Cable TV is goosing this market

THE BALTIMORE SUN

PASS THE salt, please. Go ahead and pour. That's where we are, open wounds and all. The New York Mets are back and they're starring in the next exciting episode of:

The Carlos Delgado Soap Opera.

It's just the Orioles' luck that the one big-time player that the New York Yankees don't want this winter is now the subject of intense wooing by the Mets, the other big-market team with a regional cable TV network about to start paying big dividends.

The key to the Yankees' (and the Red Sox's) success is the outlandish revenue stream generated by the YES Network (and NESN). The Yankees depend on cable TV for more than $190 million a year. It's just the kind of dough needed to underwrite a $200 million payroll.

Money can buy you anything, but money can't buy you love - unless you're George Steinbrenner. Or, soon, Fred Wilpon, owner of the cash-happy Mets.

The Mets have splurged this winter, jacking the market into the stratosphere usually reserved for splash-happy owners from Texas. The Mets aren't exactly Tom Hicks, who foolishly doled out $252 million to Alex Rodriguez, then had to trade him to one of the two teams on the planet that could afford him.

However, the actions of the Mets this winter are no less devastating, when the sum of their free-agent deals is examined.

Pitchers Kris Benson and Pedro Martinez were both overpaid. Carlos Beltran, the top player on the market, was given the first $100 million-plus contract since Jason Giambi in 2002. Now the Mets are working on Delgado, whose agent started the offseason saying his goal was to get Delgado five years for $75 million.

Starting in 2006, the Mets will broadcast their games exclusively on a regional cable TV network they will own, along with Time Warner and Comcast. Some estimates have the Mets' cable market generating about three-quarters of what the Yankees net. That means cable income for the Mets could be upwards of $150 million.

Did this new cable TV network and its future revenues allow the Mets to sign Martinez and Beltran for too much money? Or did the new cable network necessitate the Mets signing big-time stars, in order to reel in more paying cable customers and justify increased cable surcharges?

This is the game being played by the big dogs, and the Orioles are falling further behind.

And we all thought it was about hitting for average, or that the biggest issue regarding the wooing of Delgado was which team would let him take the most at-bats as a first baseman.

Cable TV ball is what the Mets, Yankees and Red Sox play so well. Some experts estimate the Yankees network is worth $1.2 billion. That makes it a lot easier for Giambi to be a $120 million bench-warmer. That's also why so few teams have dominated the free-agent market this winter. Everyone else has sat out, including the Orioles.

In Baltimore, this stark reality has translated into outrage and anger - especially at the Orioles owner, who has had his share of missteps in the management of club personnel.

That the Orioles jumped back into the thick of things last winter only whetted the appetite of the locals. It's painful to have had hope, only to see it dashed. Carl Pavano should have taught Orioles fans that lesson earlier this winter. Now there's the sting of losing Delgado to the Mets, which seems likely.

The Orioles are willing to pay for Delgado - but only to a very fixed and finite point: four years, $48 million. The Orioles had this offer on the table when the Mets jumped back into negotiations, even after Delgado's agent allowed the Mets' Sunday deadline to pass.

Four years at $48 million sounds pretty good. It's the same per-year salary that the team paid last year for Miguel Tejada, who plays a critical defensive position and is seen as a franchise player. That helps explain why the terms for Delgado are shorter.

But ultimately, the Orioles' inflexibility on length of contract stems directly from the franchise's unclear future financial status. Owner Peter Angelos has not and will not expose the franchise to long-term contracts, not when the Orioles estimate they will lose between $20 million and $30 million a year with the arrival of the Nationals.

The Orioles are seeking compensation from Major League Baseball for this "intrusion" into "their" market. Guaranteed minimum revenues and franchise price are important, but nothing will determine the Orioles' operating costs more than the parameters of a cable network deal.

This is where the Orioles are at a most serious financial disadvantage. It is here that Angelos and Major League Baseball are locked in the most significant disagreement.

Until the Nationals' television territory is determined - and how far that territory extends into Baltimore's territory - the Orioles won't be able to estimate future revenues.

"If you look at high-revenue teams in baseball, the highest cable operators are the Yankees and Red Sox. The Mets are forming one next year. Cable TV is a significant revenue stream for baseball teams," Orioles president Joe Foss said.

And that's why this winter, when Delgado is seeking five years instead of four, Delgado flies away.

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