Washington, DC area and the fact that he is the single-largest real estate holder and developer of private land in the capitol and surrounding suburbs. Basically, if there’s a building that doesn’t say “United States Department of _________” then you can bet Lerner has a piece of it. So now you can count on Lerner pouring cash into the neighborhood around the ballpark, making it his own personal playground. He’ll make sure that the area around the ballpark is safe, clean, pleasant for families and ultra-expensive for potential homeowners and businesses. None of this will impact the Nationals themselves but as long as Lerner’s happy with his investments then the Nats (an ancillary piece of his larger development puzzle) have a shot.
Unfortunately, it is my duty to predict a dire future for the team and Lerner’s investment. In the settlement between Baltimore Orioles owner Peter Angelos, Commissioner Selig, and the 28 other team owners, Angelos walked away with 90% of the rights to the newly-created Mid-Atlantic Sports Network (MASN) which would broadcast both O’s and Nationals games in the Baltimore/Washington TV markets. The settlement called for Angelos to cede up to 33% of those rights to the future owner of the Nationals once the sale of the team was complete but that still gives Lerner only one-third of the revenues from his team’s broadcast rights and related TV advertising.
Further complicating matters is a separate lawsuit between Angelos and MASN, where the two disputing parties cannot agree to the cost of subscriber fees being charged to Washington, DC Comcast Cable subscribers. Thus, MASN has pulled all Nationals games from local television until this matter is resolved.
While the $450M pricetag did not include any significant debt obligations for the publicly-financed baseball stadium being built (DC taxpayers are on the hook for close to $620M for that puppy), Lerner will have to hit the ground running in order to make up for lost TV revenues. He’ll likely have to invest in a privately-held radio station with strong enough signals to reach into central portions of Maryland and Virginia and he’ll have to figure out creative ways to keep the stadium full while keeping costs down.
Without his fair share of the TV revenue, I don’t see how the Nationals will stay afloat. Perhaps the Nationals will be his labor of love and they will be subsidized by his real estate investments but, realistically, a businessman won’t keep a cinderblock tied around his neck for very long. It’s too bad for Washingtonians and baseball fans everywhere…
Lerner’s group represented the best option among the eight groups seeking to buy the Nationals because of his ties to the Washington, DC area and the fact that he is the single-largest real estate holder and developer of private land in the capitol and surrounding suburbs. Basically, if there’s a building that doesn’t say “United States Department of _________” then you can bet Lerner has a piece of it. So now you can count on Lerner pouring cash into the neighborhood around the ballpark, making it his own personal playground. He’ll make sure that the area around the ballpark is safe, clean, pleasant for families and ultra-expensive for potential homeowners and businesses. None of this will impact the Nationals themselves but as long as Lerner’s happy with his investments then the Nats (an ancillary piece of his larger development puzzle) have a shot.
Unfortunately, it is my duty to predict a dire future for the team and Lerner’s investment. In the settlement between Baltimore Orioles owner Peter Angelos, Commissioner Selig, and the 28 other team owners, Angelos walked away with 90% of the rights to the newly-created Mid-Atlantic Sports Network (MASN) which would broadcast both O’s and Nationals games in the Baltimore/Washington TV markets. The settlement called for Angelos to cede up to 33% of those rights to the future owner of the Nationals once the sale of the team was complete but that still gives Lerner only one-third of the revenues from his team’s broadcast rights and related TV advertising.
Further complicating matters is a separate lawsuit between Angelos and MASN, where the two disputing parties cannot agree to the cost of subscriber fees being charged to Washington, DC Comcast Cable subscribers. Thus, MASN has pulled all Nationals games from local television until this matter is resolved.
While the $450M pricetag did not include any significant debt obligations for the publicly-financed baseball stadium being built (DC taxpayers are on the hook for close to $620M for that puppy), Lerner will have to hit the ground running in order to make up for lost TV revenues. He’ll likely have to invest in a privately-held radio station with strong enough signals to reach into central portions of Maryland and Virginia and he’ll have to figure out creative ways to keep the stadium full while keeping costs down.
Without his fair share of the TV revenue, I don’t see how the Nationals will stay afloat. Perhaps the Nationals will be his labor of love and they will be subsidized by his real estate investments but, realistically, a businessman won’t keep a cinderblock tied around his neck for very long. It’s too bad for Washingtonians and baseball fans everywhere…
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