When a group led by David Rubenstein reached a deal to purchase a controlling stake in the Orioles last month, it also acquired the Mid-Atlantic Sports Network, which broadcasts both Orioles and Nationals games.

The $1.725 billion valuation of the team reportedly stunned some owners around the league, many believing, due to the on-field potential of the team, that it could have been priced higher. The Orioles won 101 games last year and, with a strong young core, are expected to be at the top of the standings for years to come.

But MASN could have been a factor in driving the price down.

“Was it profitable at all? Maybe not anymore,” said Martin Conway, a former adviser for the Orioles and current adjunct lecturer on sports management at Georgetown University. “The entity is close to 30 years old. In the last 10 years, cable subscriptions have fallen off dramatically. So, it’s possible that if it was part of the deal, that there was little to no value, cash flow if you will, from MASN.”

Rubenstein, a Baltimore-born billionaire, is acquiring a network with rising ratings — up to 4.23 (a unit used to monitor viewership that represents the percentage of a base population watching a specific program) in the Baltimore-area market, a 65.2% increase from 2022, according to Forbes. But that comes as the cord-cutting epidemic is leading to a decline in revenue for regional sports networks across the country.

The arrangement with the Nationals is complicated — and extends in perpetuity. For years the two teams endured a long legal battle over the fair market value of the TV rights each team would be paid. And, by design, the way the network’s profits are divided after those fees and other expenses are paid heavily favors the Orioles.

It is not yet clear what will happen with MASN when the sale is finalized. A source told The Baltimore Banner that a review of the deal by MLB is moving rapidly, although a date for an owner vote — the last step before it is done — has not been scheduled.

A representative for Rubenstein declined to comment on the future of the network, as the sale of the team is not finalized. MASN and the Orioles also declined to comment.

Rubenstein could opt to keep the network as is. Selling the Nationals’ broadcast rights is also a possibility, as is outsourcing production or even selling the network.

Whatever the outcome, it will arrive during a tumultuous time for the industry.

“There’s just so much uncertainty in the RSN [regional sports network] world,” said Ed Desser, president of Desser Media, which specializes in conducting regional, national and international media rights negotiations. “At one time, that ownership stake in MASN was far more significant to the overall picture. Nowadays, it’s not a license to print money anymore.”

MASN was already cutting back

Before agreeing to sell a majority stake in the team to Rubenstein, Orioles CEO and chairman John Angelos had two matters to deal with: a lease extension at Camden Yards and wrapping up a decade plus of acrimonious court battles over how much MASN owes the Nationals (and Orioles) each year for broadcast rights.

He ultimately agreed to a lease in December that did not deliver him the development rights for state-owned land that he sought, which he was hoping would provide him additional income.

Around the same time, his lawyers agreed to accept a decision from MLB that MASN owed each team about $60 million per season covering the years of 2017-2021. That’s roughly the same amount each team got in the preceding five years, too (the Orioles had argued that they should pay each team $40 million; a lawyer for the team said paying $120 million total would erase “virtually all” of MASN’s profits.)

It is not known what MASN pays the teams now. The number of subscribers has dropped from 5.6 million in 2018 to 3.3 million in 2023, according to figures from S&P Global Market Intelligence — and MASN has made several corresponding cost-cutting moves.

In 2021, MASN’s production studio, including the sets for pre- and post-game shows, was moved from Sinclair studios into the B&O Warehouse at Camden Yards, where the Orioles already pay rent. Officials bragged about the move, multiple sources said, due to how much money it saved. However, it created technical problems such as audio echoes on broadcasts, according to the sources.

The MASN app, which provides cable subscribers another way to watch games, also frequently crashes. It has a measly 1.4 star ranking in the Apple App Store.

The staff has also been reduced. MASN let go of fan favorites such as Jim Hunter, Mike Bordick, Dave Johnson, Tom Davis, Rick Dempsey and Gary Thorne in 2021, along with executive producer Chris Glass. Between 2020 and 2023, the number of on-air broadcasters dropped from 19 to nine, though three others joined midway through the 2023 season in limited roles.

For most games, there is no sideline reporter or analyst on the pre- or post-game show. The production crew is thin — just one stage manager responsible for putting together the entire game plus the pre- and post-game shows, the sources said.

When there are holes to fill on the crews, other MASN employees are told to fill in with no extra pay, sources said.

This year the Orioles will broadcast only seven spring training games — all with a remote crew — as another way to cut costs.

A troubled model

While some of MASN’s problems are self-inflicted, regional sports networks no longer guarantee the lucrative supplement for traditional revenue streams like tickets, concessions, sponsorships and advertising.

According to the market research firm Insider Intelligence, less than 50% of U.S. households pay for cable — with that number predicted to drop to 34.9% by 2027 — decreasing the amount of money regional sports networks bring in. Teams that rely on revenue from broadcast rights, can’t do that if the networks aren’t turning a profit.

“Producing games, paying rights fees, operating the business, all of those are fixed costs,” Desser said. “When you have revenues decline, that squeezes margins.”

In the last year, the broadcasts for over half of MLB teams have been in flux.

Diamond Sports Group, a subsidiary of Hunt Valley-based Sinclair Broadcast Group, operates regional sports networks under the umbrella of Bally Sports, holding the rights for 14 MLB teams. A few years after Sinclair acquired 21 regional sports networks and Fox College Sports from the Walt Disney Company in 2019 for $9.6 billion and created Diamond, the company declared bankruptcy with $8 billion in debt.

MLB took over the rights for the Padres and Diamondbacks, two former Bally Sports entities, last season. The rest should remain under Diamond Sports for 2024. Diamond also recently announced a restructuring agreement with Amazon as a partner to stream five teams — the Tigers, Royals, Marlins, Brewers and Rays —but it’s unclear if the other seven will also be included.

Another media giant, Warner Bros. Discovery, exited the business last year. Three of the teams they operated — the Astros, Pirates and Mariners — opted to increase ownership to keep games on their networks, while the Rockies, the fourth, will have their games broadcasted by MLB.

What’s next?

MLB commissioner Rob Manfred said last week that he is hoping to introduce a direct-to-consumer streaming service for at least half of MLB teams by 2025. Experts agree that this is the way forward.

“We’re accustomed to there being one feed — and kind of a vanilla feed — for all consumers,” Desser said. “I think it’s likely that we will see different forms of feeds and different kinds of packaging for different kinds of fans. Maybe it’s the last half hour of a game, maybe it’s condensed games, maybe it’s highlights.”

Some, like New England Sports Network, run by the group that owns the Boston Red Sox, have been doing this since 2022. Marquee Sports Network — a network the Chicago Cubs run in affiliation with Sinclair — also has an option to stream games for $19.99 a month. A MASN source declined to say whether the network would consider adding a direct-to-consumer option and said all major decisions are on hold until the sale is finalized.

But for MASN, there could be more drastic measures beyond introducing a streaming platform. The Nationals have been exploring a sale, and some believe that the MASN arrangement have held it up. It is possible a new Nationals owner may want to buy-out the existing agreement.

“In order to sell the team, I think a new owner is going to want a partitioning of the rights fees. I just don’t think that somebody is going to come in and make a quality offer on the Nationals without it,” Conway said.

If this happens, Monumental Sports, controlled by Wizards, Capitals and Mystics owner Ted Leonsis, could come into play. Leonsis and Rubenstein considered a bid to buy the Nationals together in 2022, according to Bloomberg, and Leonsis already has the infrastructure to broadcast games.

“Opportunity now exists to do that,” Conway said. “I think there are a couple of possibilities out there, but now you are unencumbered from doing those kinds of things.”