Their current deal (part of the package that allowed the Montreal Expos to relocate within the O’s territorial rights) gives the Nationals $29 million per year. However, language in the deal allowed the Nationals to “reset” the fee based on new deals in similar markets.
And in recent years, those deals have been huge. According to Thomas Boswell of the Washington Post, the Nationals now want $110 million. MASN disagrees.
Here’s where the Tampa Bay Rays come in.
The two sides have argued their cases to an MLB committee consisting of representatives from the Pirates, the Mets, and yes, the Rays. And their recommendation will likely determine if the Nationals are making “$60 million or $100 million or likely a number in between,” beginning next season.
What’s the right price? Recent average annual rights fees for regional sports networks have ranged from more than $60 million for the Houston Astros and $75 million for the Texas Rangers — in metro areas usually used as rough comparables to the Washington area — to $150 million for the Angels. The Astros and Rangers fees skew high because they are based on multi-decade deals that grow over time — an argument that favors MASN. Conversely, every new RSN deal blows away the previous one. The Astros and Rangers comparables are already, to a degree, obsolete.
The Rays current deal pays them approximately $20 million per season and is set to expire in 2016. And whatever the Nationals make in 2013 for their television rights will likely impact what the Rays make when their current deal expires or is renegotiated.
And while the Tampa-St. Pete market is about 20% smaller than Washington D.C., the Rays do very well in terms of percentage of households watching the games.
Let’s speculate and say the committee takes the middle road, giving the Nationals $80 million per season. It would not be hard to imagine that the Rays’ TV rights would be worth $70 million per year.
That would be an additional $50 million in revenue for the Rays each year without having to sell one additional ticket. And that number could go even higher if the Nationals get what they are asking for.
The Rays will never have a payroll on the level of the Yankees or Red Sox. But a new TV deal will go a long ways to keeping this team contenders well into the next decade.