Mark Lerner

Nationals’ Sales Process Still Not Near Resolution

By Anthony Franco | January 12, 2023 at 9:21pm CDT

The Nationals have been on the market for a good portion of the past year. The Lerner family first announced in April they were looking into sale possibilities for the franchise. Subsequent reports suggested the family was hopeful of completing the process by the early-December Winter Meetings.

That obviously did not happen, and it doesn’t seem a resolution is imminent. The Talk Nats blog reported Tuesday afternoon that negotiations were not close to the finish line. That aligns with their reporting from late November, when Talk Nats wrote the franchise’s uncertain local broadcasting situation related to the ongoing MASN dispute was keeping the Lerners from settling on an agreeable price point with the Ted Leonsis group that had emerged as the frontrunner in discussions.

TV rights remain the biggest issue in the Washington sale. As part of the relocation efforts to move the franchise from Montreal to Washington nearly two decades ago, MLB (which owned the Expos/Nationals at the time) agreed to tie its local broadcasting rights to the Mid-Atlantic Sports Network. MASN is jointly owned by the Nats and Orioles, but the Orioles’ ownership share is roughly 77% while the Nats own around 23%. That agreement, a condition of the franchise’s relocation into the Orioles’ geographic territorial rights, caps the Nationals’ TV revenue by making it impermissible for them to sell broadcasting rights to a regional sports network.

Leonsis owns NBC Sports Washington and would almost certainly prefer to broadcast Nationals games on that network if he took control of the franchise. Doing so would require negotiating a way out of the MASN contract with the Orioles, though, and it’s not clear whether the Baltimore organization has any interest in doing so. MLB has gotten involved in an attempt to broker a settlement between the franchises, but there’s no indication they’ve made progress to this point.

Uncertainty about future local TV revenues is an obvious concern for a possible buyer. Against that backdrop, it’s now a real question whether the Lerner family will sell a majority stake at all. Talk Nats suggested it’s possible the Lerners pivot to selling a minority share of the franchise. Chelsea Janes and Barry Svrluga of the Washington Post echoed that sentiment this evening, writing that the Lerners now seem likelier to take on a minority partner than sell the franchise entirely. Nothing has been formally decided. Both Talk Nats and the Washington Post suggest possibilities range from no change in the ownership structure at all to a deal of a minority share or a sale of the controlling stake coming together.

Janes and Svrluga suggest a middle ground may be to sell a minority share with a path to that buyer taking over majority ownership down the line. The Dolan family took that tack with the Guardians last summer, immediately selling roughly 25-30% of the franchise to David Blitzer in a deal that reportedly gives Blitzer the option to purchase majority control six years thereafter.

It’s an ongoing saga that obviously hasn’t resolved as the Lerner family had envisioned. There are still myriad possibilities that’ll hang over the franchise for as long as this process remains up in the air. The franchise is amidst a full rebuild and ran out the worst team in the majors last season. They’ve made a few short-term free agent investments this winter, bringing in Dominic Smith, Corey Dickerson, Jeimer Candelario and retaining Erasmo Ramírez on one-year contracts worth a combined $10.25MM. Their biggest investment of the offseason was a two-year, $13MM pact for starter Trevor Williams.

Roster Resource projects the franchise’s player payroll around $104MM. That’s $31MM south of last season’s Opening Day figure. It’d be the franchise’s lowest season-opening payroll since 2012, although it’s possible GM Mike Rizzo and his staff have some more spending room to add another veteran target or two to supplement a young roster.

Latest On Nationals’ Sale Negotiations

By Anthony Franco | November 28, 2022 at 10:08pm CDT

Hanging over the past seven months of Nationals business has been the Lerner family’s efforts to find a buyer for the franchise. Ted Leonsis, whose Monumental Sports & Entertainment owns the NBA’s Wizards, NHL’s Capitals and WNBA’s Mystics, had emerged as the favorite in those discussions in recent weeks.

While that might still be the case, the Talk Nats blog reported over the weekend the sides remain divided on a price point. Talk Nats suggests there’s some pessimism about the possibility of Leonsis finalizing a purchase of the franchise imminently, if at all. To be clear, there’s no suggestion the Lerners and Leonsis are on the verge of calling off talks, but it seems there’s still a notable gap to bridge in negotiations.

The primary stumbling block, as has been the case throughout the sale process, seems to be the franchise’s uncertain TV rights outlook. As part of the relocation efforts to move the franchise from Montreal to Washington nearly two decades ago, MLB (which owned the Expos/Nationals at the time) agreed to tie its local broadcasting rights to the Mid-Atlantic Sports Network. MASN is jointly owned by the Nats and Orioles, but the Orioles’ ownership share is roughly 77% while the Nats own around 23%. That agreement, a condition of the franchise’s relocation into the Orioles’ geographic territorial rights, caps the Nationals’ TV revenue by making it impermissible for them to sell broadcasting rights to a regional sports network.

Hanging over the potential negotiations is an acrimonious past between the Orioles and Nats that hasn’t been resolved. Disputes about the Nationals’ share of TV rights led to litigation that has been pending for nearly a decade. In 2019, an arbitrator ruled the network owed the Nationals around $105MM in unpaid rights fees. MASN appealed that decision, and the appeal has still yet to get on the docket for the New York Court of Appeals.

While Leonsis purchasing the franchise still seems well within the range of possibilities, it doesn’t appear a resolution is coming in the near future. The Washington Post wrote in August the organization was hopeful of completing the sales process by November. That certainly isn’t going to happen, and it seems an open question whether a solution will be known by the time the calendar turns to 2023. It’s hardly an ideal situation for general manager Mike Rizzo and his staff to construct their roster this offseason, although the Nats look likely to be relatively quiet regardless after firmly committing to a rebuild with the Juan Soto trade over the summer.

Latest On Nationals’ Sales Process, MASN Deal

By Anthony Franco | November 2, 2022 at 12:04am CDT

As the Lerner family continues to explore a sale of the Nationals, the franchise’s ongoing dispute with the Orioles over television rights fees looms. Major League Baseball has renewed its efforts to try to broker an agreement between the franchises, write Barry Svrluga, Chelsea Janes and Ben Strauss of the Washington Post. The Talk Nats blog first reported last month that MLB was getting involved in trying to bring the sides together.

As both the Washington Post and Talk Nats have covered during the sales process, the TV rights dispute presents a fair bit of uncertainty for prospective Nationals buyers. As part of the relocation efforts to move the franchise from Montreal to Washington nearly two decades ago, the Nationals agreed to tie their local broadcasting rights to the Mid-Atlantic Sports Network. MASN is jointly owned by the Nats and Orioles, but the Orioles’ ownership share is roughly 77% while the Nats own around 23%. That agreement, a condition of the franchise’s relocation into the Orioles’ geographic territorial rights, caps the Nationals’ TV revenue by making it impermissible for them to sell broadcasting rights to a regional sports network.

The Post notes the original agreement expressly stipulates that the Nationals’ obligations under the MASN deal would carry over in the event of a sale of a franchise. Thus, the unfavorable TV situation is a key consideration for those in discussions with the Lerners.

That’s all the more true in light of recent movement on that front. As Talk Nats and the Post have each reported, a group led by Ted Leonsis now appears to be the frontrunner in the sales process. Leonsis’ Monumental Sports & Entertainment also owns the NHL’s Capitals, the NBA’s Wizards and the WNBA’s Mystics, as well as having full control of NBC Sports Washington. Finding a way to broadcast games on NBCS Washington figures to be a key objective for Leonsis if his group eventually purchases the Nats, but they’d need to negotiate a settlement with the Orioles to buy out of their end of the MASN agreement to do so. Whether the Baltimore franchise would have interest in such an arrangement isn’t clear.

Of course, there’s a strong interest on MLB’s part in facilitating some kind of settlement. Both Talk Nats and the Post have suggested the TV rights uncertainty has slowed down the sale process, and it raises some questions about the franchise’s price point. The league would prefer to see the Nationals sold for a high price (and, to a lesser extent, to expedite the process). The Lerner family has reportedly sought around $2.5 billion.

Interestingly, while an eventual sale to Leonsis still appears to be the likeliest outcome, one person familiar with the process tells the Post a number of paths remain possible. That source suggests the Lerners could still retain majority control in the long run, or perhaps bring in a minority owner initially with a longer-term path to majority ownership. (As an example of that sort of arrangement, the Guardians agreed to a sale in June that sees incoming buyer David Blitzer purchase roughly 25-30% of the franchise initially but have the right to purchase majority control six years down the line).

As the parties try to iron through the TV deal and potential sale, the Nationals’ on-field product is coming off an MLB-worst 55-107 season. They’re firmly amidst a rebuild and have cut back payroll dramatically. The franchise has approached $200MM on player payrolls in the past, but Roster Resource calculates their 2023 expenditures (including arbitration estimates) around $98MM. Svrulga, Strauss and Janes write that a few of the team’s baseball operations staffers have expressed some uncertainty about the organization’s spending capacity and overall direction this winter. Both manager Dave Martinez and GM Mike Rizzo will stick around, at least, with the club picking up 2023 options on each this past summer.

Ted Leonsis’ Group Emerging As Front-Runner In Nationals’ Ownership Sale

By Anthony Franco | October 20, 2022 at 5:49pm CDT

Six months ago, the Lerner family announced they were exploring the possibility of a sale of the Nationals. As the offseason nears, some clarity has emerged on that process. David Aldridge, Britt Ghiroli and Ken Rosenthal of the Athletic write that a group led by businessman Ted Leonsis is now the “clear front-runner” to eventually take over the Nationals. The Talk Nats blog first reported in late September the Leonsis group had broken through as the most likely party to buy the Nats.

Leonsis is already a key factor in the D.C. sports scene, as his Monumental Sports & Entertainment owns the NBA’s Wizards, the NHL’s Capitals and the WNBA’s Mystics. (The Lerners are a minority owner in that venture). Landing the Nationals would give Leonsis control over the D.C. franchises in three of the four major men’s sports leagues, The Athletic notes, a distinction currently only held by the Kroenke family that owns the Los Angeles Rams, Colorado Avalanche and Denver Nuggets. Leonsis isn’t mounting a solo ownership bid, however. The Washington Business Journal reported in August that private equity businessman David Rubenstein is also part of the group; it is unclear whether anyone else is involved.

Previous reports have also linked South Korean businessman Michael B. Kim and mortgage mogul Stanley Middleman to the sales process. There were reportedly upwards of five bidders in talks with the Lerner family at one point, but The Athletic reports that Leonsis’ group seized control roughly a month ago.

While it appears that Leonsis and company are now in the driver’s seat to push the deal across the finish line, the closing of the sale isn’t imminent. Aldridge, Ghiroli and Rosenthal hear the sale isn’t likely to be finalized before the December 4-7 Winter Meetings in San Diego. That appears to be the more optimistic end of the timetable, as The Athletic writes it’s possible the sale isn’t finished until after the calendar flips to 2023.

As The Athletic notes, Leonsis also controls his own regional sports network, NBC Sports Washington. Monumental Sports & Entertainment had previously purchased 33% of NBC Sports Washington, and it bought out NBCUniversal’s 67% share this past August. Not coincidentally, NBC Sports Washington holds the local broadcasting rights to Capitals, Wizards and Mystics games.

The Nationals’ local broadcasting contract currently runs through the Mid-Atlantic Sports Network, which it shares with the Orioles. The Orioles own approximately 75% of the network, while the Nationals own the remaining share. The two franchises have been embroiled in rights fees litigation for the better part of a decade. The Washington franchise won a major victory in 2019 when an arbitrator ruled the Orioles owed the Nats $105MM. The Baltimore organization appealed that decision, and the matter has still yet to be decided by the New York State Court of Appeals.

While The Athletic notes it’s unclear how or if the sale of the Nationals would affect the MASN dispute, Talk Nats tweeted in August that Leonsis’ group would be interested in reaching a settlement with the Orioles to buy out of the MASN deal. If that did come to pass, the Nationals would presumably then be broadcast on the NBC Sports Washington platform. That’d obviously be a complicated process that requires negotiations with the Orioles, but it does seem to offer a glimmer of hope for a resolution to the saga.

The Lerner family first bought the Nationals in 2006, paying $450MM. The specific prices under consideration in their sale aren’t clear, but Daniel Kaplan of the Athletic wrote last month they were seeking $2.5 billion.

Nats Owner Lerner: “We Really Can Only Afford To Have One Of” Rendon Or Strasburg

By Mark Polishuk | December 5, 2019 at 6:35pm CDT

Nationals principal owner Mark Lerner expressed doubt about his franchise’s ability to re-sign both Anthony Rendon and Stephen Strasburg this offseason, as Lerner told NBC Sports Washington’s Donald Dell. (Todd Dybas of NBC Sports Washington has early details about the interview, which will take air in full on Dell’s show on December 17.)

“We really can only afford to have one of those two guys,” Lerner said. “They’re huge numbers. We already have a really large payroll to begin with….We’re pursuing them, we’re pursuing other free agents in case they decided to go elsewhere. Again, it’s not up to us. We can give them a great offer — which we’ve done to both of those players. They’re great people. We’d be delighted if they stay. But it’s not up to us, it’s up to them. That’s why they call it free agency.”

MLBTR’s ranking of the winter’s top 50 free agents (which, incidentally, predicted both Rendon and Strasburg would wind up back in D.C.) projected Rendon for a seven-year, $235MM deal and Strasburg for six years and $180MM. That works out to a little more than $63.57MM in average annual value if the Nationals were to land both players at those projected prices, and since Roster Resource’s Jason Martinez estimates the Nats’ current luxury tax number at just under $135.32MM, that would bring the total to roughly $199MM.

This leaves Washington with some wiggle room under the $208MM luxury tax threshold to add more roster upgrades beyond only Rendon and Strasburg, though surpassing the tax threshold seemingly wouldn’t be a problem since the Nats were willing to pay the tax in both 2017 and 2018. By ducking under the threshold last season, the Nationals would again be charged at the “first-timer” rate of a 20 percent tax on the overage of any payroll that falls between $208-$228MM. Since Adam Eaton, Anibal Sanchez, Sean Doolittle, and Kurt Suzuki could all come off the books after the 2020 season, the Nationals could potentially even get back under the 2021 threshold ($210MM) or at worst pay another minimal penalty by staying within the $210-$230MM range.

Of course, the Nats would further shave more money off their payroll with other moves, or Rendon and Strasburg could also end up costing more money than our projected figures. But, strictly speaking, there isn’t any real financial barrier preventing the club from re-signing both players. Lerner’s declaration could be something of a tactic, Dybas writes, since it would be “poor negotiating” to “flatly state the organization is going to find a way to pay both….Being in between serves multiple needs: It keeps the door open on each player; it stirs the market without roiling it; it prepares fans for an outcome they don’t prefer.”

While the Nationals haven’t been afraid to spend big on free agents or player salaries in general, they face a unique situation in having two star players (both represented by the same agent, Scott Boras) hit the open market at the same time. Several teams have already been linked to both players, including some of the game’s wealthiest franchises — the Dodgers have spoken to both, while the Rangers have interest in Rendon, and the Phillies and Yankees are known to be interested in Strasburg. Since the bidding will be high for both players, the Nats could re-direct their resources towards one player in particular if the price tag for the other becomes truly untenable.

Nationals Notes: Rendon, Harper, First Base

By Mark Polishuk | December 10, 2018 at 8:21pm CDT

The Nationals have made multiple extension offers to third baseman Anthony Rendon, GM Mike Rizzo told reporters (including Dan Kolko of MASNsports.com), with Rizzo noting that both sides have interest in a long-term deal. Rendon is entering the final year of his contract, and he put himself in line for a major payday after his strong numbers in 2017-18. Extending Rendon would add yet another big contract on the Nationals’ long-term books, and between locking up Rendon and signing Patrick Corbin to a six-year, $140MM pact, it would seem that Washington could be pricing itself out of Bryce Harper’s market. More on that and other Nats-related topics here…

After Nationals managing principal owner Mark Lerner recently commented that the team’s ten-year, $300MM offer to Harper would be its best and final offer for the star outfielder, Scott Boras (Harper’s agent) was in touch with the team expressing concern about Lerner’s statement, Chelsea Janes of the Washington Post reports. Specifically, Boras had some dismay that Lerner had violated league rules about how teams can publicly discuss contract talks with players, though Boras hadn’t contacted the MLBPA about the situation. Janes outlines how Lerner’s statement didn’t technically breach the rule, though “even those within the Nationals organization were a little surprised to see their new controlling owner speak with such candor.” Regardless of what has or hasn’t been said, however, Boras said on Monday that his negotiations about Harper and the Nats will be with family patriarch Ted Lerner, a relationship that has paved the way for many Boras client to land in Washington over the years.
The Nationals are looking for a first base complement to Ryan Zimmerman that is also capable of playing second base, MASNsports.com’s Mark Zuckerman writes. This player would spell Zimmerman occasionally or take over at first base entirely if Zimmerman was injured, while under normal circumstances playing second base a few times per week (with Howie Kendrick and Wilmer Difo also being in the mix). Zuckerman speculates on a few names that would fit this description, ranging from Marwin Gonzalez to less-pricey options like Daniel Descalso, Neil Walker, Derek Dietrich, or Yangervis Solarte.

Nationals Ownership Transfers Control To Mark Lerner

By Steve Adams | June 14, 2018 at 8:34am CDT

After a dozen years as the front-man in the Nationals’ ownership, Ted Lerner is transferring control of the organization to his son, Mark, reports Barry Svrluga of the Washington Post. The move has already been unanimously approved by the other 29 owners, per the report. Both Ted, 92, and Mark, 64, have issued statements to Svrluga regarding the transfer, and the column is full of quotes from Mark on his new role as well as the organization’s future.

While many ownership changes and transfers are followed by shakeups on the baseball operations side of the equation, that doesn’t sound to be the case in this instance. The younger Lerner notes that most of the team’s larger decisions have been a collaborative family effort. Ted Lerner, his three children (Mark and sisters Marla and Debra), and their spouses have all been weighing in on major ownership-level decisions, even if Ted ultimately had final say. “I don’t think you’ll see much difference in the way Dad and the family running it vs. myself and the family,” said Mark.

Of course, many will wonder exactly what this means for the Nationals’ future with Bryce Harper. The 25-year-old is set to become a free agent following the season, and the rapport between Harper’s agent, Scott Boras, and Ted Lerner has been well-documented. Svrluga notes that Boras negotiated contracts for Max Scherzer, Stephen Strasburg and Jayson Werth (presumably, among others) directly with Ted Lerner. The Nats have no shortage of Boras clients on their roster, with Anthony Rendon, Juan Soto, Matt Wieters, Jeremy Hellickson and Gio Gonzalez all repped by the Boras Corporation (as can be seen in MLBTR’s Agency Database).

Mark calls the relationship between Boras and his father both “interesting” and “successful,” adding that he expects his father to be involved in future negotiations with Boras (i.e. the Harper negotiations) as long as he wants to be. Regarding Harper, specifically, Mark says the outfielder “feels like a member of the family” and speaks optimistically about being able to retain the outfielder on a deal that “makes sense for the long-term vision of the club.”

Nationals ownership already resolved one key issue earlier this season, extending general manager Mike Rizzo through the 2020 season and thus ensuring that he’ll continue to serve as the primary voice overseeing baseball operations, having already done so since 2009. Manager Dave Martinez, meanwhile, is in the first season of a three-year deal that contains a club option for the 2021 season.

The manner in which the Nationals handle the managerial and coaching staff following today’s transfer will be an interesting scenario to follow in the coming years. The organization has become notorious for having short leash on its field staff; Dusty Baker, for instance, was surprisingly cut loose after consecutive NL East titles, and Martinez is somewhat incredibly the seventh manager of the team dating back to 2009. That’s long been attributed to ownership rather than Rizzo, who reportedly fought to keep Baker at the helm before ownership made the call to dismiss him. There’s likely no way to know exactly how (or if) that’ll change in the short-term, with Martinez in his first season as skipper. The 2019 and 2020 seasons figure to be more telling in that regard, though, especially if the Nationals either fail to make the postseason or endure yet another NLDS exit.

Generally speaking, however, it doesn’t sound as if the transfer will bring about radical change in the operation of the club in the near future. Furthermore, it sounds as if the Lerner family plans on retaining control of the organization for years to come. Svrluga notes that a third generation of Lerners is already becoming involved in the business, and Mark Lerner spoke candidly about the fact that he and his siblings have had zero thoughts about selling the team. “We well never sell the Nationals,” said Mark. “…[C]ertainly while I’m alive and my sisters and brothers-in-law are alive — nobody’s going to sell this team.”

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