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Published: May 14, 2008 12:30 AM
Modified: May 14, 2008 05:41 AM

MASN dispute drags on

MLB concerned about situation

To Triangle fans who crave more baseball on TV, Time Warner Cable and MASN seem to be moving toward a resolution of their dispute about as briskly as a 23-inning game with five rain delays and 12 pitching changes.

Major League Baseball feels the fans' pain and may even be prepared to discuss doing something about it when the owners meet today and Thursday in Milwaukee.

"There's a fundamental issue when people want to watch your product and aren't able to get it," said Pat Courtney, a spokesman for Major League Baseball. "We're aware of it, and we realize that."

The owners might consider a limit on how long teams would be given to negotiate television deals in so-called outlying areas before losing the exclusive TV rights to those territories, Courtney said.

Under the territorial system, the TV rights for certain areas of the country belong to certain major-league teams. It is so complicated that even MLB officials have difficulty explaining it. Suffice to say, North Carolina is shared by four teams -- the Atlanta Braves, Baltimore Orioles, Washington Nationals and Cincinnati Reds. In this region, fans are supposed to be able to watch the Orioles and Nationals.

They can if they subscribe to either of the major satellite providers, DirecTV or Dish Network, which carry the Mid-Atlantic Sports Network, or MASN. Co-owned by the O's and the Nationals, MASN has the rights to their games but has been unable to cut a deal with Time Warner Cable that would put MASN on basic cable. Time Warner has offered to put the network on a digital sports tier, which costs subscribers an extra $3.50 a month.

What infuriates cable customers like Bill Burton of Durham is that the Orioles and Nationals are blacked out even for him and others who paid Time Warner almost $200 this season for the Extra Innings package, which shows all the games that aren't on Fox or ESPN or are blacked out because they should be shown locally.

"I consider this a breach of my contract with Time Warner," Burton said.

Extra Innings can't show the Orioles and Nationals here because they are considered the local teams. But Time Warner doesn't offer the Orioles and Nationals on another channel because it can't reach an agreement with MASN. It's enough to make your head explode.

"The outlying areas have always been the most difficult. Unfortunately, you're in one of them," said MLB's Courtney.

This is where major league owners could come to the rescue, right? Don't get your hopes up.

"Baseball has to be careful trying to dictate too many free-market things ... one reason it's been able to keep an antitrust exemption is that it doesn't try to force its will on every free-market situation," said Steve Bryant, owner of the minor league Carolina Mudcats.

Todd Webster, a spokesman for MASN, insisted that any agreement by the major league owners wouldn't apply to the regional network anyway, because of the settlement that allowed the Expos to move from Montreal to Washington three years ago. They became the Nationals.

In exchange for letting another team move into his backyard, Orioles owner Peter Angelos got a sweet deal -- about 90 percent ownership of the new regional sports network and the TV rights to the Nationals. MASN is paying the Nationals about $28 million this year for those rights.

At the time of the deal, Major League Baseball even tossed in $75 million to buy a 10 percent stake in MASN for the Nationals. (MLB, which once owned the Expos/Nationals, says it no longer has any stake in the network.)

The Nationals' 10 percent stake in MASN will eventually grow to 33 percent. For the time being, as one blogger put it, MASN stands for "Mr. Angelos' Sports Network."

Whatever it's called, the network believes it's "on the side of the angels" in its dispute with Time Warner, said Webster, who continues to point to an arbitrator's January ruling that Time Warner had discriminated against MASN by not offering to put it on basic cable. Arbitrator Jerome Sussman noted that Time Warner's own News 14 Carolina was available on a basic tier. Sussman saw News 14 as a regional sports network because it carried Charlotte Bobcats basketball games.

But Sussman was removed as the arbitrator after speaking publicly about the case, and Time Warner has since closed a deal that will move Bobcats telecasts to Fox Sports Net South. In other words, the reason that News 14 could be called a regional sports network has been conveniently removed.

In a letter announcing Sussman's removal, Christopher Cole of the American Arbitration Association asked attorneys on both sides to agree on a replacement by Feb. 28. The Arbitration Association won't say whether another arbitrator has been chosen. Neither MASN nor Time Warner is saying whether any progress has been made, or how much either company stands to lose financially if it accepts the other side's offer.

A digital sports tier would give MASN about half of Time Warner's basic cable audience. Even though cable companies are typically willing to pay more per subscriber to a network on a digital tier, MASN has a strong financial incentive to reach a broader audience. More eyeballs also would mean more advertising revenue for MASN.

Time Warner doesn't want to eat the cost of simply adding MASN to basic cable, so it has argued that some of that cost would have to be passed on to customers, many of whom don't care much about a network featuring two baseball teams so far away. (MASN counters that more than 20,000 people have "signed" an online petition calling for Time Warner to add the network.)

John Mansell, a media analyst based in Great Falls, Va., said the distances to Baltimore and Washington, as well as each team's losing ways in recent years, put less pressure on Time Warner to make a deal.

"I mean, if these were really hot teams and the Time Warner systems were really close to D.C. or Baltimore, then it's conceivable they might be losing subscribers to DirecTV or Dish Network ... and that would put some pressure on [Time Warner]," Mansell said.

Actually, they are losing some, according to DirecTV. The satellite provider, which has trumpeted MASN in a three-month ad campaign aimed at Time Warner customers, credits the campaign for an increase in sales ranging from more than 3 percent to 14 percent in the Charlotte, Greensboro, Greenville, Raleigh and Wilmington markets.

Despite their differences, Mansell expects Time Warner and MASN to settle eventually, with or without Major League Baseball's help.

"Almost all of these disputes end up being resolved within a couple years," he said.

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