When Near Monopolists Collide

Major League Baseball moved the Montreal Expos to Washington, with the relocated team renamed the Nationals, just about a year and a half ago. Doing so, a new franchise was placed very near to an existing franchise, the Baltimore Orioles, which had come to rely on revenues from the Washington market. These revenues came in the form of substantial attendance and, more importantly, broadcast rights. Both revenue streams obviously were threatened by the Nationals.

Major League Baseball negotiated with Peter Angelos, owner of the Orioles, and granted him the broadcast rights for the region. Angelos created the Mid Atlantic Sports Network, MASN, to broadcast Orioles’ and Nationals’ games, with the Orioles getting 90% of the revenues. The Nationals get a $20 million licensing fee. Eventually the Nationals are to become a 1/3 owner of MASN.

Comcast, the cable broadcaster, and the Orioles are now in a legal battle as Comcast refuses to air Nationals’ games via the MASN. Comcast is staking out territory as the protector of consumers against the monopoly on rights granted the Orioles by Major League Baseball. Anyone who has ever dealt with Comcast will see the irony in Comcast’s position.

Both sides testified before Congress recently, to the same subcommittee that heard the testimony from players last year on steroid abuse. Both sides agreed to work toward a compromise. Failure to reach an agreement may result in Baltimore area Comcast subscribers not getting Orioles’ games. It may also induce Rep. Tom Davis, the Virginia Republican who called the parties before his subcommittee, to push for legislation that neither Comcast nor Major Leage Baseball would like.

For more on this see Angelos turns up Comcast volume.

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Author: Dennis Coates

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