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OUT AT HOME: WHY MOST NATS FANS CAN’T SEE

THEIR TEAM ON TV

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

APRIL 7, 2006

Serial No. 109–152

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

LAWRENCE HALLORAN, Deputy Staff Director

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

(III)

C O N T E N T S

Page

Hearing held on April 7, 2006 ................................................................................ 1

Statement of:

Dupuy, Robert A., president and chief operating officer, Major League

Baseball; Peter G. Angelos, chairman and chief executive officer, Baltimore Orioles; David L. Cohen, executive vice president, Comcast Corp.;

and Gary McCollum, vice president and regional manager, Cox Northern Virginia ................................................................................................... 18

Angelos, Peter G. ....................................................................................... 42

Cohen, David L. ......................................................................................... 54

Dupuy, Robert A. ....................................................................................... 18

McCollum, Gary ......................................................................................... 176

Franchot, Peter V.R., Delegate, Maryland House of Delegates; Anthony

Williams, Mayor, District of Columbia; Sean T. Connaughton, chairman, Prince William County Board of Supervisors; Doug Duncan,

Montgomery County executive; and Ian Koski, editor,

Nationalspride.com ....................................................................................... 209

Connaughton, Sean T. ............................................................................... 216

Duncan, Doug ............................................................................................ 220

Franchot, Peter V.R. ................................................................................. 209

Koski, Ian ................................................................................................... 225

Williams, Anthony ..................................................................................... 214

Letters, statements, etc., submitted for the record by:

Angelos, Peter G., chairman and chief executive officer, Baltimore Orioles, prepared statement of .......................................................................... 44

Burton, Hon. Dan, a Representative in Congress from the State of Indiana, prepared statement of .......................................................................... 10

Cohen, David L., executive vice president, Comcast Corp., prepared statement of ........................................................................................................... 57

Connaughton, Sean T., chairman, Prince William County Board of Supervisors, prepared statement of ....................................................................... 218

Davis, Chairman Tom, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 4

Duncan, Doug, Montgomery County executive, prepared statement of ....... 222

Dupuy, Robert A., president and chief operating officer, Major League

Baseball:

Washington Post article ............................................................................ 20

Prepared statement of ............................................................................... 23

Franchot, Peter V.R., Delegate, Maryland House of Delegates, prepared

statement of ................................................................................................... 211

Issa, Hon. Darrell E., a Representative in Congress from the State of

California, prepared statement of ................................................................ 17

Koski, Ian, editor, Nationalspride.com, prepared statement of .................... 228

McCollum, Gary, vice president and regional manager, Cox Northern

Virginia, prepared statement of ................................................................... 178

(1)

OUT AT HOME: WHY MOST NATS FANS CAN’T

SEE THEIR TEAM ON TV

FRIDAY, APRIL 7, 2006

HOUSE OF REPRESENTATIVES, COMMITTEE ON GOVERNMENT REFORM, Washington, DC.

The committee met, pursuant to notice, in room 2154, Rayburn

House Office Building, Hon. Tom Davis (chairman of the committee) presiding.

Present: Representatives Tom Davis, Burton, Issa, Cummings,

Van Hollen, Ruppersberger, and Norton.

Also present: Representative Moran.

Staff present: David Marin, staff director; Keith Ausbrook, chief

counsel; Jennifer Safavian, chief counsel for oversight and investigations; Howie Denis, John Hunter, and Steve Castor, counsels;

Rob White, communications director; Andrea LeBlanc, deputy director of communications; Teresa Austin, chief clerk; Sarah

D’Orsie, deputy clerk; Leneal Scott, computer systems manager;

Brian Cohen, minority senior investigator and policy advisor; Kim

Trinca, minority counsel; Earley Green, minority chief clerk; and

Jean Gosa, minority assistant clerk.

Chairman TOM DAVIS. Good afternoon. Welcome, and a quorum

being present, the Committee on Government Reform will come to

order. I want to welcome everybody to today’s hearing. Today, the

committee will examine the dispute that is preventing the Washington Nationals games from being widely available on cable television. Nationals fans deserve to understand why they can’t watch

75 percent of their team’s games on the region’s dominant cable

provider—Comcast, with its 1.3 million subscribers.

Being able to watch the Nats on TV has been a problem ever

since the team came to Washington. Last season, before an agreement was reached with DirecTV, the lack of access to Nationals

games was so bad that play-by-play man Mel Proctor actually gave

out his cell phone number and asked anyone watching the game to

call him. He got one call—from a technician in the production truck

outside.

As any fan knows, part of following your home team is watching

the games on TV. For some, this means trying to watch every

game. For others, it means flipping the ball game on at night to

check the score. This past Wednesday night, if you flipped the

game on in the ninth, you would have found the Nats down by one.

Next thing you know, Ryan Zimmerman homers off Bill Wagner to

tie the score, and then they go on to win the game in extra innings.

Having all the games on TV means you can tune in when the Nats

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are in the midst of a winning streak, when a superstar opponent

is in town, or when you find out that a no-hitter is in progress. I

can’t imagine how frustrated I would be if I found out Livan Hernandez had a no-hitter going in the seventh and I couldn’t flip on

the TV set to see it. Having all the games on TV allows folks to

jump on the Nationals bandwagon, to have those water cooler conversations, and to make the Nationals part of the fabric of the community. If you air it, they will come.

I am disappointed that the sophisticated businessmen involved in

this dispute have failed to strike a deal. There should be enough

money and good sense to make a deal work for everyone. The only

people hurt by this dispute are the fans.

I should also note at the outset that I’m not personally affected

by this. As a Cox customer, my house will be receiving just about

all the Nationals games, and, Gary McCollum, thank you very

much. I intend to watch as many as I can, that is, when I can’t

be at RFK myself. Nothing against sports bars, but I prefer my

own sofa.

For more than 30 years, area fans waited for the national pastime to return to the Nation’s Capital. Despite the favorable demographics of the Washington, DC, market, baseball was reluctant to

move a team to Washington because of the close proximity of the

Baltimore Orioles.

As part of the deal to bring baseball back to the district, MLB—

Major League Baseball—made a series of valuable concessions to

the Orioles ball club; one granted the Orioles television rights to

the Washington team. Armed with the TV rights to the Nationals,

the Orioles formed a regional sports network called Mid-Atlantic

Sports Network [MASN]. If viable, MASN will compete directly

with Comcast SportsNet for the right to carry the Wizards, capitals, and other live sports events.

By any measure, baseball’s return to Washington last season was

a huge success. Besting 19 other teams, the Nationals had the 11th

highest attendance in baseball, averaging almost 34,000 a game. In

all, 2.7 million people went to Nationals home last year. RFK was

rocking once again.

Part of the Nationals’ success has to do with the serious effort

made by the Government of the District of Columbia and Mayor

Anthony Williams. The District of Columbia has made a substantial financial commitment to the Nationals. A $600 million publicly

financed stadium is set to break ground. Expected to open for the

2008 season, it will be the keystone of the economic redevelopment

of the Anacostia Waterfront section of the District. The presence of

the stadium along with residential, office, and retail space in the

surrounding area is projected to create a cumulative 30-year tax

benefit of $2.5 billion.

This committee, with its oversight responsibility of the District,

believes that the Nationals and the District need and deserve every

chance to succeed. Ensuring that the games are widely available on

television is an important component of that.

With its 1.3 million subscribers, Comcast dominates the cable

market in Washington. Other video programming suppliers in the

area include Cox, RCN Cable, DirecTV, Dish Network, Charter

Cable, Verizon, and Adelphia.

3

MASN has reached an agreement to have their network and the

Nationals games carried with five of those suppliers. MASN has

demonstrated an ability to make a deal happen. Not so, however,

when it comes to a deal with Comcast. This committee—and Nationals fans across the region—want to understand why. Is MASN

asking for too much money or imposing unreasonable conditions?

Is Comcast trying to prevent a competitor from getting its legs? Or

is it some combination of factors?

Today, the committee will try to get some answers. We look forward to hearing from officials of Comcast, Cox, Major League Baseball, the Orioles, and MASN. In addition, we will hear from local

officials in the Washington area, whose constituents are adversely

affected by the standoff between Comcast and MASN.

[The prepared statement of Chairman Tom Davis follows:]

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Chairman TOM DAVIS. I would now recognize Mr. Cummings

from Baltimore for his opening statement, and I would ask unanimous consent that my colleague from Virginia, Mr. Moran, and the

gentleman from Maryland, Mr. Wynn, be able to participate in the

hearing today. Without objection, so ordered.

Mr. CUMMINGS. Mr. Chairman, thank you for calling this very

important hearing to examine why 75 percent of the Washington

Nationals games this season will be unavailable for viewing to over

1 million households who reside in the Washington area.

After a three-decade-long absence, Major League Baseball returned to the Nation’s Capital in 2005 with the Montreal Expos becoming the Washington Nationals. Despite the success of the Nationals’ debut 2005 season in which they attracted 2.7 million people to their home stadium, secured over half a billion dollars in

funding for a new stadium, and made a competitive playoff bid,

Nats fans continue to endure limited television access to a considerable portion of their games.

During the 2005 season, free over-the-air television broadcast 80

of the Nationals’ games. The Mid-Atlantic Sports Network, which

is owned by the Baltimore Orioles owner, Peter Angelos, televised

the outstanding 120 games on cable. Unfortunately for the Nat

fans, only a handful of cable providers carried the Mid-Atlantic

Sports Network at the time. This in turn left many in the region

unable to watch on television a majority of the Nats’ 2005 season.

Last Monday marked the beginning of the Nationals’ second season. While the number of games scheduled to be broadcast on overthe-air television dropped from 80 to 40 games, cable providers representing 60 percent of Washington households have agreed to

carry MASN. Specifically, the Mid-Atlantic Sports Network is now

under contract with Cox Cable, Charter Cable, DirecTV, RCN

Cable, and VerizonFIOS. Fortunately, these contractual obligations

between MASN and cable providers will permit the 120 remaining

games that are not available on free television to be aired on cable.

Comcast, however, the cable operator representing the remaining

40 percent of the region’s households, has refused to carry the MidAtlantic Sports Network. Consequently, the 1.3 million Comcast

subscribers in the region are due once again to not have the option

of viewing 120 games slated for cable.

An enduring dispute between the Mid-Atlantic Sports Network

and Comcast continues to deny over a million Comcast cable subscribers the ability to watch a majority of the Nationals season. Mr.

Chairman, regardless of who is at fault for this impasse, we would

do well by the fans of the Washington region if we recognized that

no one wins if this needless situation continues. Fans in my district

from Howard County to Baltimore City continue to contact me, interested not in assigning fault but achieving a reasonable resolution that ensures a majority of the season’s games are available for

Comcast subscribers.

We should ask why five out of six cable providers in the Washington region have been able to reach a contractual agreement with

the Mid-Atlantic Sports Network but Comcast has refused. What

impact has Major League Baseball’s antitrust exemption had in

creating this situation? Finally, as a baseball fan all my life, no fan

of a team, be it my beloved Orioles or the Washington Nationals,

8

should be denied the opportunity to watch the game they love, our

national pastime.

And with that, Mr. Chairman, I yield back.

Chairman TOM DAVIS. The gentleman from Indiana, Mr. Burton.

Mr. BURTON. You will have to forgive me, Mr. Chairman. I

thought we were here to talk about the Indianapolis Indians being

on.

Chairman TOM DAVIS. We can throw that in at the next hearing.

Mr. BURTON. The Indianapolis Indians is a minor league team

from my city of Indianapolis, so I apologize for the misinformation.

That is supposed to be joke, folks. I thought it would lighten the

thing up a little bit. [Laughter.]

I am here not as an advocate on either side, but what I wanted

to do is I wanted to make sure that the facts, as both sides see

them, are well represented. I know there is a gentleman here from

Comcast, and I have been given some information from Comcast

that I think needs to be read into the record, so I am going to do

that. This situation is currently under litigation. It has gone from

the primary court—it is under appeal right now, which I understand is going to be heard sometime in June, and hopefully this

thing will be resolved. I understand also that Comcast has put an

offer on the table as a compromise, and maybe this hearing can

serve as a catalyst to get everybody together to try to work out

their differences so that the court doesn’t have to pursue this

through the appellate process and maybe even beyond.

Let me read to you the facts as I have received them from

Comcast and at least the record will reflect that. And once again,

I would like to say I hope this thing can be worked out before it

goes further in the courts.

Peter Angelos opposed the return of baseball to the Washington

area because he feared that a Washington team would divert his

fan base and deprive him of revenue. When Major League Baseball

relocated the Montreal Expos to Washington, DC, Angelos was the

only owner to oppose that move.

To appease Angelos, Major League Baseball gave him a sweetheart deal, according to my sources. It sold the Nationals television

rights to Angelos for $21 million, which is a bargain basement

price given that television revenue of baseball teams in smaller

markets is $30 million or more. Published reports have valued the

Nats TV rights at an estimated $750 million, and if that is true,

getting $750 million for $21 is a pretty good deal.

Angelos intends to use the Nationals television rights to create

a second regional sports network, the Mid-Atlantic Sports Network,

which a majority of is owned by Angelos, and Major League Baseball owns one-third of Mid-Atlantic Sports Network, which is likely

to be conferred to the new owners of the Nationals when the team

is sold. But because such regional sports networks are typically unlikely to survive with the television rights to only one major league

team, Mr. Angelos intends to package these Nationals rights with

the Orioles television rights. The only problem is that the Orioles

television rights have been contracted to Comcast Sports Network

through the 2006 season. Comcast Sports Network also has the

rights of first refusal thereafter, the rights to match any offer after

the 2006 from a third party.

9

The suit centers on the definition of a third party. Comcast

SportsNet sued the Baltimore Orioles for breaching the contract

with respect to the third-party match provision. Because Mid-Atlantic Sports Network is jointly owned by both the Orioles and

Major League Baseball, Mid-Atlantic Sports Network is clearly a

third party subject to the third-party match provisions of the contract.

In 1996, Comcast Sports Network, then Home Team Sports, paid

a premium in increased license fees for this provision in the contract. Comcast believes that Mr. Angelos triggered the third-party

provision in partnering with Major League Baseball to form MidAtlantic Sports Network.

In late 2005, a Maryland trial court granted the defendant’s motions to dismiss the case. Comcast, as I said earlier, has appealed

this decision, and that appeal is now pending in the Maryland intermediate appellate court. The Orioles have moved to bypass the

intermediate appeal, petitioning the Maryland Supreme Court to

accept the case directly to expedite its resolution. That petition is

also pending. The schedule in the Maryland intermediate appellate

court provides for a hearing on Comcast’s appeal in June 2006.

The Orioles have, among other things, complained to the Federal

Communications Commission that Comcast’s refusal to carry MidAtlantic Sports Network is a violation of program carriage rules.

While program carriage rules forbid discrimination based on the

fact that the programmer is unaffiliated, Comcast has refused to

carry Mid-Atlantic Sports Network because it is utilizing what

Comcast regards as illegal content.

Comcast has made it clear that it will not air Mid-Atlantic Sports

Network because the network was created through a breach of contract, in their opinion, with Comcast. No cable carrier has ever

been asked to reward a party that breaches a contract with it by

carrying its content. And so I would just like to say I hope this

thing is resolved very clearly, very quickly, and it appears to me

that all parties would be best served if they could sit down at a

negotiating table and work this thing out without it going further

in the courts.

Nevertheless, I was asked to read this into the record, Mr. Chairman, and I have done so, and I wish you well with the rest of the

hearing.

[The prepared statement of Hon. Dan Burton follows:]

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Chairman TOM DAVIS. Thank you very much, Mr. Burton.

Mr. Van Hollen.

Mr. VAN HOLLEN. Well, thank you, Mr. Chairman. Thank you for

holding this hearing, and welcome to all the witnesses here today.

And as you said, Mr. Chairman, at the outset, the purpose of this

hearing is to try and make sure that the fans are not the losers

in this upcoming season or seasons beyond. And we thought it important to get the major players together to ask and shine the light

on the facts in the open in the hopes that would help bring a reconciliation to this issue. And I am pleased that we have representatives from all the major parties involved in this, and I am sure you

will be able to very ably speak for yourselves in this hearing, and

we welcome all of you to do that.

Let me just say that, as Mr. Davis has said, we are very excited

in the Washington region to have the Nationals back, and this is

a region that can accommodate two teams, obviously. We had a lot

of Oriole fans before and continue to have Oriole fans. Our family

continues to enjoy going to Orioles games. We have now a National

League team and an American League team in the same region,

and I think there is definitely room for both, and I believe everybody here testifying today believes that there is room for both.

But as we have heard, while tonight we are going to be able to

watch the Orioles game on Sports Net, we are going to only be able

to see the Nationals game viewing over the air on UPN 20. But for

the rest of the season, we are not going to have the opportunity to

watch many Nationals games in this region. And the fans are the

big losers.

I have three children, all baseball fans. My boys asked me just

yesterday, as we talked about this hearing, they want to know

about how Alfonzo Soriano is going to perform this year. They want

to see how the starter John Patterson and the great closer Chad

Cordero are going to do, rookie Ryan Zimmerman—the whole team.

I mean, they are excited about how the whole team is going to perform under the legendary manager Frank Robinson. And they want

to be able to both go to the ball park but also watch it on television.

And so the purpose of today’s hearing is pretty simple. We would

like to see as expeditious a resolution of this issue as possible so

the fans can watch their team and continue to enjoy the Orioles at

the same time they enjoy the new team here in Washington, the

Nationals. And I hope that out of today’s hearing will come some

progress in that effort.

Thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

Mr. Ruppersberger.

Mr. RUPPERSBERGER. Thank you, Mr. Chairman.

There is no question we have a problem. Many people here in

Maryland, Virginia, and the District of Columbia cannot see the

Nationals, their hometown team, on TV. I have been a Baltimore

Orioles fan all my life. I love going to Camden Yards to watch the

games, and when I cannot see them, I enjoy watching them on TV.

As we know now, many Nat fans cannot do that right now. And

if you are a baseball fan, that is just not right.

I am not sure what Congress can do about this problem, but I

applaud Chairman Davis for having this hearing. Now, you have

13

to understand this. Chairman Davis is an avid baseball fan. He

used to be a Baltimore Oriole fan, and now he is a big-time Nationals fan.

Chairman TOM DAVIS. I still like the Orioles.

Mr. RUPPERSBERGER. Well, that is good to know. But let me say

this, and I am going to stop for a second. I have three Nationals

hats up here. Mr. Angelos, do you have a Baltimore Orioles hat

that I can use?

Mr. ANGELOS. It is close.

Mr. RUPPERSBERGER. OK. Now, I now have both sides involved

in this dispute. As a former Baltimore County executive, I work

closely with Comcast, and probably Comcast more than any other

company that I know has done more to put in Baltimore County

when I was executive. They wired all of our schools for Internet.

Their employees volunteer hours of time in community service. And

Comcast sponsors all sorts of community projects. And when you

call on Comcast to sponsor a community event, they never said no.

They were always there for you, for their community.

I have also known Peter Angelos ever since I was a prosecutor

before I got into public office. That was about 30 years ago. We

have aged a little bit, Peter.

Peter Angelos is all about Baltimore. He grew up in Baltimore.

He went to school in Baltimore. He loves Baltimore. He is a very

successful, self-made attorney and businessman. He bought the

Orioles because he wanted the team to be owned locally. And he

is a good friend, a good lawyer, and one of the toughest negotiators

that you will ever face. But deep, deep down, he does have a really

good heart. And like Comcast, he and the Baltimore Orioles give

back to the community.

Now, with all this being said, Nats fans don’t care who is right,

who is wrong, and who has paid for what. They want to see their

team on TV. And I hope we can find out in this hearing some

issues, for instance, if the fee that Mid-Atlantic Sports Network is

charging is reasonable in the region and on a national basis. Almost everything comes down to money, and that is what this is all

about. But this issue must be resolved. The two sides must come

together to work it out.

Now, the Baltimore Orioles, of which I am an Oriole fan, the contract with Comcast is up in 2007. And I don’t want the same thing

to happen to the Baltimore Oriole fans that has happened to the

Nationals fans right now. As an avid Orioles fan, believe me, I always want to see my team on TV. And I would hate a year from

now to have another hearing about the Orioles not being on TV in

Baltimore.

Now, hopefully this hearing will bring the two sides together so

we can get this worked out. We want the Nats fans to be able to

see their team on TV this season, and we do not want to have the

same problem with the Baltimore Orioles a year from now.

Now let the games begin.

Chairman TOM DAVIS. Thank you very much.

Mr. Moran.

Mr. MORAN. Thank you very much, Mr. Chairman. If Ms. Norton

would like to speak first—I do have an opening statement, but if

you want to go first, Eleanor, it is fine.

14

[No response.]

Mr. MORAN. The public may ask, What business is it of the Congress’ to get involved in this? But last night, ESPN announced that

it was going to show the Nationals game, beginning of the season,

a whole lot of fans wanted to tune in, turn on, and the game comes

on, it is blacked out for the vast majority of television sets in my

district. Tom’s district is a little more fortunate. They have Cox,

and Cox has decided to show them.

The cable providers have a symbiotic relationship, if you will,

with the local community. The local community has a certain

amount of leverage, as does the cable provider have a lot of influence upon the ability of households to enjoy themselves and to take

advantage of technology. So we have a disconnect.

And there is something unique about sports. It is a unifying element that is, in fact, important to our community. Tom and I were

just in a parade out in Fairfax City. I cannot believe we made it

back in time, but, of course, Tom had arranged for one of Fairfax

City’s finest to drive us back, and we got back just in time. But,

boy, I am glad we made the parade. Those George Mason basketball players and the community, even more importantly, wanted an

opportunity to say thanks—thanks for all that entertainment,

thanks for making us feel good. The Redskins achieve that and the

Nationals will as well.

Now, I have a lot of misgivings over a situation where the owner

of a competitive team controls the broadcast rights for Washington’s team. I understand that a quarter of a century ago, 25 years

ago, there was a deal, and the country was carved up and the

Washington-Baltimore area was assigned to Mr. Angelos. Although

Washington had had a team, I don’t think they objected when the

Baltimore Orioles were established and the Washington Senators

were still here.

But that is a big problem, and I don’t think it is fair to the owners when broadcast revenue is as important as real estate, both of

which are a more important source of revenue than actual ticket

sales. So it is an issue that our constituents are very much concerned about.

On the other hand, Cox has reached a deal. They will tell us

about their perspective and whether it is a fair deal or not, and

they are providing these games in the only way that they can be

provided to Fairfax County. Comcast has chosen not to. I assume

it is all about the bottom line, but it could also be about principle,

about feeling as though they did not get a fair shake from Major

League Baseball, and that is why Major League Baseball is here.

But something has to give. This is too important to our community and the Washington metropolitan area. And if the Nationals

are going to succeed—and it is important to use that they succeed—the owner not only has to have enough revenue that they

can buy competitive players, but they have to be able to sustain

that fan base, and to do so they have to be able to show the games

on television.

So that is the objective of this hearing, and I know that Chairman Davis’ objective is that the four of you who can make it

work—the three of you, really, because Mr. McCollum is making it

work in Fairfax County. The three of you have to figure out a way

15

how it can work for the benefit of fans because that ought to be

the bottom line, not the dollars and cents, the ability of the Nationals fans to enjoy themselves and make this America’s pastime within the Washington area.

So thanks for having the hearing, Mr. Chairman.

Chairman TOM DAVIS. Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman. Thank you for your important leadership on yet another important issue.

Mr. Chairman, you are known as a baseball maniac who memorizes baseball statistics. But I can attest to the fact that when you

have focused on baseball in our committee, as with our hearings on

cheating in baseball by the use of steroids and other drugs, you

have always focused us on a very serious concern. That is what you

are doing this afternoon.

There is joy in the city at the return of baseball after 35 years,

especially among Washingtonians like me. We remember life in

Washington as kids when the city had almost 800,000 people and

the suburbs were the hinterland. We remember Griffith Stadium

and the Washington Senators, whose ineptness at the game was

matched by the team’s inapt name in a city that did not have a

mayor or a city council, much less Members of the House and Senate.

Nevertheless, even in segregated Washington, the Senators gave

the city an identity distinct from official Washington, an identity

to which all could relate.

As D.C.’s Congresswoman, I particularly welcomed baseball’s return to Washington because when baseball left, it took something

away from the District’s place among great American cities. D.C.

could not retain its place among the Nation’s big cities that

mattered without reclaiming the sport identified with the Nation

itself. Although most major sports teams had long understood that

Washington is a mandatory location, baseball was a very slow

learned in coming to grips with this reality.

Sad to say the return of baseball is something of a counterfeit

slogan, with 75 percent of the games blacked out by a lose-lose dispute that turns its back on the region that has already demonstrated its allegiance to the team and lined the pockets of baseball. Baseball and much of the region gave the Bronx cheer to the

city council, which is footing the bill for the big party, because the

council did not simply fall in line and pay whatever it took. However, the council proceedings were typical of elected officials and

expected of the democratic process, especially one involving the

city’s resources.

However, what are we to think of baseball and Comcast, who are

caught in a deadlock more typical of the public’s view of silly politicians? When business interests see that each is losing money or not

maximizing profits, we are told they focus on the bottom line. Nationally, local and regional TV and radio contribute about half of

all its broadcast revenue to baseball, far more than other sports.

The A list team of baseball—New York, Los Angeles, and Chicago—are all located in major media markets where the teams

have used TV to grow their fan bases, and with them their own

revenue.

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So why are baseball, which finally got the sense to move a longsuffering team from Montreal to a platinum major market, and

Comcast, this region’s regional network provider, leaving money on

the table and the fans with dark screens? Is MASN, the startup

fledgling network, even talking with Comcast? The public is clamoring for answers and deserves better than the silent treatment

and dark screens.

That is why this hearing is particularly important. Today’s hearing may be the first time all the relevant actors have been in the

same room or have sat at the same table. If they are as good at

business as their putative reputations, perhaps somebody will

strike up a conversation that leads to striking a deal.

Thank you, Mr. Chairman.

Chairman TOM DAVIS. Well, thank you very much.

[The prepared statement of Hon. Darrell E. Issa follows:]

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Chairman TOM DAVIS. We are now going to get to the panel. Let

me just note for the record everybody is appearing here voluntarily.

We appreciate it. Mr. Cohen, I know you have an engagement out

of the area later in the day, and hopefully our schedule will let you

get out at a reasonable time. In this committee, we always swear

everyone in before you testify, so if you would just rise and raise

your right hands.

[Witnesses sworn.]

Chairman TOM DAVIS. We have Mr. Bob Dupuy, the president

and chief operating officer for Major League Baseball; Mr. Peter

Angelos, the president of the Baltimore Orioles, which is the general partner of the entity known as the Mid-Atlantic Sports Network; Mr. David Cohen, the executive vice president of Comcast

Corp.; and Garry McCollum, the vice president and regional manager for Cox northern Virginia.

Mr. Dupuy, we will start with you give you as much time as you

need. Your entire statement is in the record, but take what you

need to make your points, and then as soon as you are through,

we will get to questions. Thank you for being with us. You need

to push your button there.

STATEMENTS OF ROBERT A. DUPUY, PRESIDENT AND CHIEF

OPERATING OFFICER, MAJOR LEAGUE BASEBALL; PETER G.

ANGELOS, CHAIRMAN AND CHIEF EXECUTIVE OFFICER,

BALTIMORE ORIOLES; DAVID L. COHEN, EXECUTIVE VICE

PRESIDENT, COMCAST CORP.; AND GARY McCOLLUM, VICE

PRESIDENT AND REGIONAL MANAGER, COX NORTHERN VIRGINIA

STATEMENT OF ROBERT A. DUPUY

Mr. DUPUY. Thank you, Mr. Chairman. Good afternoon. My

name is Bob Dupuy. I am the president and chief operating officer

of Major League Baseball, and I appreciate the opportunity to appear before you and the committee this afternoon.

Major League Baseball understands the concerns of this committee over the lack of full telecast distribution of Washington Nationals games because we share that concern. One of the primary responsibilities of baseball’s central offices is to maintain and increase the high level of interest and enthusiasm in our sport. One

way we have done that for over half a century is to make large

numbers of game telecasts available to our fans, both nationally

and locally. Today we are very proud of how well we serve the television viewing public through a combination of national telecasts,

regional telecasts, out-of-market telecasts for displaced fans, and

games and highlights streamed on the Internet. Virtually all of our

2,400 games are available in the local markets through a combination of over-the-air, cable, and satellite distribution, and increasingly, games and highlights are being distributed through new

technology platforms such as cell phones, PDAs, and other wireless

devices.

We, too, are delighted at the return of baseball to our Nation’s

Capital and also delighted that we finally have a lease and MOU

in place after a year of negotiation. We would like to see the Nationals’ telecasts made available to all of their fans, and that was

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our expectation a year ago when we entered into the television arrangements involving MASN. The MASN agreement resulted from

a long and difficult process intended to find the best new home for

the Montreal Expos. That team had almost completely lost its local

following in Montreal where none or only a handful of games were

broadcast. After a long and competitive process, the commissioner

and owners settled on the District of Columbia as the new home

for the Expos. However, Major League Baseball’s responsibility to

grow fan interest applies to all 30 of our teams, and the commissioner felt strongly that any relocation of the Expos had to be done

in a manner that was consistent with the goal of maximizing the

viability and popularity of all our teams, including the Baltimore

Orioles.

After baseball decided upon Washington as the Expos’ new home,

Mr. Angelos and I entered into lengthy discussions and negotiations over the best and fairest way to move the team here, less

than 50 miles from Camden Yards. Many of our discussions focused

on the Nationals’ local telecast rights, and we entered into a deal

that we believe was fair for all parties. That deal has been frequently misunderstood and misreported, although I would like to

indicate that there was a fair and balanced report of the deal written by Mayor Anthony Williams and Councilmember Jack Evans

that appeared in the Washington Post on April 14, 2005, and I

would respectfully request that the Chair allow me to make this

part of the record.

Chairman TOM DAVIS. Without objection, that will be part of the

record. Thank you.

Mr. DUPUY. Thank you, sir.

[The information referred to follows:]

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Mr. DUPUY. What the deal does do is provide for a guaranteed

market rate annual revenue stream to the Nationals for their telecast rights, which should obviate the concerns of Congressman Burton that somehow this was a sweetheart deal for the Orioles. In addition, the number that the Congressman quoted, I would note for

the record, of $750 million is a multiple of more than 10 higher

than any team in Major League Baseball receives for their local

rights. So where the number of $750 million came from is, frankly,

beyond me.

It was also intended to provide broad distribution of both Nationals’ and Orioles’ telecasts. For example, rather than carve up the

two teams’ territories—as could have been done—we chose to distribute both teams across the entire territory, allowing existing

Orioles fans to retain their allegiance and allowing new National

League and Nationals fans to emerge from the entire geographical

reach.

As you know, as technology and distribution platforms have developed and evolved, a number of our teams have recently created

their own regional sports networks, as has been done here. And full

distribution of those networks has typically taken some time, as it

has here. Mr. Angelos’ testimony will cover the details of MASN’s

attempt to reach a distribution deal with Comcast. Let me say that

baseball is disappointed that there has been litigation over this

matter. We share the frustration of Nationals fans and the feeling

that a business deal here should replace a court or administrative

fight.

While we have not been involved directly in the MASN negotiations with Comcast, our office has been in contact with both parties

to urge them to resolve their differences. We would also note, as

members of the committee have, that MASN does have deals in

place for Nationals games with Charter, Cox, DirecTV, Verizon,

and RCN.

For the benefit of Nationals fans who are Comcast subscribers,

we urge that an agreement quickly be reached for the carriage of

Nationals’ telecasts.

Thank you.

[The prepared statement of Mr. Dupuy follows:]

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Chairman TOM DAVIS. Thank you very much.

Mr. Angelos, thank you for being with us.

STATEMENT OF PETER G. ANGELOS

Mr. ANGELOS. Thank you, Mr. Chairman, members of the panel.

Thank you for inviting us here today to discuss the issue which you

have alerted us to and which we are obviously thoroughly conversant with.

I have listened to what was said a moment ago or a few minutes

ago by Congressman Burton, but I shall not address those items

that he talked about; but, rather, I am here to ask you to do all

that you can to facilitate the distribution of Washington National

games over paid television systems.

This may seem paradoxical to you that the owner of the Orioles—that is, the majority owner. I should remark that we have 18

other investors who contributed to the purchase of the Orioles out

of bankruptcy in 1993. I am committed to promoting the distribution of Nationals games because, obviously, we have a vested interest in seeing to it that effort will be successful.

As has been commented, we now have under contract five distributors, very sophisticated and very long in the business of distributing programming. And the games are now available to 2 million subscribers of these companies.

Now, we made, we believe, an agreement with Major League

Baseball that Mr. Dupuy just touched on which was one that would

benefit both clubs. The idea was that by establishing a regional

sports network, essentially composed of the two baseball teams and

offering those games throughout the entire Orioles home television

territory, which runs from Lancaster, PA, down through central

Pennsylvania, all of Maryland, all of Delaware, all of the District

of Columbia, all of Virginia, 13 counties in West Virginia, and half

of the State of North Carolina. We now share that territory, Mr.

Chairman, with the Nationals, and we are promoting the inclusion

of the Nationals games right through that entire territory along

with the Orioles, who are now being projected through that territory by Comcast in the final year of a contract that they have held

with the Orioles for 10 long years.

I might say at this point that the highest rights fee that we have

ever received in those 10 years from Comcast for that entire territory, Mr. Chairman, is in this particular last season that Comcast

will have the Oriole rights to use on their distribution system. The

highest they have ever paid is $18,450,000 for the entire territory.

So our commitment to the Nationals at $20 million, which next

year goes to $25 million, we believe was a much more generous and

sensible kind of arrangement that was made with Major League

Baseball, and obviously, I believe that will ultimately be the arrangement that the Nationals will have once the new owner has

been selected.

So we are able to say that in addition to the $20 million that we

paid in the year 2005, $20 million in the year 2006, and $25 million in 2007, and thereafter even higher fees will be paid to the Nationals, and the Orioles, for that matter, we believe that along with

that, a special arrangement has been made with the Nationals in

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that they initially start with owning 10 percent of the RSN and

over a period of years will ultimately own 33 percent of the RSN.

Now, there have been comments about our opposition or specifically my opposition to the location of the Nationals in Washington,

DC. When we learned that was going to be accomplished, we obviously were concerned—concerned, one, that the inclusion of a team

not 50 miles away, as Mr. Dupuy has mentioned, but actually some

35 miles away if you measure from border to border, but actually

the establishment of the Nationals at the proposed new baseball

stadium in probably 2008, or while they are at RFK, brings another team roughly 8 miles away from one of the counties that is

part of our franchise, that is, Howard County or Anne Arundel

County and so on. Formerly, we enjoyed all of that territory. But

the decision was made, and we made a decision to live with that

arrangement. And concurrently, as Mr. Dupuy has said, we arranged to work things out with Major League Baseball to share our

territory with the Nationals, to establish the RSN that has been

talked about, and thereby to create an opportunity for both teams

to benefit and, moreover, to allow the Orioles to gain extra revenue

to make up for what is expected to be at least a 25-percent reduction in attendance as well as other potential diminution in income

that the club has been accustomed to for some 30 years.

I might say that the territory that I described has been the Oriole home television territory for more than 30 years. Nonetheless,

it is now the territory, through the efforts of Mr. Dupuy and the

commissioner, of both teams, and both teams can produce and

present their games within that territory.

Now, the purpose, therefore, of asking that this arrangement be

made was, as I said, to make up for the expected losses that our

team will suffer. Now, the comment that we control the games I

think is absolutely incorrect, especially because we don’t control the

games. We can present the games. But the ultimate control as to

what is going to be paid for the rights from period to period is in

the hands of Major League Baseball and will remain there. If at

any time the Nationals would be dissatisfied with the fee structure,

the rights fee structure, they have a right to complain to Major

League Baseball and demand that a survey be made to guarantee

that fair market value payments are being made for the rights fees

for the rights to their games. So I think that is important to understand, that we do not exercise any authority over the team. We

cannot set the rights fees without the approval of Major League

Baseball.

As to the quality of the presentation, Major League Baseball controls that also. If we do not perform up to a quality level and the

Nationals are not satisfied with the presentation of the games by

MASN, they have every right to petition Major League Baseball to

compel us to correct the situation.

So the issue here really is not the litigation that ensued that was

referred to previously or litigation that might ensue in the future.

The issue here is why doesn’t Comcast put the National games on

their distribution system. As has been said repeatedly, five other

companies have done so. Five other companies have accepted the

rate schedule that was recommended to them, and the games are

being seen by 2 million people within the territory that I described.

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We think that Comcast does not want to do that because they

want to protect what they already have. They have had their way

for so many years, they feel that no one should interrupt their monopolistic arrangement where they do not have any competition

and where they simply deal with sports teams essentially on the

basis of what they think is appropriate, since essentially there is

no competition within the broad territory that I described. There

are other distributors, but Comcast is not just a distributor.

Comcast is a program generator. And, obviously, it prefers to hold

onto what it has and does not appreciate the competition that

MASN is providing. One might say that is an understandable business attitude, that what a business has it wants to keep. But, unfortunately, it should not be allowed to keep what it has had at the

expense of the fans of the Nationals or, for that matter, the Orioles

or, for that matter, any sports team.

I think they have an obligation to show the games, to present the

games of the Nationals. We have approached them more than five

times, and they have refused not a particular approach that we

have talked about. Why, they will not even talk to us about it.

They do not want to have any discussion about whether or not we

can get together.

Now, we are ready. We have been ready for over a year. And I

am sitting here next to Mr. Cohen, and I am prepared to sit down

and shake his hand and make a deal with him now and let all of

the differences and all of the acrimony that has ensued in the past

disappear. But that is up to them. The price—our rates, we carefully made sure, are just about what Comcast charges, and maybe

a tad less and maybe—well, I say a tad less. And when we have

the Orioles in 2007 along with the Nationals, actually our rate will

be less than what the Comcast level is presently.

So just as I urge you, Mr. Chairman and other members of the

committee, do not be deceived by the arguments that are being advanced by Comcast. Just like their lawsuit, give those comments

and those positions no credence. The lawsuit that Congressman

Burton talked about or referred to was tossed out of court peremptorily by the judge, who said on two different occasions because

they filed it two times, ‘‘Your case, gentlemen, is dismissed because

you have failed to state a cause of action.’’ And I would apply that

same argument to their position now, that somehow or other putting the games on is going to cause the Comcast company some

kind of negative consequences. What will happen is they will then

have the games of the Orioles and the Nationals, and they will

make their fans happy, and the fans will see the Nationals and the

Oriole games and be certainly grateful to you, gentlemen and ladies, for all that you have done to make that come about.

I urge you to put the pressure on them. They should put those

games on now. Thank you.

[The prepared statement of Mr. Angelos follows:]

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Chairman TOM DAVIS. Thank you very much, Mr. Angelos.

Mr. Cohen, thank you for being with us.

STATEMENT OF DAVID L. COHEN

Mr. COHEN. Thank you very much, Mr. Chairman, and thank

you for providing us the opportunity to testify here today. Let me

start by making a clear and unmistakable point. We at Comcast

are fans of the Washington Nationals, we want to carry as many

of the teams’ games as possible, and we are absolutely committed

to solving the current dilemma.

It is also important to note that Comcast has always supported

the return of Major League Baseball to the Washington, DC, area.

This position distinguished us from the Baltimore Orioles, which

apparently believed that a Washington baseball team would result

in a loss of fans and television revenue and, therefore, would reduce the value of that team. It is certainly Mr. Angelos’ right to

advocate on behalf of the economic interests of the Orioles, and

that is properly a matter that should have been resolved between

MLB and the Orioles.

The problem that confronts us today began when MLB came up

with its very odd solution to this problem. It is what I refer to as

‘‘the original sin’’ in this entire episode. You see, MLB chose to

compensate the Orioles by giving the team control of the Nationals’

local television rights. This was the first time in history of which

we are aware that a team’s rights have been handed over to a rival

franchise.

Now, Comcast is agnostic as to whether or not MLB owes the

Orioles compensation as a result of the relocation of the Nationals.

But we do object to how MLB has chosen to compensate the Orioles—by assigning the television rights of the Nationals to that

competing franchise. By doing this, MLB has tried to foist onto

D.C. cable customers, your constituents, Mr. Chairman, their obligation to compensate the Orioles. That is unfair to our customers,

and it is just plain wrong. Let me explain.

The Orioles and MLB have created a new regional sports network, MASN, which is trying to charge satellite and cable providers more than $2 a month per subscriber once MASN is carrying

Nationals and Orioles games. This charge is for a channel that has

no programming right now other than the Nationals games. Even

today, 1 year after its launch, MASN offers no sports newscasts, no

college games, and no other sports contests. In fact, for nearly

8,000 hours a year, MASN offers nothing but a dark screen. It is

no wonder that Communications Daily reported last week that

independent analysts believe that MASN is asking too much for

carrying the network.

What does this mean for Washington area consumers? Only this:

Over the next decade, assuming that cable and satellite companies

pass along these increased programming costs to their customers,

as Cox has pointed out it will have no choice but to do, this arrangement will transfer more than $600 million from Comcast customers and your constituents and more than $1.3 billion from all

D.C. area cable customers to a business that is controlled and majority-owned by the Orioles.

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Of course, at the same time that this assignment of the television

rights to the Orioles hurts our customers, we believe that it also

hurts the Nationals. According to MASN’s own Web site, and as

Mr. Angelos confirmed today, the network paid only $20 million to

the Nationals last year, and I gather this year. This is well below

what we believe the market rate is. And we know this because we

offered to pay more for those rights. And I would suggest to you

that the only way you can set a market rate is to have those rights

being made available on the market and to see what people would

agree to pay for them. A mechanism by which the Nationals can

appeal to Major League Baseball if they do not like the rights fees

they are getting is not a market rate adjustment and does not

guarantee the Nationals a market rights fee over the life of the

franchise.

Even more unbelievable, though, is that the rights deal states

that, at least until 2011, the Orioles will not get less for its TV

rights than the Nationals, contractually eliminating the real differences in the value of the Washington market, which is the 8th

ranked DMA in the country, from the Baltimore market, which is

the 24th ranked DMA in the country.

Moreover, we believe that this deal creates a real and substantial

conflict of interest. Last year, by way of example, the Orioles negotiated over-the-air broadcast deals that did not provide the Nationals with carriage in many D.C. suburbs and in certain Baltimore

markets, while negotiating deals for the Orioles that included all

homes in the D.C. and Baltimore markets. And this year, it was

the Orioles, not Comcast, that decided to slash the number of Nationals games on over-the-air broadcast television from 81 to 39

games. That is how we find ourselves here today. But we are not

here to assign blame. We are here to help find a solution.

We have suggested that Major League Baseball and Mr. Angelos

do what is right for the Nationals, for their fans, for our customers,

and for your constituents. They should return control of the Nationals television rights to the Nationals, their rightful owner. Let

the team engage in a process for the sale of its local television

rights in which all legitimate telecast partners are invited to make

proposals. MASN can participate in this process, as can Comcast

SportsNet and any other regional sports net that might want to do

business in this market. If MLB’s owners believe that their colleague deserves compensation, let them pay him directly rather

than shifting this burden to cable and satellite customers and to

your constituents.

If the parties will agree to this solution, Comcast will immediately begin televising all Nationals games that are available for

local cable broadcast. We have also offered the Nationals an additional rights fee equal to what MASN is paying the team, I learned

today $20 million this year, for the non-exclusive rights along with

MASN to televise these games this year while this gets worked out.

The fans will benefit because all of the games will be on television,

and the Nationals will prosper through a doubling of their rights

fee as they deserve to. We have to find a solution that is in the best

interest of all the parties to this situation. In our view, that requires undoing the original sin of the disinheritance of the Nationals of their TV rights. Our proposal will get the Nationals games

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on the air fast. It will give the Nationals fair market value for the

team’s local cable rights. And it will allow Major League Baseball

and the Orioles to work out their issues in a way that does not pick

the pockets of our customers. That, Mr. Chairman, to borrow a

baseball analogy, would be a grand slam.

Thank you very much.

[The prepared statement of Mr. Cohen follows:]

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Chairman TOM DAVIS. Thank you very much.

Mr. McCollum, thank you very much for being with us today,

and thanks for bringing the Nats to Fairfax.

STATEMENT OF GARY McCOLLUM

Mr. MCCOLLUM. Thank you, Mr. Chairman and distinguished

members of the House Government Reform Committee. I am Gary

McCollum. I am the vice president and regional manager of Cox

Communications, and I am responsible for all local operations.

Cox is a major contributor the local economy. We employ 900 local citizens in the Fairfax area. We contributed $13 million in

cash and in-kind donations to the local community last year. Since

1996, Cox has invested more than $640 million in northern Virginia to upgrade our technology to provide more bandwidth, not

only for digital cable, including high-definition television, but also

for high-speed data and telephone service.

Again, thank you for the opportunity to testify about sports programming and the Mid-Atlantic Sports Network. There is no question that sports are deeply imbedded in our social fabric.

Likewise, America’s love affair with television is a way of life.

The vibrant cable TV industry has done a lot for sports. First and

foremost, we extend its reach by creating front row seats for every

game in the living rooms of millions of Americans. And we create

excitement about the teams and their players. Sports wouldn’t be

the mega-business it is today without cable television.

It is important to understand that Cox is a retail distributor of

a wholesale product—cable programming—including channels like

Fox News, Nickelodeon, and ESPN. As you know, any business

that retails a wholesale product is subject to market forces. Gas

prices rise at the pump when the cost of a barrel of oil rises. Likewise, cable prices increase when programming costs escalate. This

year our programming costs are projected to increase 13 percent,

and with the addition of MASN, that increase will grow to nearly

18 percent.

The sports leagues and team owners are able to pass their uncontrolled costs through the cable operators, insulating them from

consumer backlash. Since these costs are passed through to the

consumer without consequence to the owners, the owners are uninhibited about controlling such costs.

Cox is no longer willing to be the scapegoat for the real culprits.

Now more than ever we are telling our customers why their bills

are rising and how sports programmers are holding the fans hostage.

We know our customers want to watch the Nationals, and with

those customers squarely in mind, we attempted to negotiate a

long-term deal to show the games. On March 8th, we announced

an agreement to make available MASN’s telecasts of Nationals

games on our Expanded Basic service to nearly 260,000 customers

in northern Virginia. While the terms of that agreement are confidential, I can assure you that this programming did not come

cheaply and will affect cable prices.

Clearly, the added cost of this programming is not a good thing

for our customers. But our baseball-starved community is hungry

for televised games. Are fans willing to pay this unreasonably high

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cost for sports programming? Well, they may not see the connection, but the high rates for which customers express concern are,

in fact, driven largely by these out-of-control sports costs. So, on

the one hand, our customers want the games. And, on the other

hand, they criticize our rates increasing directly because of the

games. This is a no-win situation to cable operators.

So let me be clear. While the agreement contains costs and channel space requirements that remain very onerous to Cox, it simply

reflects the realities of our customers’ desire for Nationals games

and our relative inability to negotiate better terms and conditions.

For the sake of all cable customers in this market, Cox had

hoped that MASN would realize the efficiency of joining with

Comcast SportsNet to occupy one channel on everybody’s lineup.

That would have allowed us to better manage network capacity and

programming costs that drive up cable rates.

We entered into a deal with MASN because we had little or no

negotiating leverage as a small player in the very large Washington metro market. Remember, a reasonable deal eluded Cox and

our customers for an entire season. This year, in spite of the outrageous costs, it was time for us to deliver the games of our local

major league team to our hungry customers. We broke down and

concluded an agreement with the fervent hope that if anybody can

change or improve the deal, it is the metro area’s biggest player—

Comcast.

But, Mr. Chairman, I must put this urgent question before the

committee. The owners of Major League Baseball and Commissioner Selig have granted to the owner of the Baltimore club what

appears to be a sweetheart deal. TV revenues from the broadcast

of the Washington Nationals baseball games are transferred from

the pockets of the new entrant Washington Nationals to the pockets of their neighboring Baltimore team through its interest in

MASN. So if monopoly rates are paid to MASN, Mr. Angelos wins.

And if there is no agreement to pay these monopoly rates and the

fans of the Washington Nationals are cheated of the opportunity to

see their team, the neighboring Baltimore team wins as well. So

what is MASN’s incentive to moderate its behavior? None.

Mr. Chairman, sooner or later, the underlying problem of escalating sports entertainment costs must be addressed. It is a very serious problem for all of us, including Comcast, in the business of trying to provide such entertainment to the American consumer at a

reasonable price.

Cox’s mantra is that we are ‘‘Your friend in the digital age.’’ Our

relationship with our customer is our primary advantage. Our customers trust us. They depend on us, and I am directly accountable

to these customers. And for their sake, I implore all of those involved in the sports supply chain to rein in prices and stop holding

the fans hostage.

Thank you very much for allowing me to address you today.

[The prepared statement of Mr. McCollum follows:]

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Chairman TOM DAVIS. Thank you very much.

Well, we certainly heard four different perspectives on the issue,

and I think the question for us today is can we work toward a resolution of this in a timely manner.

I am going to start with Major League Baseball, Mr. Dupuy. Let

me first start, before I get here, and just say I don’t know if this

would add to it. Are we any closer to naming an ownership entity

for the Nationals? Because I think that would help.

Mr. DUPUY. We are certainly closer. I mean, every day we get

closer. But, yes, now that we have, as I mentioned, thanks to the

hard work——

Chairman TOM DAVIS. Everything is done——

Mr. DUPUY [continuing]. Of Mayor Williams, Chairman Cropp,

and other members of the council, we have a signed lease, we have

a signed MOU. I have met with four of the groups over the last

week and a half. I have had extensive discussions with the commissioner, and I would expect it to happen within the next couple of

weeks.

Chairman TOM DAVIS. I just feel that a lot of these problems

could get resolved if we could get ownership on the table or, you

know, and I think enough said. And I think the mayor has expressed that, and all of us have.

Mr. DUPUY. We are all anxious to have that happen, Mr. Chairman.

Chairman TOM DAVIS. Mr. McCollum, let me start. Is MASN

more expensive than Comcast cable, Comcast SportsNet? Do you

know offhand, are you paying more for the games on a per-game

basis than you would under—because you carry them, but you

carry them both.

Mr. MCCOLLUM. I carry them both, but, again, those——

Chairman TOM DAVIS. You don’t want to get into the confidentiality agreement?

Mr. MCCOLLUM [continuing]. Agreements are confidential. I can

honestly say, Mr. Chairman, that the deal was a very onerous deal

and the price was very costly.

Chairman TOM DAVIS. Is Comcast Cable also an onerous deal?

Mr. MCCOLLUM. I would say it is apples and oranges because—

and Mr. Cohen alluded to this—what is on Comcast SportsNet in

terms of content is clearly different than what you see on MASN.

MASN for the most—when there is not a game shown, there is

nothing on the screen.

Chairman TOM DAVIS. Our biggest frustration is everybody has

come at this from such different directions. I mean, one group is

talking here, another group is talking over here, and there is no

way that we are going to intersect these lines. I am trying to figure

a way that we could get closer on this. For example, pay-per-view,

is that an option?

Mr. COHEN. Let me take a first shot at that. I think—are you

talking about pay-per-view or literally on a per-game basis, or——

Chairman TOM DAVIS. Either on a per-game basis or a different

tier or level, or whatever.

Mr. COHEN. A la carte or per tier basis. Well, I think, Mr. Chairman, you have heard the cable industry’s view on a la carte proVerDate 11-MAY-2000 09:56 Aug 17, 2006 Jkt 000000 PO 00000 Frm 00184 Fmt 6633 Sfmt 6633 D:\DOCS\28227.TXT HGOVREF1 PsN: HGOVREF1
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gramming. You have probably heard me express this view. I think

for a long-run——

Chairman TOM DAVIS. Right. Just from a fan’s perspective.

Mr. COHEN. I understand.

Chairman TOM DAVIS. Everybody is a businessman here, but the

fans are kind of getting left out. Go ahead.

Mr. COHEN. From a long-run public policy perspective, I believe

and the industry believes that an a la carte approach to programming will result in less choice for the consumer at greater expense.

As a short-term bridge, while other issues are worked out, you

know, if somebody wants to talk to us about offering Nationals

games on a more limited basis, it is certainly something that we

would be willing to talk about. Our primary interest—and I am

going to reiterate this—is to make sure that the Nationals, their

fans, our customers, and your constituents are treated properly and

are successful. And so we are open to any discussion, any idea that

would permit those objectives to be achieved.

Chairman TOM DAVIS. But you have not been talking to Mr.

Angelos. Is there any way we can get together and put some of

these on the table and go back and forth? Maybe Major League

Baseball could be the adult here in trying to oversee this.

Mr. COHEN. I am happy to have Major League Baseball be another adult in the process. I think Mr. Angelos and his representatives and Comcast and our representatives have been adult as well.

I think——

Chairman TOM DAVIS. But you are not talking.

Mr. COHEN [continuing]. I would quibble a little bit with Mr.

Angelos’ characterization that there have been no discussions.

There have been discussions. This week, when we received our latest offer from MASN—and let me be clear. Our offer from MASN

is the same offer that MASN has always given us. They have never

given us anything other than their original offer. But a meeting

has been scheduled between representatives of MASN and representatives of Comcast in response to that.

Chairman TOM DAVIS. Well, let me ask this: Is the offer to

Comcast any different than the offer to Cox, Mr. Angelos?

Mr. ANGELOS. No, it is not, and the communication that Mr.

Cohen refers to occurred 2 or 3 days ago. We finally got a response

2 or 3 days ago, clearly in anticipation of this meeting. And I notice

that Mr. McCollum does not want to answer the question. Are our

rates any different than Comcast? And I will answer it. The answer

is no, they are not different. They are actually just the same. And

they are that way purposely because we were careful to make sure

that we did not charge any more than the going rate so we would

be fair and concerned about the subscribers.

Chairman TOM DAVIS. But, Mr. Angelos, Comcast is 24/7.

SportsNet is 24/7.

Mr. ANGELOS. I can answer that. You are going to have only——

Chairman TOM DAVIS. No, I am just trying to get—I am not trying to take sides. I really—-go ahead.

Mr. ANGELOS. I would like to respond. We have under construction presently a full facility for the purpose of presenting 24/7 of

the kind that Mr. Cohen refers to, and he is correct that at this

moment that is not in place, but we have only been at it for a year,

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Mr. Chairman. And despite the absence of cooperation from our

monopolists here, we have not—we have been pretty busy. We have

been sued. We have been castigated. We have been vilified. We

have been everything that one can imagine has been done. We

have had lawsuits filed against us totally without merit, and we

have constant indications publicly that somehow or other we are

about—or involved in an inappropriate business or being unfair

and so on.

Chairman TOM DAVIS. Well, let me ask you this. Let me fast forward this a year. As I understand, next year at this time MASN

will have the Orioles rights as well as the Nationals rights. Is that

correct?

Mr. ANGELOS. Yes, Mr. Chairman, and I did not answer your

question properly. We will have 24/7 as of July 15th of this year.

Chairman TOM DAVIS. OK. That is fine. But I am just fast forwarding this a year. As we go a year from now, MASN will have

both the Orioles and the Nationals rights. If Comcast still refuses

to carry it at that point because it is not on Comcast SportsNet,

fans will be deprived of the Orioles and the Nationals. Is that correct?

Mr. ANGELOS. Our system will have both the Orioles and the Nationals, and they will be shown. Both teams will be presented

throughout that entire territory. If you are in Washington——

Chairman TOM DAVIS. You present it, but if the local cable affiliate does not carry it——

Mr. ANGELOS. I am sorry?

Chairman TOM DAVIS. If the local cable affiliate, whether it is

Comcast or whoever, does not carry it, then people that are receiving it on Comcast SportsNet this year would have to receive it

under MASN next year, right? The Orioles.

Mr. ANGELOS. Yes, or any distributor that is carrying MASN.

Chairman TOM DAVIS. Exactly. But I guess my point is, if we do

not breach this, this could widen next year where fans won’t even

be able to get Orioles games on Comcast. Do you want to comment

on that, Mr. Cohen?

Mr. COHEN. Obviously, I have a different view about what will

happen next year.

Chairman TOM DAVIS. Well, I will be happy to hear it.

Mr. COHEN. Our belief is that we have clear contractual—that

Comcast SportsNet has clear contractual rights to continue to carry

the Orioles games. Although Mr. Angelos has accurately characterized what happened in the courts below, we believe that the lower

court was mistaken. That is why we appealed. And we believe that

we will be in a position to vindicate our rights.

Chairman TOM DAVIS. And if you aren’t?

Mr. COHEN. And if we aren’t, then the situation you describe is

accurate unless we are able to reach an agreement with MASN before the beginning——

Chairman TOM DAVIS. Would reaching an agreement this year

while the case is pending prejudice the court case, in your opinion?

Mr. COHEN. I think the answer—to be fair, I think the answer

to that is probably not. I think the relevance of the court case to

us is that we believe that MASN is in part spawned by a breach

of our contractual rights, and we are not eager to do business or

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continue business with an entity that would flout those rights. I

don’t think I can point to a prejudice of the court case from entering into a deal.

Chairman TOM DAVIS. And even if it were, you could enter into

an agreement, the two of you, that it would go ahead without prejudice, correct?

Mr. COHEN. We would not assert the existence of the litigation

or the merits of the litigation or effect on the merits of the litigation as a reason why we are not carrying MASN.

Chairman TOM DAVIS. But you don’t like MASN and what they

have done and the way the deal has been set up, correct?

Mr. COHEN. Again, with—and it is funny. I said——

Chairman TOM DAVIS. I don’t mean personally. I just——

Mr. COHEN [continuing]. Before the hearing. It isn’t personal,

and we respect the rights of MASN to exist in the marketplace. We

respect the competitive element that they bring to the marketplace.

I think we, as anyone would, resent being called a monopolist. I

think that when you have a network that, according to the structure of the agreement between Major League Baseball and the Orioles has the rights in perpetuity for two teams—the Baltimore Orioles, because they are owned by the majority owner of the network,

and the Washington Nationals, because those have been granted—

where neither of those rights ever has to go out in a process where

anyone else in the market has an opportunity to be able to carry

those rights, I think—I mean, I hate to say this, but I think MASN

is sitting in the unfair competitive advantage and not Comcast

SportsNet.

Chairman TOM DAVIS. Well, I think you could make an argument

we are dealing with two monopolists, Major League Baseball,

which is granted a monopoly under antitrust exemption, and your

cable franchise, which basically has a monopoly, and part of that

is before Congress now, depending what the openness is going to

be. But not——

Mr. COHEN. I do not think—let me say this, because let me give

the numbers to be fair. I don’t think Mr. Angelos was saying that

our cable system is a monopolist, although maybe he was. I think

he was referring to Comcast SportsNet as a monopoly regional

sports net.

If you look at this whole market that Major League Baseball has

defined—and let’s understand this. This is not a natural market.

Chairman TOM DAVIS. Right. Correct.

Mr. COHEN. This is a Major League Baseball defined market.

Chairman TOM DAVIS. There are local cable franchises that——

Mr. COHEN. But we are—and in that entire market, there are 6.9

million television households——

Chairman TOM DAVIS. But if you are in Prince William County

or you are in Montgomery County——

Mr. COHEN. If you want to go on a county-by-county basis, you

might reach a different conclusion. But we control less than a third

of the households in that entire——

Chairman TOM DAVIS. Well, I agree, but a lot of these other companies have been able to reach agreements, and they are smaller

than you. They don’t have pending lawsuits.

Mr. COHEN. I think you heard from Mr. McCollum——

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Chairman TOM DAVIS. I am not saying it is cheap. I am not saying it is cheap.

Mr. COHEN. And I think—and I am going to say this again. For

the benefit of everyone in the market, for the benefit of the customers in the market, for the benefit of the Nationals and their

fans, and with all due respect, for the benefit of your constituents,

somebody has to stand up and say no, enough is enough, and it is

time to protect the customers’ rights. And it is not fair, it is not

appropriate—it may be convenient—to characterize this as a dispute between a corporate giant and a business leader in the Baltimore market. I think it is unfair. I think that this is a situation

that has been created by the third party at this table, by Major

League Baseball in the way in which they have structured this.

And I think that it is totally appropriate for us, as Mr. McCollum

said, the company that does have an ability to stand up and say

we are going to try and protect the rights and the positions of our

customers and of your constituents.

And, by the way, my bet is, although I don’t know, my bet is that

Mr. McCollum has a most-favored-nations clause, what is called an

MFN, in his agreement and he may well get the benefit of whatever it is we are able to——

Chairman TOM DAVIS. I think that is accurate. I don’t think

there is any dispute on that.

Mr. COHEN. And so even though everyone may have reached

agreements, if——

Chairman TOM DAVIS. If you can drive a better agreement, they

benefit.

Mr. COHEN. Everyone is being honest about it——

Chairman TOM DAVIS. OK.

Mr. COHEN [continuing]. They are all hoping that we are going

to take care of this problem.

Chairman TOM DAVIS. My time is up. I am going to yield to Mr.

Van Hollen, but let me just say, Mr. Dupuy, this would really be

helpful for Major League Baseball, who is the owners of the Nats

at this point, to step in here and try to look after the fans. We have

waited in this region for over 30 years for a Major League Baseball

team, and to get fewer games this year over the air than we got

last year, it is a slap in the face. It is like giving us half a team.

Major League Baseball can step in here and try to get these parties

together, if only for a 1-year agreement, holding harmless everything else, so that our fans can see the games.

Mr. DUPUY. We would be delighted to help in any way possible,

as long as that help does not assume breaching contractual obligations.

Chairman TOM DAVIS. I am not asking anybody to do that. We

are going to have to be outside the box on some of this stuff, I

think, if we are going to get this done, because you are coming at

this from such different perspectives. I do not need to remind

Comcast and I think the cable industry has a lot of issues pending

up here. You know, this is not helpful to anybody over the long

term, not being able to reach this agreement.

OK, Mr. Van Hollen.

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Mr. VAN HOLLEN. Well, thank you, Mr. Chairman. I want to

thank all of you for your testimony. I do think it is helpful both

for us and for the public to get the facts on the table in this way.

Now, Mr. Burton in that opening statement he read made a comment that related actually to the question that the chairman just

asked of Mr. Cohen regarding the effect of the ongoing litigation on

Comcast’s willingness to try and sit down and work out a solution

right now as opposed to waiting until that litigation is resolved.

As I understood the statement that Mr. Burton had read that

was a Comcast statement, he said that Comcast was not willing to

enter into those kinds of discussions because they believe that the

MASN network was the result of a breach of contract.

Putting aside your legal position on that, is your position today

that you are willing to go forward now to try and work out an

agreement to air the——

Mr. COHEN. Congressman, I think I tried to at least touch on

that answer in response to the chairman’s question. There are a

whole host of reasons and a whole host of problems that we have

with negotiating a deal with MASN. And certainly the pendency of

the lawsuit but, more importantly, the breach of our contractual

rights is one of those reasons. Standing up for our customers is another reason. The price is a third reason. The programming that

is available is a fourth reason. And our willingness and our ability

to do what is right for the Nationals, for their fans, and for our customers and your constituents, and make sure that we end up—that

all of us end up—we are big citizen of Washington, DC. That is

why we were a big fan of bringing the Washington Nationals to

Washington. I want to say this. If we go and we sign a deal with

MASN, we are the last thing standing in between a protection of

the Nationals’ long-term rights and the status quo for them. And

if we sign that deal, 5 years from now, 10 years from now, mark

my word: Washington, DC, and the Nationals is going to have a

second-class franchise in a first-class city, and somebody is going

to be standing around screaming: How did this happen? Who let

this happen?

I am willing to say, in addition to all the other reasons that I

have noted, that we are willing to stand up and try and create the

incentive for the right thing to happen.

Let me ask this question. If we had signed a deal with MASN—

all right? And, by the way, I heard all the opening statements. A

lot of people properly said we have questions about this deal with

Major League Baseball. We have questions about what this means

to the Nationals, the future of the team, questions about the public

investment that Mayor Williams so artfully guided through City

Council. I heard all of that. If we had signed a deal with MASN

last summer, the end of the baseball season, before this season,

would this hearing be taking place? Of course not.

Our unwillingness to sign a deal is keeping a spotlight on the

original sin here, and that is this extremely unusual structure that

has been created, and resolution of that problem will solve this

faster than anything else.

Mr. VAN HOLLEN. Well, let me just—I was not—I understood

your answer to the chairman’s question to be different than the

way Mr. Burton had characterized Comcast’s position, which is

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why I was asking you the question. Taking everything you just

said, are you willing to sit down with Mr. Angelos or is Comcast

willing to sit down with the Orioles and taking all those variables

you mentioned into consideration, tomorrow sit down and try and—

or at least talk?

Mr. COHEN. As I also mentioned, we are willing to sit down with

anyone. Our only given is that we would like to get a deal done,

and as I mentioned, there is a meeting scheduled between representatives of MASN and representatives of Comcast. But I have

tried to put on the table here the whole host of concerns that we

have, some of which are resolvable in discussions with MASN, but

some of which are not resolvable in discussions only with MASN.

Major League Baseball needs to have a seat at that table and

needs to be involved in that process.

Mr. VAN HOLLEN. I understood Mr. Dupuy to say he would be

willing to sit down in that process. But I also understand your position to be unless Major League Baseball sort of undoes what you

have termed the original sin, you are not willing to reach——

Mr. COHEN. I think we are asking for Major League Baseball and

the Baltimore Orioles to do what is right for the Nationals and

their fans.

Mr. VAN HOLLEN. OK. Let me get to this price issue because I

think there is the apples and oranges issue, and we do hear that.

Mr. McCollum, you mentioned—as I understand the testimony so

far, the rate amount that you are being charged by Comcast, just

the rate—put aside the apples to oranges—is comparable to what

you are paying MASN. Is that correct?

Mr. MCCOLLUM. Again, Congressman, I cannot comment on the

specific rates. I think the point is that the deal that we have with

MASN is a very onerous deal and does put significant pressure on

our rates.

The other thing I would say is that it is not an apples-to-apples

comparison when you look at what they are offering in terms of the

content. Again, at home last night, looking at this network, there

is nothing—it is not a black screen. It is a blue screen with a computer-generated message saying ‘‘This is MASN.’’

Mr. VAN HOLLEN. I want to get to that, but let me just ask you

this. I mean, your customers also pay more, do they not, because

of the fact that you carry Comcast SportsNet?

Mr. MCCOLLUM. That programming——

Mr. VAN HOLLEN. OK. I mean, they pay more——

Mr. MCCOLLUM. All of our programming costs impact——

Mr. VAN HOLLEN. Look, I am just trying to figure out what the

impact on our consumers, our constituents is going to be. So they

pay more because you have Comcast SportsNet, and now you are

saying they are going to pay more if they carry MASN. Let’s get

to the apples-and-oranges issue here. As I understand what Mr.

Angelos just said, they have a plan in the works to have 24/7 programming. I have two questions here. One, won’t that make a difference? Will that then make it apples to apples? And, second, they

are a startup, as I understand it, and I guess my question to Mr.

Cohen would be, Comcast, when it started up some of its sports

nets in different cities around the country, have you never had a

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cable channel that just showed games, or has it always been—in

every case, has it been 24/7 programming?

Mr. COHEN. My history in the cable industry does not go back

far enough to answer that question with 100 percent certainty, but

I can tell you that in the last 18 months we have launched two regional sports nets—one in Chicago, a four-team regional sports net,

by the way, and one in New York, a one-team regional sports net.

In both cases, immediately upon launch, both networks were 24/7

networks.

Mr. VAN HOLLEN. OK.

Mr. COHEN. We don’t go out to the market and try and collect

the types of pricing that regional sports nets command without 24/

7 programming.

Mr. VAN HOLLEN. If it turns out MASN is going 24/7, would that

make it apples to apples?

Mr. MCCOLLUM. Well, I think the difficulty, Congressman, will

be—and, again, I would love to see the Nationals playing in October. The fact of the matter is baseball is a summer sport. 24/7 assumes 365—it assumes a year-round network. And Comcast

SportsNet clearly has Caps, it has Wizards, and it has Orioles

today. So I think when you really look at—I am encouraged by

what Mr. Angelos said today about what is going to happen on July

1st, but I am more interested in what is going to happen on December 1st.

Mr. VAN HOLLEN. All right. Let me also, if I may, Mr. Chairman,

just on this price issue, Mr. Cohen, as I understand it, you said

that Comcast proposed to pay more for the rights. Is that right?

Mr. COHEN. Correct.

Mr. VAN HOLLEN. Now, as a result of that, won’t my constituents

be paying more to Comcast?

Mr. COHEN. The answer—it is a very good question, a very important question. I think the experience around the country has

been that in markets with duplicate regional sports networks, the

customers end up paying more as a result, more for regional sports

net programming than they would pay in single regional sports net

markets. So although your constituents might have paid more—

and, by the way, a lot of this has to do with channel capacity as

well as Mr. McCollum referred—and, understand, I do not want

to—Mr. McCollum and I have met once before. We did not talk at

all before his testimony. I had no idea what he was going to say.

But notice that he pointed out from an independent cable provider

that has no regional sports net interests in this market—and I

don’t know that Cox has anywhere—that he said that he was hoping that there would be a single regional sports net in this market

because it would be most efficient to him and to his customers. And

that has been the national experience.

I would note, by the way—and I am not—we are a little constrained here, and I think we all understand the awkwardness of

it, not to get into the confidentiality of pricing. But I will tell you

and I will represent to you—and I hope all of you know me well

enough that I would not make this up—that we are in Comcast of

10 two-team regional sports nets in the country. And looking at the

pricing that MASN is proposing for next year, starting when it

would be a two-team regional sports net, it would have the highest

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pricing of any of those 10 regional sports nets anywhere else in the

country.

Mr. ANGELOS. I am reluctant to say it, but I will. Mr. Cohen’s

most recent statement is an absolute untruth. Moreover, his contention that more than one regional sports network in a given area

just is simply not the right thing to have, and he says that under

oath when his company is involved in a number of places in which

they have a regional sports network and there is an additional one

or additional three or even four. But he sanctimoniously sits here

under oath and tells you that what is really wrong here is that

there will be two regional sports networks in this area and somehow that is going to be catastrophic for the consumer.

And let me address Mr. McCollum’s position. The only reason

that they finally came to the table to put the Nationals on is because Verizon has brought the competition that this industry—

their industry—has needed for maybe further back than Mr. Cohen

was talking about, which he won’t have too much information on.

The competition has come to Fairfax County, and that brought

Mr. McCollum—Mr. Wilson to the table to make the arrangements

with MASN to put the National games on. No Verizon, there would

not be any deal with Cox. It is that simple. And that is what Mr.

Cohen’s people need, and that is what Mr. McCollum’s people have

to have, and all of these cable companies need to have—competition. And that is why they do not like us. That is why we have

been castigated and vilified and so on, because we also present

competition.

Mr. Congressman, we are not gouging anybody, and we are not

reluctant to show you numbers. I will be delighted to show you

numbers. Maybe not here, that is, openly. There may be some concern on the part of these gentlemen that should not be an open

matter. But I would be delighted to sit with the chairman and

members of the committee and show you exactly where we are

coming from them. But I will also show you what their numbers

are. We have nothing to hide, and we do not deal in statements

that simply are untrue, inaccurate, and deceptive.

Mr. Cohen’s position, while well articulated, is a false one, just

like his litigation is a false one.

Chairman TOM DAVIS. Thank you. It looks like when we have

that meeting, Mr. Angelos, with you and Mr. Cohen, we are going

to need Major League Baseball there. [Laughter.]

Mr. Ruppersberger.

Mr. RUPPERSBERGER. First, I do think this hearing has been

helpful because we are getting a lot of the facts out on the table.

I know that we cannot agree with the other person’s positions, but

maybe we can find a way to move forward somehow. I think from

what I am hearing now, we need a short-term solution and longterm solution.

The first thing, Mr. Cohen, I would like to address your argument about Major League Baseball and a bad deal for the Nats,

and I might agree with you. But on the other side is that the Baltimore Orioles gave up a lot. They gave up 25 percent of their market, and that is going to be a financial loss. When Mr. Angelos or

any owner buys a team, they are going to buy the team, and they

enter into a contract, and they have a certain market, and that is

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something of value. And there is no good businessman who has the

money to buy any team, I am sure, that is going to try to go in

and have a losing proposition.

I would agree with you, though, that I think if anybody is going

to help move this on, it might be Major League Baseball. Whatever

Major League Baseball and Mr. Angelos did, Mr. Angelos, I am

sure, has a contract or understanding, and he is not going to give

that up because he needs to generate money to compete with the

Yankees and to compete with Boston and those other teams.

Now, Major League Baseball also has an obligation to the Nationals, too, and they don’t want the Nationals to fail. And neither

do the gentlemen sitting to my right or left want the Nationals to

fail either. So it is up to Major League Baseball on a long-term solution to look and analyze.

But I can guarantee you, knowing Mr. Angelos’ ability to be a

good negotiator, he is not going to give up what he already has in

his pocket to help his team.

So I think that argument, even though it might be a good argument, I don’t think that argument is going to go anywhere. So

where do we go from here?

The first thing, Comcast, as I said in my opening statement, is

a very good corporate entity within at least the jurisdiction that I

represent, and I think a lot of your reputation is because you have

put back in. And most of those corporations that do well put back

into the community. And I think you really have to look long term

whether or not, you know, this position that you are taking, that

you are saying to save the Nats or whatever, is going to affect you

and also your reputation. How much is that worth?

But, on the other hand, as a good businessman, you have to look

at the margins. You have to look at the long term.

Now, you know, we are talking about where to go on the long

term or whatever. I would think right now, my recommendation is

that somehow you move forward and try to resolve a short-term situation. Now, I know long term you have to wait for the lawsuits

and see where they are going to go. That might make a decision

where a lawsuit goes. I know there are other issues about what is

MASN and where we are, and I am sure it is an issue with you.

What is going to happen when the Orioles contract expires? And

I hope as an Oriole fan you work it out before we get to that level

again.

But I do think—and I think that Major League Baseball has to

step up a lot more, maybe, about where we are going, but they are

not going to be able to do that until you have an owner. And I

think once you have an owner, you have an advocate, and a lot of

the things might be able to move forward. But, you know, how

much you pay for advertising, how much you pay for public relations, all that could go away if you irritate the average person, who

really does not care about anything we are talking about here

today other than having their team on TV. That is bottom line.

Now, let me ask you, Mr. Dupuy, as far as where you think—

you have heard what I just said. Where do you think you can be

to move this or do you have recommendations on what to do from

a short-term perspective and then from a long-term perspective?

Because if the Nats cannot generate revenue enough to be competiVerDate 11-MAY-2000 09:56 Aug 17, 2006 Jkt 000000 PO 00000 Frm 00193 Fmt 6633 Sfmt 6633 D:\DOCS\28227.TXT HGOVREF1 PsN: HGOVREF1
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tive, that does not help you either. And, again, if that is the case,

I mean everything has a price. Maybe you have to look at how you

can compensate Mr. Angelos, and I want him to be compensated

because I want the Orioles to be competitive.

Mr. DUPUY. Congressman, addressing several of your comments

in a single answer, despite the disclaimer that there was no attempt to ascribe blame today, I keep hearing the phrase, you know,

‘‘original sin,’’ that we committed the original sin. Well, we don’t

think we committed a sin, and what we did certainly wasn’t original, because there are lot of models for it around the country, including several that Comcast is involved in individually.

I think the short-term solution is there needs to be a commercial

resolution. This is a commercial dispute. There needs to be a commercial resolution between MASN and Comcast as to what a fair

rate is for this year’s coverage with regard to the coverage of the

team. MASN has been able to reach that resolution with at least

five other carriers. They ought to be able to reach a resolution with

Comcast over the broadcast of the games this year until, as you

mentioned, the various claims and litigations are either compromised or are determined.

In terms of a long-term solution, that is what we believe we did,

and what we believe we did is something that is both pro-fan and

pro-competition. In the sense of being pro-fan, we expanded the territory. We allowed all of the fans in the entire territory to be fans

of both the Orioles and the Nationals. We allowed fans to choose

based on the performance of the teams on the field, based on stars,

based on allegiances, based on presentation of the product on the

field. We did not split it up. We said fans could be fans of the entire area. We tried to deal with the compensation of the Orioles for

the losses——

Mr. RUPPERSBERGER. But how do you deal with Mr. Cohen’s argument that you have as a result of this arrangement you have

with the Orioles, that it is not a monopoly? How do you deal with

the issue of a fair competitive price? Because you are part owner

of MASN, too.

Mr. DUPUY. The Nationals are part owners of MASN, just as the

Cubs and the White Sox and Comcast are part owners of the joint

venture in Chicago that we modeled this after. This is a joint venture. It is a joint business venture.

Mr. RUPPERSBERGER. We know that Comcast has the Flyers and

the 1976ers, and they don’t allow anybody to come in on their side.

So it is a different story here. But I do not really—I am not concerned about their rights and the fact that they need to be a competitive company. It is just about what is fair and reasonable.

You know, whether we like it or not, electricity, telephone, and

sports, believe it or not, seem to be quasi-governmental, even

though they are not. And we know you have to make a profit. But

when it comes to this type of thing, people are not—this is not

going to go away. And I think you have to step up more than anybody and get these games on in the short term and then start

working it through when you get another owner. That is the

only——

Mr. DUPUY. Again, we are happy to do whatever we can——

191

Mr. RUPPERSBERGER. I see my red light is on. It goes so quickly.

I do want to say this, though. I think everybody at the table needs

to understand this. The airwaves are not privately owned, and they

belong to the public. And we need to understand that. These airwaves are making a lot of people a lot of money, but they do belong

to the public. And we do not want Congress or the FCC to have

to get in, which could hurt everybody. I believe that we need free

enterprise to move forward, let the market share move where it is,

negotiate based on the market share. But if it goes too far and you

irritate fans and it looks like people feel, even though it might be

the case, that you are being gouged or whatever, then that is when

we step in because we represent the people.

So let’s get it together because we do not want to get to that next

level.

Chairman TOM DAVIS. Mr. Moran.

Mr. MORAN. Thank you, Chairman Davis, and just a segue from

what Dutch says, you know, it does fall on us to represent the fans,

because it is the fans that are really getting the short end of the

stick here.

Let me first ask Mr. Dupuy with regard to Major League Baseball’s role. You make a deal that gives 90 percent of the broadcasting rights to the owner of a competitive team, the Orioles.

Mr. DUPUY. No, sir. We gave 90 percent, beginning 90 percent of

the control of the corporation, 90 percent of the profits of the corporation, not 90 percent of the rights. The rights were given to a

joint venture.

Mr. MORAN. All right.

Mr. DUPUY. This is a joint venture.

Mr. MORAN. All right. Then let me rephrase it. You give 90 percent of the profits for broadcasting rights from the Nationals to the

owner of a competitive team.

Mr. DUPUY. Only after first ensuring that the Nationals would

receive, unlike any other team in baseball—there is no other team

in baseball that has a guarantee that they will get a market right

fee for their product.

Mr. MORAN. But, Mr. Dupuy, isn’t it correct that the two principal sources of revenue for a baseball team are the real estate that

it owns and the revenue generated from that and the broadcasting

rights, that the broadcasting rights are essential to the revenue

that a baseball team owner receives?

Mr. DUPUY. Precisely so. Ticket sales and broadcast rights are

the two economic drivers.

Mr. MORAN. And yet the deal that you make gives the new owners of the Nationals 10 percent of the revenue from television,

which means that they are not going to be able to compete in terms

of buying the best players, fielding a competitive team. Now——

Mr. DUPUY. With all due respect, sir, quite the opposite. The

Washington Nationals do not have the wherewithal, do not have

the product to set up a competing RSN to Comcast. A single team

in this market would have had difficulty setting up an RSN.

What the Nationals have done is combined and formed with the

Orioles, given the critical mass to be able to form a competing

RSN. They are getting a full rights fee, but they are also getting

a plus. They are getting 10 percent of an entity and eventually 33

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percent of an entity they never would have had but for the negotiations.

Mr. MORAN. Baltimore is the 23rd market. Washington is the 8th

market. The income level in Washington is twice what it is in Baltimore, and there are twice as many TV sets in the Washington

area, immediate Washington area, as in the Baltimore area. And

yet it seems to us that you have set up a situation where the revenue that would normally go to the team owner, grant you at some

point, is constricted, limited to only 10 percent, 33 percent in the

future, but Mr. Angelos has into perpetuity——

Mr. DUPUY. No, I——

Mr. MORAN [continuing]. A control over the revenue that is coming from the network that he owns.

Mr. DUPUY. Again, sir, I would disagree. Just as in Chicago the

White Sox have a certain percentage, the Cubs have a certain percentage, the Bulls have a certain percentage, the Black Hawks

have a certain percentage, Comcast has a certain percentage, so too

here the Nationals have a certain percentage of an upside that was

created by this joint venture. They are getting a full market rate

for their rights, and we have created value rather than diminishing

value in my opinion.

Mr. MORAN. I just cannot understand how you can say that, for

the team owner—any team owner in their right mind who is a

businessman is going to have to buy from Mr. Angelos the right to

get more than 10 percent or even 33 percent of the revenue that

is generated by this television market.

Now, Mr. Angelos wants to say something, and you can address

that, Mr. Angelos. But let me also ask you, because it seems to me

there is another factor here in terms of the revenue that will offset

the cost that Mr. McCollum and Mr. Cohen’s network are going to

have to bear, and that is advertising.

Now, if you let them advertise and they get a fair share of the

advertising revenue, then that covers, that could cover their costs.

Certainly it covers part of their costs. But, on the other hand, if

you say, well, you can get a share of the advertising revenue when

we present the International Dog Show at midnight, but you cannot get the revenue from the baseball game, that is a different situation. And that is a factor that we need to understand because it

seems to me there are ways that you can compensate, enable Cox

and Comcast to get back their revenue—excuse me, get revenue to

cover that extra expense that you are charging them per subscriber

if you let them have a fair share of advertising revenue.

Now, how have you structured that, Mr. Angelos, if you would

not mind telling us?

Mr. ANGELOS. The division of the advertising revenues between

an RSN and a distributor such as Cox is on a 75/25 percent break:

25 percent goes to the entity like Cox, and the rest goes to the

RSN.

Mr. MORAN. Well, and that is of all the advertising?

Mr. ANGELOS. What is that?

Mr. MORAN. They cannot distinguish between—in other words,

all the advertising that is on the games, that is on the dog shows,

that is on everything, you split it the same?

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Mr. ANGELOS. Congressman, we did not originate this approach,

neither with respect to the rates nor the division of the advertising

revenues. That is a standard arrangement in the particular business we are discussing, which is a regional sports network. We

have not innovated anything. We have followed the system which

has been developed over the years, and that is the arrangement.

Mr. MORAN. OK. If you were to buy the Nationals, would you not

see it as essential in your interest to try to acquire the broadcasting rights for the Nationals so that revenue would be going to the

benefit of the Nationals team and not primarily going to the benefit

of the owner of the Orioles team?

Mr. ANGELOS. Congressman, let me try to answer the other question as well as this one that you asked before. Let me point out

that the territory that we are discussing, which I enumerated earlier, running from Lancaster all the way through central Pennsylvania, in Maryland, in D.C., in Virginia, and so on, that has

been——

Mr. MORAN. Chairman Davis covered that.

Mr. ANGELOS. That has been, sir, the Oriole home television and

cable territory for 30 years, and every team in Major League Baseball has a territory like that, similar to that.

Mr. MORAN. No, no. There is not another situation where you

have as large a metropolitan area as Washington that has been

shut out from baseball for 30 years, and much of the reason they

have been shut out is because you have worked with the other

baseball club owners to shut them out.

We have been at your mercy because you had a financial interest

in Washington not having a team, Mr. Angelos.

Mr. ANGELOS. May I respond? Let me say that in 1993, when we

purchased the Oriole team out of bankruptcy, we paid $173 million

for that team—if you would let me finish, please—and we also assumed certain obligations that were outstanding. At that time, the

Oriole home television territory was essentially as I have described

it here today.

The purchase of that team, along with that territory, the home

territory of the Orioles, was one of the reasons we made that kind

of an investment, and at that time what we paid was the highest

number ever paid for a ball club in the history of Major League

Baseball.

Mr. MORAN. I understand the history, but I also understand the

history of the last 30 years. The last thing I want to say is I have

to conclude, Mr. Cohen, that the fact that there is a lawsuit pending, which if it prevailed on your side would substantially weaken

the leverage that MASN has, Mr. Davis suggested it, and you poohpoohed it, but I have to believe that you have a substantial vested

financial interest in not showing games until this lawsuit is concluded because you think that you are going to prevail, and if you

are able to maintain that contract, then, of course, you are not

going to have to pay anywhere near as much to MASN as you

would have to today, and as Mr. McCollum has had to.

So I do think that Comcast has culpability here, to be honest

with you, and I think it is you that is going to have to yield.

Chairman TOM DAVIS. Thank you.

Ms. Norton.

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Ms. NORTON. Thank you, Mr. Chairman. I am going to start with

Mr. Dupuy. You have gotten off pretty easy here. But if you happen

to represent the District of Columbia, when I look at you, sir, the

first thing I think of is $611 million that this city paid for a stadium, the price of bringing baseball back to Washington. And, of

course, this city is the core of the region and doing very well, but

it pales beside the wealth of the rest of the region. And yet who

put the $611 million on the table was the District of Columbia.

I am sure you watched very carefully the council to see whether

it would get through those proceedings, because for you that meant

$450 million. We put $611 million. You immediately have a team

that could go for—at least it is estimated as much as $450 million.

We have not seen much of you in this dispute. You have not played

any of the roles that one might expect Major League Baseball to

play, largely because it is unarguable, it seems to me, that the

present deal does take resources away from the Nationals in particular and will have a negative effect upon their ability to compete.

But, you see, I know Mr. Angelos, and I understand that the

delay in bringing baseball to Washington had to do with the fact—

and he has laid it out very clearly. Here was coming a team very

close to his team, so he was in a position to drive a very hard bargain, and of all the bargainers I know, you all aren’t nearly as good

as Mr. Angelos, even though everybody in the District gives you a

lot of credit for the kind of bargain you drove against the taxpayers

of the District of Columbia. We were not match for Mr. Angelos,

and he came out with something that he believes will at least not

prejudice him in the long run.

Members here have raised all kinds of Federal interests that are

on the table—airwaves interests, the monopoly and antitrust exemption that has favored you. One way, of course—the thing that

stands out, though, is that in this dispute there is nobody to speak

for the Nationals. So, you know, obviously Mr. Angelos is going to

speak for the Orioles. You, of course, have money on Mr. Angelos.

I am not criticizing that. I understand business deals.

Meanwhile, here are the Nationals, playing baseball every day,

and not at the table during a dispute that means real dollars for

them. In any fair dispute, at least they would be at the table.

Maybe they are no match for Mr. Angelos, but he has a situation

where he is bargaining with himself because you will not even bargain for him, and I can understand that. And when you were asked

by the chairman when are you going to name an owner for the

team, you came out with a month, a true insult given the nature

of this dispute.

Sir, I must ask you to detail where you are, what discussions

have taken place, and to give us a date so that we can have somebody at this table. We have paid for this team. We deserve to have

a voice and to have somebody who can speak for us. We are used

to not having anybody who can speak for us on the floor of the

House and Senate. I will be darned if when you give this kind of

money to build a stadium you do not deserve more than vague notions anytime soon, maybe in a couple of weeks. I am asking you

to be far more specific than that out of fairness to the people I represent.

195

Mr. DUPUY. Thank you, Representative Norton. A couple of comments.

First, I believe that the deal that was negotiated with the city,

the City Council, the mayor, the sports commission, that because

of the unique circumstances of D.C. government, was renegotiated

four or five times during the course of a year and a half, is a fair

deal.

Ms. NORTON. I bet you do.

Mr. DUPUY. And with regard to the $611 million, over 70 percent

of that will be paid for by the team through rent payments,

through ticket taxes that would not otherwise exist, and we believe

will spur development of the entire Anacostia Basin to the benefit

of all of the D.C. residents and the city of D.C. We are proud to

be here. We think the deal was fair, and we believe that the team

and the city were very well represented by the mayor, by the sports

commission, and by——

Ms. NORTON. Now will you answer my question?

Mr. DUPUY. And in response to your question, that decision will

be made by the commissioner. Until last week, Representative Norton, we did not have an asset to sell. We did not have a lease. We

did not have——

Ms. NORTON. What do you mean by that?

Mr. DUPUY. We did not have a document. We did not have anything to give to a new owner. We had promises. We had, ‘‘Oh, yes,

we can do that.’’ But last week, for the first time all the documents

were signed.

As you recall, because I did participate and watched the hearings, as you did, this has gone on for some time now. There have

been protracted hearings. There have been protracted changes.

There have been renegotiations. Major League Baseball itself for

the first time ever is putting up $20 million. Now, $20 million may

not be a lot of money, but $20 million is the first time we have ever

contributed to a stadium——

Ms. NORTON. Now that a deal——

Mr. DUPUY [continuing]. And we did that trying to bridge the

gap.

Ms. NORTON. Now that you have a lease—and that is, of course—

you are arguing you could not have named an owner without a

lease. Now that you have a lease, now would you answer my question?

Mr. DUPUY. Yes, and we have assembled all the documents in

New York, all the new documents, the new lease, the MOU, the

groups have come in this week. I believe we had five groups in New

York this week. As I mentioned, I spent the last week, apart from

getting prepared for this hearing, meeting with the various groups.

And as I also indicated, this is the commissioner’s decision. He has

indicated he will make this decision within a couple of weeks. I

tried to be as specific as I could.

Ms. NORTON. So within a couple of weeks you expect——

Mr. DUPUY. That is what the commissioner has indicated, yes,

ma’am.

Ms. NORTON. We cannot expect—I never expected Major League

Baseball, given the incestuous relationship they have with this

deal, given the fact that, frankly, Major League Baseball represents

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all of the teams, to be a legitimate third party to help resolve this

matter. And I am trying to find how it is going to be resolved.

Mr. Cohen, you know the respect I have for you because of your

Philadelphia experience. Sir, are you a lawyer?

Mr. COHEN. I am.

Ms. NORTON. In that case, I am truly astonished by what you

had to say about how the matter should be resolved because—and

here I am reading from your own testimony. The way you think it

ought to be resolved, as I see it, is to nullify the agreement that

has been made. This is an agreement which I agree is unfair, and

I must tell you, I have to sit through a lot of unfairness in the

House of Representatives that I can do nothing about. And unfair

contracts, when you and I went to law school, we were taught as

long as the parties were free and 21, is something in which the law

cannot intervene. Wish it could. But there is a reason for that in

a market system.

You said that Mr. Angelos should return control of the Nationals

television rights to the Nationals, their rightful owner. Then MASN

can bid on those rights. You can bid on the rights. He deserves

compensation. Let them pay directly, Major League Baseball.

Now, it is hard for me to regard that as anything but a negotiating position. Do you agree that is what it is and that you would

have to move from there if you were sitting down with any party

in order to try to resolve this dispute?

Mr. COHEN. Congresswoman, two things. First of all, I am a good

enough lawyer to know that I was not asking for a court or this

Congress or anyone independent——

Ms. NORTON. So if a court—you expect them to do it willfully?

Mr. COHEN. That is exactly correct.

Ms. NORTON. Why? Why is it in their interest to——

Mr. COHEN. Because—and let me be clear. Notwithstanding Mr.

Angelos’ comments, I have tried very hard not to castigate him because I don’t think Mr. Angelos is taking an unreasonable position

in seeking to make the best deal that he can on behalf of his team.

Ms. NORTON. You understand I looked at this—you know, I tried

to take away my bias in favor of my own jurisdiction. I looked at

what Mr. Angelos did when you all filed suit, and your original

complaint, as I read it, said you deserve first rights, and you didn’t

get it.

Mr. COHEN. That’s on the Orioles, not the Nationals.

Ms. NORTON. And, you know, the clear answer is, yeah, I deserve

first rights, but obviously somebody can do it himself if he has the

rights. So one goes into court on that kind of theory, and one wonders why is this a legal dispute and does anyone expect the matter

to be resolved in this way? And if not, then what is it that you—

how do you expect a resolution to come by?

Mr. COHEN. Congresswoman, this is a different issue.

The legal dispute around the Orioles’ rights relates precisely to

whether Mr. Angelos and the Orioles in fact did do this themselves.

You’ve heard, in response to Congressman Moran’s question, Mr.

Dupuy’s testimony that in fact this was not the Orioles doing this

themselves, this was a joint venture. It was a third party that

gained control of these rights, different from the Orioles, and you

197

can’t have it both ways. Either it’s fair to the Nationals or it’s not

fair to the Nationals.

Ms. NORTON. And the third party?

Mr. COHEN. Is this new joint venture between Major League

Baseball/Nationals and the Baltimore Orioles. But this is a matter

of——

Ms. NORTON. That was done pursuant to a legal contract.

Mr. COHEN. That is—well——

Ms. NORTON. Legal negotiations.

Mr. COHEN. Well, an illegal legal contract in our view, OK?

Ms. NORTON. I really don’t want to——

Mr. COHEN. I think that’s it. But let me answer. The question

you asked is we are asking Major League Baseball and the Orioles

to do the right thing for the Nationals and their fans, and to figure

out a different way to compensate or to give the Orioles whatever

compensation they’re due, and not use as a mechanism to do that,

the wallets of cable customers and your constituents. That’s what

our request is.

Ms. NORTON. I understand that is how anybody would begin negotiations. I don’t understand that somebody like you in Philadelphia, who worked all kinds of deals in the public sector would regard that as the way to move——

Mr. COHEN. And I——

Ms. NORTON. Maybe that isn’t your job. Maybe your job is to put

that on the table——

Mr. COHEN. But I can say, Congressman, I’ve also sat here today,

and I want to repeat, our—we are willing to talk and to discuss

and to be flexible in this entire area. We have in front of us though

the interest of the Nationals, their fans and our customers. That

is really what we’re trying to focus on.

Ms. NORTON. Let me continue if I just might, because I want to—

precisely because I thought at least Mr. Cohen’s reputation as

being a problem solver, I want to see what can happen here. So I

looked, I asked my staff to find out about your own behavior in

your home jurisdiction, and as you know, that is Philadelphia. And

I was really quite astonished to learn that in Philadelphia, for example—this is among other jurisdictions—where you own the

rights to the Flyers, the Philadelphia Flyers and the Philadelphia

76ers, you have refused to allow other cable providers to televise

the games.

Mr. COHEN. That’s not true.

Ms. NORTON. And that the opposite is here because we have kind

of a turning-it-on-its-head situation here. That is not true now?

Mr. COHEN. Congresswoman, that is not true. In Philadelphia—

and Comcast SportsNet is a unique regional sports net in the country—but Comcast SportsNet is made available to all cable providers in the market, to all over-builders in the market, including

RCN. The only entity that we do not make Comcast SportsNet

available to are the DBS providers, DirecTV and EchoStar, and

that is pursuant to terrestrial exemption in the Federal Telecommunications Act, which was designed to encourage investments

in existing terrestrial networks, which is what Comcast SportsNet

was when we purchased it, but it is a regional sports net that is

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available to all cable providers in the market, including competitive

cable providers to Comcast.

Ms. NORTON. In your own testimony, when we got past what

they ought to do, which is to tear up their contract, you said in

your own testimony that independent analysts reported last week,

believe that MASN is, ‘‘asking too much for carrying the network.’’

So basically what we are talking about is a necessity for some kind

of negotiation over price. Is that not right, sir?

Mr. COHEN. I think that is part of the issue, Congresswoman, but

I’ve identified a whole series of issues that we have with this network, of which price is only one factor.

Ms. NORTON. What is the other one?

Mr. COHEN. The other factors——

Ms. NORTON. You are in business here, what is the other one?

Mr. COHEN. The other facts that I’ve identified is protection of

our customers, and to make sure that we deliver the highest quality service to them at the best price. Price, quality, the extent of

programming and the quality of programming, and the fact that

his network, we believe, has fundamentally been spawned by a violation of our contractual rights. And last, our interest in standing

up and protecting the interests of the Nationals and their fans, and

keeping the spotlight focused on the structure of this deal. Those

are the five items I’ve identified over the course of this hearing.

Ms. NORTON. Well, Thank you very much, Mr. Cohen, but unless

I am hearing you wrong, it still all comes down to cost and price.

Anyway, I understand how you are framing the issue. Allow us to

frame it, given the amount of money we put on the table as we do.

Mr. Angelos, you have already been beaten up a lot in the region,

and I don’t want to flog you any further. You know how I must feel

about this. Let me ask you though about this new MASN, because

you said that it was going to be 24/7 this year, so I would like you

to elaborate on that. How are you going to maintain a profitable

regional sports network and competition with another that has

such a head start, going 24/7, and what conceivable programming,

if you are going to do it as soon as July, do you have in mind?

Mr. ANGELOS. We will have a full range of what is referred to

in the industry as shoulder programming, which includes college

football and college basketball, ESPN programming. Potentially we

will also have Fox programming. We’re interested in putting together 24/7 operation with the two baseball teams, which includes

all of the kinds of sports programs, sports news, sports magazine,

that fans want to watch on a regular basis. So basically, we’re in

the process of doing that. We’ve only been in operation for a little

bit better than a year. We need another few months and we will

have all of that put together, and we’ll be glad to report that to you

personally if you would like, as to our progress.

Ms. NORTON. Mr. Angelos, you, and perhaps Mr. Dupuy, could

answer this question, if you could answer this for us. You’ve done

your own network, I understand that. I understand the reasons. I

understand the initiative. I understand the negotiating position it

puts you in. All things being considered, if you could strike a deal

with an already-established network, that you think would satisfy

your interests, as opposed to having your own startup network,

would that not be preferable?

199

Mr. ANGELOS. I think we——

Ms. NORTON. If you could get a deal now. I am not——

Mr. ANGELOS. Congresswoman, with all due respect, I think

we’ve made our decisions, we have joined in a contract with MLB,

which eventually will be the contract of the Nationals directly, and

we intend to see that contract is enforced.

The proposal that has come from Comcast for purposes of preserving its monopoly, we absolutely find to be, one, if you want to

speak of illegalities, grossly illegal and improper, because what the

solution is that is being offered by Comcast is that Major League

Baseball should breach its agreement with us, and we in turn

would then have to breach our agreement with the five distributors

that we have executed contacts with, including Cox, for periods of

7 years. They have signed for 7 years to put the MASN games, the

two baseball teams in 2007, and the full 24/7 that I described to

you just a moment ago.

So we offer, and we will deliver to the Nationals, not just a rights

fee that is market rate and increasing almost annually, but we also

will produce for them an ownership interest. They’re going to own

part of this RSN.

Ms. NORTON. Mr. Angelos, I don’t know if you are telling me that

you are in so deep that—we have just heard now that Comcast is

willing to sit down, whatever that means. And then, of course, you

have justified the position you have and you think it ultimately is

a position that will be profitable. Does that eliminate the possibility of sitting down with Comcast?

Mr. ANGELOS. Yes, ma’am. We would be delighted to sit down

with Comcast at their earliest opportunity. We didn’t hear from

them for a year, but Mr. Cohen is correct, they called a couple of

days ago and indicated that maybe they’ll have a meeting with us.

We’re delighted to hear that. We’re prepared to meet with them.

Ms. NORTON. That is progress, Mr. Angelos.

Mr. Dupuy, I only have a couple more questions.

Chairman TOM DAVIS. Ms. Norton, Mr. Cohen only has just a

couple more minutes to check with his staff——

Ms. NORTON. I have no more questions for Mr. Cohen, but I do

have two more questions. They are very short, Mr. Chairman.

I have heard the whole region that didn’t pay a dime for this

team usurp all the time, and I got two more——

Chairman TOM DAVIS. Well, why don’t we get questions for Mr.

Cohen so that he can make his train, which he had promised him.

Mr. ANGELOS. May I finish my sentence, please?

Ms. NORTON. Yes, but then we will go to Mr. Cohen.

Mr. ANGELOS. Let me say we’re delighted to meet with Comcast

at their convenience wherever they designated. We’re prepared to

put the games on Comcast for the same rate that Cox is paying

and Verizon is paying and so on.

Ms. NORTON. OK. We have heard your negotiations issue.

Mr. ANGELOS. No, wait. Well, let me finish——

Ms. NORTON. We have heard Mr. Cohen’s——

Mr. ANGELOS. May I finish? Please, Ms. Congresswoman. In addition, we’re prepared to talk about a potential amalgamation of

the two systems under the appropriate arrangements, and that

may be a long and difficult negotiation, but I think we can get

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there, assuming there’s good faith on the side of Comcast. We are

interested in doing that. We are prepared to work at it diligently

and come back and report to your committee our progress with the

chairman, who obviously can disseminate the information to the

members of the panel.

We think that the two ought to be put together. We will work

toward that, but let them put the games on now.

Chairman TOM DAVIS. That was a good question, Ms. Norton.

Let me just ask Mr. Cohen, could you respond? I mean when we

talk about an amalgamation of the two systems and getting the

games on, while you talk about, are we at least in the same room?

You don’t close the door on that?

Mr. COHEN. I don’t close the door on talking about anything. I

think I’ve said that before, and I think I’ll just stop there.

Chairman TOM DAVIS. But an amalgamation of the two, I think

that is as good as you are going to do under any circumstance at

this point.

Mr. COHEN. Look, I don’t know whether that’s true or not, but

again, as Mr. Angelos said and as I’ve said, we have never said

that we are not willing to talk about anything. We have always

said that we are flexible and the door is open to talk.

Chairman TOM DAVIS. Well, let me ask you this, if you don’t

have Orioles games—I don’t know how these lawsuits turn out—

but worse case, if you don’t have the Orioles next summer and you

don’t have the Nats next summer on your SportsNet, what are you

going to show?

Mr. COHEN. Well, I think, I mean again——

Chairman TOM DAVIS. Australian football?

Mr. COHEN. Well, it’s a question of what we show in the summer.

We’ll obviously show the Capitals and the Wizards——

Chairman TOM DAVIS. Until they come up for bid again as well.

I mean——

Mr. COHEN. Right. But, of course, it’s interesting. They will come

up and have to be bid upon in the market.

Chairman TOM DAVIS. Right, exactly.

Mr. COHEN. The way this is always done except for this one

channel. And we’re OK living under that world. I mean that’s the

way in which we live.

Chairman TOM DAVIS. Sure.

Mr. COHEN. But we will fill in our programming with other regional sports programming the same way in which we do in our

other regional SportsNets around the country.

Chairman TOM DAVIS. I mean, let me just say this. I think there

are other market opportunities. I mean, George Mason basketball

is hot right now. I mean Mr. Moran and I just came out, thousands

of the people lined the streets there. Somebody can put that on

while you have the Capitals and the Wizards. I am not sure that

two regional sports networks couldn’t make a bigger market that

could be shared on this.

I guess what I want to ask, and I want to be respectful of your

time, Mr. Cohen—you have stayed, generously, far more than anticipated.

Mr. COHEN. And I appreciate the courtesy.

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Chairman TOM DAVIS. Mr. Dupuy, would you try to oversee this

in the next couple weeks as these parties get together? We will be

happy to help any way we can. I don’t want to—this is not a

threat—but underscoring everything here is the fact that from a

congressional perception, we are dealing with big giants here that

enjoy a lot of benefits. We have a telecommunications bill going

through. It is not a good reflection on the industry to have everybody fighting over dollars when nobody is losing money and the

fans are suffering. And I wonder if everybody can give a little bit,

and with Major League Baseball supervision in this, if we might

be able, over the next couple weeks, to come back and give us a

progress report.

Mr. Angelos has indicated his willingness to do that. Mr. Dupuy

has said they will be willing to oversee it. Will you be willing to

participate and see—I am talking about in good faith, sit down.

And if you cut a better deal than Mr. McCollum, he benefits and

my rates in Fairfax will benefit, so that could be a win-win. But

be willing to give that a try?

Mr. COHEN. As I said, we have been a party that has always said

we are wiling to talk. I don’t want to walk away from any of the

principles that I set forth before this committee because we firmly

believe——

Chairman TOM DAVIS. We understand. Look, we understand

everybody’s position.

Mr. COHEN [continuing]. That they are important principles.

Chairman TOM DAVIS. Mrs. Norton’s been through it. We understand the principles.

Any more questions for Mr. Cohen, because he has to leave? Yes,

Mr.——

Mr. VAN HOLLEN. Thank you, Mr. Chairman.

Let me just underscore the suggestion of the chairman with respect to getting together, and a progress report. That would be

helpful.

Look, we all want to make sure the fans can see the games, and

as someone who represents a lot of viewers who watch Comcast

and other providers in the region, I also want to make sure, as Mr.

Cohen said, we want to make sure that we protect the wallets of

able customers and our constituents.

So my view is, we want to see the maximum number of games,

and we want to make sure that our viewers pay the least cost necessary. There are lots of people who also watch Comcast who don’t

watch these games, and I want to make sure they don’t see a price

hike.

Mr. Cohen, I have to understand. You say you are going to pay

more, put it up for bid, and Comcast, I assume by what you are

saying, Comcast is going to pay more for these rights. Can you tell

me today, can you guarantee me today that my constituents, your

consumers, are going to be paying less if you are successful in

outbidding MASN or whoever it was if those—they are going to be

paying less to watch these games than they are if they took the

deal that MASN has on the table? Can you guarantee me that?

And if so, why?

Mr. COHEN. I will give you the same answer that I gave—I think

that was the first question you asked me, which is, that the history

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and the practice around the country is that customers pay less for

regional SportsNet programming I market where there are less

than—where there is one regional SportsNet. That is what I can

tell you.

Mr. VAN HOLLEN. If I could, Mr. Chairman, if you could provide

the committee and everybody else who is represented here with

any other—that is information that would be very helpful for me

just in understanding the impact of this. So if you would be willing,

and anybody else at the table, to present that information, I would

appreciate it.

Mr. COHEN. I’m not sure what information I can provide other

than the—I mean, again, all these agreements are subject to strict

confidentiality provisions. I think there may actually have been articles written about this, and so by economists, and so I will—we

will look and we will see what we can provide to amplify that for

the committee.

Mr. VAN HOLLEN. If I could, because this price is an issue. We

have talked about when we met, and you mentioned, actually in

your testimony, the recent deal you got with the New York Mets.

And I assume that there are other providers like the ones we have

mentioned at the table that also want to air those shows. Can you

give me some sense of how the price you are charging those other

providers for the rights to air the Mets games compared to the

price that Mr. Angelos has on the table?

Mr. COHEN. The answer is I don’t even know the answer to that

question. I don’t know what it is that I can say. I’ve given—even

though Mr. Angelos didn’t agree with my testimony, I will tell you

that—and this does not breach any of our confidentiality agreements—that the price that MASN is seeking to charge as a twoteam regional sports network is a higher price than the price we

are paying for the 10 other two-sport regional sport networks in

the country. That is a fact.

Chairman TOM DAVIS. Mr. Ruppersberger.

Mr. RUPPERSBERGER. Let me try to really conclude here what I

think is happening. First, do we have a commitment here that parties will meet on this issue today?

Mr. COHEN. A meeting was scheduled—first of all, the parties

have met.

Mr. RUPPERSBERGER. All right. I am talking about——

Mr. COHEN. And I have told you that a meeting was already

scheduled.

Mr. RUPPERSBERGER. Will you commit to a meeting with Mr.

Angelos and with Major League Baseball?

Mr. COHEN. There’s already a meeting scheduled.

Mr. RUPPERSBERGER. OK, that is fine.

Mr. Angelos, you will commit to a meeting with Comcast and

Major League Baseball?

Mr. ANGELOS. I just offered to do that, and I’ve been offering it

for a year, Congressman.

Mr. RUPPERSBERGER. And also, Mr. Dupuy.

This is the way I see it. Second, I would ask, Mr. Chairman, that

maybe Major League Baseball come back to us in maybe 2 or 3

weeks, and they have offered to do that, to report to us.

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I come back and hear everyone has a point of view, and I understand that. I understand what business is about and what margins

are. I understand that you make short-term decisions and longterm decisions, especially, Mr. Cohen, your industry is becoming a

lot more competitive, so you have to look at where you are 10 years

from now, and what decisions that you do make. That is why I

think it is very important—and I am asking Mr. Dupuy to be more

of the arbiter if you can—I think it is important that you come up

with a short-term solution to take care of the Nats right now, and

I think that is extremely important, whatever can be done in that

regard.

Now, I am asking Comcast to give up their long-term legal

issues, leverages they might have. That is why I think it is important for short term. But I would also ask that when you are sitting

there—and if you start the negotiation—because I believe Major

League Baseball has a responsibility. I believe Mr. Angelos has his

rights to negotiate the best deal he did, and he did, and he has a

contract in that regard. Now, I think it is extremely important

though, that you, representing all of Major League Baseball, need

to do what is right for baseball, and I would hope that if you can

start and do something in the short term, that you look down the

road with long term, including the Baltimore Orioles contact of

2007.

Than you.

Chairman TOM DAVIS. Mr. Moran, quickly.

Mr. MORAN. Thanks, Mr. Chairman. I want to tell you, Mr.

Chairman, in addition to appreciating the hearing, I appreciate you

having Mr. Angelos here, because that means I can afford to engage in an adversarial line of questioning without having to worry

that I am going to hurt your feelings or anything. It is nice to have

tough guys on the panel. And not to put you off to—well, whatever.

I do think it should be said that it is clear there is nothing approaching illegality, nor could I see anything unethical in what has

transpired here, and I say that quite honestly. I think Mr. Angelos

has engaged in a business transaction, and if he didn’t own the

Orioles, I would love to see he or some Angelos clone buy the Nationals, because you have built a beautiful stadium, the Orioles are

a terrific team, and we need an owner that is going to go to bat

and going to generate as much revenue and field as good a team

as possible, and you have done that. So there is no problem with

that.

I do have a concern over the development of MASN, and if it becomes, for example, a 24/7 station, you will have the ability to substantially increase rates, as I understand it, and I think that is a

concern that we would have on behalf of our constituents. For example, if you do go 24/7 can’t you substantially increase the rate,

and don’t you have substantially more leverage over both Cox and

Comcast and any of these other providers given your exclusive

broadcasting rights for both Orioles and Nationals games? Is that

true, or is it a supposition that is unwarranted, Mr. Angelos?

Mr. ANGELOS. I think the whole operation will continue to be

under the jurisdiction of Major League Baseball. That is the way

that Mr. Dupuy and MLB have fashioned it. We present the games.

The ultimate control of our approach, the rights fees that we pay,

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the quality of the presentation, and the concern that you just expressed, Congressman, will be carefully taken care of and guarded

by Major League Baseball. We know that. That has been explained

to us, and we intend to abide by those requirements.

Mr. MORAN. I am going to conclude now because we have another

panel, but I have to say we feel vulnerable because we don’t have

an owner. We don’t have a tough guy representing the Nationals,

our team, our woman, or whatever, so we are in a vulnerable position. Major League Baseball owns our club, but, you know, that is

31 other owners, and they have their own vested interests in the

benefits of their club. So I think you can understand where we are

coming from, and it is not meant to be adversarial or accusatory.

It is just we want to get the best deal for——

Mr. ANGELOS. Sure.

Mr. MORAN [continuing]. Our fan base, our constituents.

I appreciate Mr. McCollum doing that with Cox. I hope it works

out, and I really hope, Mr. Cohen, that you can look at the fans

first when you make these subsequent decisions over the next couple of months.

Dutch.

Mr. RUPPERSBERGER. This is not relevant, but chairman made a

comment about how George Mason is a very hot team. I just want

to acknowledge that the University of Maryland Lady Terps are a

very hot team now also. Thank you. [Laughter.]

Chairman TOM DAVIS. I would have said that, Dutch, but I wanted you to be able to make that comment.

Mr. Cohen, you are free to go. I think Ms. Norton has just one

more question for the panel.

Mr. COHEN. I’m happy—I mean I’m fine.

Chairman TOM DAVIS. You missed the train now, so you can take

the next one.

Ms. Norton will sum up, and then we will go to our next panel,

which is also I think going to be a good panel.

Ms. Norton.

Ms. NORTON. One last question. It really goes to resolution, trying to take into account the positions, both of which I regard as

legal positions, as positions you might expect in hard bargaining,

so I am not affronted by the positions as a legal or negotiation matter. I must tell you, I have to step back from my role as a thirdgeneration Washingtonian to be objective about this, but I am trying my best because I would like a resolution.

I note though that this kind of dispute may be somewhat chronic

in Major League Baseball, because, to quote one of baseball’s most

famous philosopher, kind of deja vu all over again here, or if I understand the dispute, the New York dispute when the Yankees created their own network.

I would like to ask Mr. Dupuy, because it sounds literally as

though it was the same thing, and you would think that baseball

would never want that to happen again. How was that dispute resolved?

Mr. DUPUY. It was resolved through ultimately a commercial resolution between the YES Network and Cablevision, just as here we

have MASN and Comcast. Ultimately, the fans were unhappy

enough that they sought alternative methods of distribution. The

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YES Network didn’t get the carriage that it wanted, and ultimately, after a full year of no games, the parties——

Ms. NORTON. Just like this.

Mr. DUPUY. Although last year there were about 70 games over

the year that got carried by Comcast, and this year there’s 32, but

there were no games on Cablevision. Ultimately, the two sides decided it was in their interest to reach a——

Ms. NORTON. Well, they decided with the help of a third party;

is that not true? They just sat down themselves and figured it all

out?

Mr. DUPUY. Lots of third parties attempted to intervene, and

those third parties were told it was a commercial dispute, and ultimately, they resolved it one-on-one as a commercial matter.

Chairman TOM DAVIS. Will the gentlelady yield on that?

I just want to—was compulsory arbitration something everybody

would submit to on this in the fans’ interest?

Mr. DUPUY. I mean——

Mr. COHEN. Compulsory arbitration is not something that we

would be interested in. I mean we have to run our business and

we can’t hand that over to third parties, no more than I would

ask——

Chairman TOM DAVIS. I am just thinking of the fans.

Mr. COHEN. No more than I would ask you, for example, to engage in compulsory arbitration in working out an immigration bill.

I mean this is something——

Chairman TOM DAVIS. That probably would be better than what

we are doing, but that is a different issue. [Laughter.]

Mr. COHEN. I think we have to run our business, and we really

can’t turn it over to a third party.

Chairman TOM DAVIS. Well, if we can just count on everybody to

bargain in good faith.

Ms. NORTON. The chairman is borrowing—yes?

Mr. DUPUY. Representative Norton, I have been corrected. I’m

told—again, it was a few years ago—that the New York Attorney

General did get involved and banged a few heads around, and

that’s ultimately what resulted in the——

Ms. NORTON. Thank you for correcting that.

The chairman was only borrowing a word from baseball. I

wouldn’t use such a word because I’m not as familiar with baseball

as the chairman is, and because I don’t think it’s appropriate here.

The reasons I asked about third party intervention, and was so interested in the fact that the YES dispute was solved that way, is

that one of the subjects I taught when I was a full-time law professor at Georgetown was negotiations, though it was not my——

Chairman TOM DAVIS. There was an arbitration.

Ms. NORTON. Yes. He is saying there was an arbitration panel.

Mr. COHEN. The YES thing, it was a three-judge arbitration

panel.

Ms. NORTON. The chairman has just handed me New York Daily

News report. The decision by a three-man arbitration panel, making YES available to cable subscribers on expanded basis, cost of

$1.93 per subscriber per month.

Mr. COHEN. I think—and Mr. Dupuy can correct me if I’m

wrong—but I believe what happened was that Cablevision and YES

206

reached an agreement for carriage. There was one outstanding

issue which was whether or not Cablevision would be permitted to

carry this on a tier or on expanded basic, and if so, at what rate?

And that issue was submitted to arbitration. So that is the—I

mean that may be the combination of those two, and you may be

looking at the article that reported on the results of the arbitration

which came out many months, maybe even more than a year, after

the carriage agreement was reached between Cablevision and——

Ms. NORTON. Thank you, Mr. Cohen, but I really don’t think it—

since I wasn’t calling for any kind of compulsory—it doesn’t detract

from what I’m trying to find out. As I indicate though, though negotiations wasn’t my black letter law subject, I can’t say that I enjoyed anything more than teaching law students that adversarial

relationship costs money to your client, and that he ought to pay

you a whole lot more for helping to resolve suits without going to

court, if you put a complaint in, you ought to sit down right then—

and that’s one of the reasons, by the way, that major businesses

now very often hire the same lawyers that would have gone into

big law firms as their own counsel in Fortune 500 companies, because they have learned that having a very good lawyer on the inside, rather than farming it out, may be the way to get around litigation costs.

Let me just say what I think has been accomplished here, because for me, this wasn’t an interesting exercise. Without a team,

with a stalemate, and an issue that means hugely much to the District of Columbia in the way that counts the most for the people

sitting at the table, dollars and cents, just let me say what I think

has been accomplished.

At least according to the newspapers and the way the parties described themselves before they came here, Mr. Angelos said that

there had been multiple offers on the table for a year—even repeated that here—with no response. Mr. Cohen says, well, he has

always been willing to talk.

Well, at least we have I think gotten on the record an agreement

that both parties are willing to engage in talks. You don’t have to

call them negotiations. You can call them anything you want to,

but it means representatives face to face. It doesn’t mean these two

head guys in charge. It means whatever you mean, but it certainly

means that is on the record.

Second, in answer to my question to Mr. Angelos about whether

he really would prefer a startup network—after all, he has a right

to say, look, let me get in this business now, let me compete, I am

willing to do the venture capital myself. An answer to that question

is that your preferred course, my understanding—and remember,

there has been somebody taking notes here—is that Mr. Angelos is

willing to go forward on either of two bases, on the present basis

at his own risk, or talking some kind of merger or—and that is perhaps the wrong word—but some kind of deal in which both of

them, both of the parties, MASN and Comcast themselves, have decided jointly on how to proceed.

Given the polarization of the parties as your articulated positions

have been here, you know, both negotiating positions, obviously,

that, on the part of Mr. Cohen, turn up the contract and we can

start all over again. Mr. Angelos, willing to take his chances with

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MASN, no matter where it goes. Could I ask this question. If all

else fails, would you be willing to let somebody else talk with either

of you and ultimately both of you, to see if a decision could be

raised? That would have to be on agreement. Often such efforts

fail. But if all else fails, rather than continue as we have, would

that at least be a possible course? You might do it and say, well,

you all don’t do it any better than we do, or goodbye, but would

that be something you would at least be willing to entertain? Yes,

sir?

Mr. ANGELOS. Congresswoman, as I expressed before, I am willing, we are willing to go anywhere, meet with the Comcast people

at any time and place that is convenient to them. And so the answer to your question is an affirmative and strong yes. But I would

say once again, let’s get the situation calmed down, and as all of

you have said, let’s get the games out there for the Nationals fans

in the interim. If they are willing, truthfully, to try to come to a

resolution, they should be willing to join in that process on the

same basis that I just indicated, and in the meantime, put the

games on. And then all of us can do this in a calm, sensible, and

ultimately fair and equitable basis.

Ms. NORTON. Mr. Angelos, I heard you say yes if all——

Mr. ANGELOS. Right.

Ms. NORTON. That maybe somebody could at least talk to you

both, and I also heard your negotiating positions.

Finally, Mr. Cohen?

Mr. COHEN. I must say I’m not sure I understand the question.

Ms. NORTON. I don’t think it is a very obscure question, sir. I

said——

Mr. COHEN. I don’t think a third party is going to be at all helpful in this process, if that’s the——

Chairman TOM DAVIS. What about Major League Baseball sitting

in?

Mr. COHEN. I think Major League Baseball has to be involved in

this process.

Chairman TOM DAVIS. Could we just ask, Mr. Dupuy, you all sit

down and report, let’s say, by the end of the month give us a status

report if we don’t have something worked out?

Mr. DUPUY. Yes, sir.

Chairman TOM DAVIS. And let’s try to do the best we can. I think

that is what we are all after. I think all of the members here feel

not just strongly for their constituents, but after hearing everything that has gone on, can’t understand—nobody is losing money

here—why we can’t put the fans first. We have some major issues

pending before us that affect some of the industries here. This

shouldn’t be a part of it. We should be able to work something out

there. And if there is anything we can do to help along those lines,

call on us, but we will look forward to a report by the end of the

month.

Mr. ANGELOS. Mr. Chairman, just one more thing.

Chairman TOM DAVIS. Sure.

Mr. ANGELOS. I would appreciate it very much if the Chair would

ask Mr. Cohen whether or not he will agree to put the games on

so that the fans can be satisfied while this process is ongoing?

208

Chairman TOM DAVIS. I think he has already answered that. But

I will ask you. Will you put the games on——

Mr. COHEN. Our offer is to put the games on immediately, as

soon as Major League Baseball and the Orioles do what is right for

the Nationals and for the fans, and return the rights to the fans.

Chairman TOM DAVIS. I just think, look, let’s just sit down in a

room and see if we can get these games on quickly while we are

putting other issues aside. It looks like, unfortunately, this is going

to take some time. We will do anything we can, and if you would

report back to us in 3 weeks, Mr. Dupuy, on how these discussions

are going, we will do anything we can to bring——

Mr. COHEN. Mr. Chairman, one other thought. The Congresswoman raises an interesting issue. There is another party that we

happen to believe would be very helpful to be at the table, and that

is the owner of the Nationals.

Chairman TOM DAVIS. Well, have to wait a couple weeks for that,

but we will start the conversations. Let me just also say, Mr.

Cohen—you have to go—but I hope that folks can monitor this next

panel coming up because we have the local officials where you have

cable franchises, are going to talk about what they need to do.

They also have some things that they can do along this thing if we

can’t get this resolved.

Mr. McCollum, I just want to thank you for putting the Nats

games on in Fairfax, and staying here through this today. You set

a good example.

Mr. MCCOLLUM. Quite welcome, Mr. Chairman.

Chairman TOM DAVIS. Thank you.

We are going to take a 3-minute recess while we bring the next

panel.

[Recess.]

Chairman TOM DAVIS. Thank you all for your patience through

the first panel.

We have a very important and distinguished second panel as

well. We have the Hon. Anthony Williams, the Mayor of the District of Columbia; the Hon. Sean Connaughton, the chairman of the

Prince William County Board of Supervisors. We have the Hon.

Doug Duncan, the Montgomery County executive. We have the

Hon. Peter Franchot, who is a Delegate in the Maryland House of

Delegates, and Mr. Ian Koski, NationalsPride.com, head of the fan

club there.

Would you just rise and raise your right hands and let me swear

you in before you testify?

[Witnesses sworn.]

Chairman TOM DAVIS. Thank you. We are going to start with the

Mayor and move down. I know everybody has time constraints. Mr.

Franchot, you need to get back to Annapolis. We will get your time

to 5, your speech, and get a question maybe. Mr. Franchot, the

Mayor had allowed you to go first. Thank you very much for also

being here.

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STATEMENTS OF PETER V.R. FRANCHOT, DELEGATE, MARYLAND HOUSE OF DELEGATES; ANTHONY WILLIAMS, MAYOR,

DISTRICT OF COLUMBIA; SEAN T. CONNAUGHTON, CHAIRMAN, PRINCE WILLIAM COUNTY BOARD OF SUPERVISORS;

DOUG DUNCAN, MONTGOMERY COUNTY EXECUTIVE; AND

IAN KOSKI, EDITOR, NATIONALSPRIDE.COM STATEMENT OF

PETER V.R. FRANCHOT

Mr. FRANCHOT. In deference to the Mayor and others who want

to speak, I will not read my testimony. It’s beautifully written,

however, if anyone wants to take a quick look at it.

Chairman TOM DAVIS. It is in the record.

Mr. FRANCHOT. Thank you very much. I will just thank you, Mr.

Chairman. As you know, 12 days ago we tried to have a small

press conference on this subject to bring some attention to the matter. Congressman Moran was kind enough to join me, and we

passed the lath test with him. But then when I saw you coming

to join us at the press conference, I was tremendously emboldened

because we had been told at the local level that we had neither the

political clout, nor, frankly, the regulatory clout over Comcast, and

certainly not over Major League Baseball or Mr. Angelos, to get a

result for this. So I’m delighted to see Congressman Cummings and

Congressman Van Hollen, and Congressman Ruppersberger, who

was here earlier, Congresswoman Norton.

I will just say briefly, my two points are that having listened to

the testimony, it is completely unacceptable for our constituents to

be told that we are going to have to wait 2, 3, 4 or more weeks

to get the Nationals games on TV. Last night there was a very exciting game played up in New York. Anybody able to see it? Well,

yes, maybe with the DirecTV or something, Cox. We couldn’t see

it. None of us could see it. None of our kids could see it.

Congresswoman Norton, in your absence I was praising your advocacy on this, and Congressman Moran, I really wanted to thank

you personally for joining with us very early on this issue.

Mr. MORAN. Well, it was your idea, Peter, thanks. [Laughter.]

Good issue.

Mr. FRANCHOT. You know, we’ve come a long way in 12 days, and

I detected a little note of pessimism or frustration in talking to the

major parties, because we’re dealing with large—I don’t want to

say elephants—but three very large entities are locked in combat

before us. And as everyone has so aptly noted from the podium and

from the dais, the fans are getting stepped on underneath as these

large corporate entities are maneuvering for different advantages.

And I would urge this committee not to be pessimistic at all from

the responses that were received today, because we have come so

much farther than we were 12 days ago.

I believe that is you keep the pressure on, and hold Comcast,

particularly, feet to the fire, I think we will get an interim solution

of having these games up on TV, while, as everyone was saying,

the larger legal issues can be negotiated. And I would hope that

the committee would exercise whatever prerogatives it has not to

put this off 2, 3, 4 weeks down the road because we need this resolved now.

Obviously, Comcast has to swallow a bitter pill. They are a good

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tions. Their reputation in Maryland is excellent. It is going to be

damaged by this controversy. It’s only going to get worse as the

season progresses, and I would urge this committee to really hold

their feet to the fire and say, ‘‘For the sake of the public interest,

you’re going to have to, frankly, sign a deal that’s going to, if not

make you as much money, but you’re going to have to deal that to

make a sacrifice.’’

The second issue which was noted by you, Mr. Chairman, and I

missed it because I was a little bit late, is that this issue of ownership has to be resolved. I mean there is no way this team cannot

have a strong advocate in these negotiations, Congresswoman, and

basically in promoting the success of the Nationals. As everyone

said before, I happen to be an Orioles fan. I love baseball. I love

the idea of a regional rivalry between the Orioles and Nationals.

We’re never going to get it if we keep this dilatory practice of a couple of weeks here, couple of weeks there, and not having a new

owner, and particularly, not being able to get this team up on TV.

What I heard today was just more the same. This idea that we’re

going to come back in 3 weeks and tell you how the negotiations

are going, I don’t give a hoot how the negotiations are going. Our

people don’t care how they are. They want to see the games on TV.

Have Major League Baseball come and say, ‘‘We’re going to get

back to you in a couple of weeks about a new owner,’’ hello? 52

weeks ago, 52 weeks ago that was the message.

So I hope this committee, because we don’t have the power at the

local level that I thought we had over Comcast, and frankly, we

have no power, as I said, over Major League baseball. You do. And

if we can shortcut some of this, I promise you, Comcast is going

to yield if you keep their feet to the fire, and it may only be an

interim solution, but it will be a solution in the public interest, i.e.,

the games will be up.

Thank you very much. I apologize for having to get back to Annapolis. We’re going to be in a voting session starting shortly.

And I just want to give my compliments to Mayor Williams. Nobody was more excited than baseball fans and even Orioles fans,

when he announced in 2004 that the team was coming to Washington, and we salute him for his leadership.

And whatever we can, Congresswoman Norton, collectively as a

region, to help this team grow and help this team be a success, we

want to do that. Thank you for your advocacy and leadership on

this. It is a tremendous asset to our region.

Mr. Chairman, once again, personally my thanks to you.

[The prepared statement of Mr. Franchot follows:]

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Chairman TOM DAVIS. Mr. Van Hollen, did you want to say

something?

Mr. VAN HOLLEN. Yes, Mr. Chairman. I was out of the room

when Mr. Franchot was introduced, and I understand he has to

run, but I want to thank Delegate Franchot for his leadership on

this issue and getting it out in front.

Mr. FRANCHOT. Thank you.

Mr. VAN HOLLEN. Do your best in Annapolis in these last busy

days.

Mr. FRANCHOT. Thank you.

Chairman TOM DAVIS. Now, we are going to hear from the man

who caused all this by bringing the team to Washington. Tony?

Mr. RUPPERSBERGER. Can I say something to Mr. Franchot?

Chairman TOM DAVIS. Yes.

Mr. RUPPERSBERGER. Thank you for being here today. I know

this is a very difficult issue, but that energy issue that you are

dealing with is very difficult also, so do your job in Annapolis.

Thank you.

Chairman TOM DAVIS. Thank you.

Mr. FRANCHOT. Well, we’ll solve that issue. You solve this one up

here, and we’ll come together.

Mr. RUPPERSBERGER. That is a deal.

Chairman TOM DAVIS. Mayor Williams, thank you very much for

your patience today, and thank you for bringing the team here, and

it has been a tough road. I don’t know that anybody could have

done it, and you made a huge difference, and I just thank you for

it.

STATEMENT OF MAYOR ANTHONY WILLIAMS

Mayor WILLIAMS. Thank you, Mr. Chairman, members of the

committee. It has been tough, but it’s been great for our city and

it’s been great for our region. This really is a regional partnership.

I just mention that 77 percent of the fan base is a regional fan

base, coming from outside the city, so it really is a shared enterprise in that respect, and I’m proud of it.

It is my pleasure to testify before you today regarding, I think,

a need all of us feel to widely broadcast Nationals baseball games.

I want to thank you and the committee for convening this hearing

as a way to leverage and try to resolve this matter quickly of

broadcast rights for the Nationals. You know how hard I worked,

the Council worked, the leaders of our city worked, people all over

the area worked to bring baseball back to our city and to our region. And now that the team is here, what I want to do, and I want

to speak to here, Mr. Chairman, is maximizing the number of people who catch the fever and the spirit of the Nats.

In your letter inviting me to speak at this hearing, you asked

about the potential impact of the team on the District of Columbia.

The Washington Nationals and the team’s new ballpark, I believe,

will produce new jobs for our city’s residents. The ballpark will be

a catalyst for, I believe $2 to $3 billion in development, and $50

to $75 million in annual sales and property taxes.

On top of this, based on the anticipated economic development

around the stadium, we anticipate generating another $450 million

for a community benefit fund, which will support our schools and

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after-school programs. All these estimates are, of course—and I emphasize this—predicated on the Nationals being widely publicized

and the fan base continually growing.

I want to also talk about the impact on our residents, both in the

District and in the region. Having baseball back means we can now

satisfy our young baseball fans who have just been waiting for

their chance to root for a home team.

Furthermore, the new ballpark is truly about something very

special to us in this city, and that is the rebirth of the Anacostia

waterfront. And what does this mean? It means creating thousands

of jobs and new economic development, particularly for local, small

disadvantaged businesses. It is about visitors from Maryland, from

Virginia, from around the country and around the world, all coming

to the District and enjoying America’s pastime.

The ballpark on the Anacostia River will be the anchor for developing hundreds of acres of vacant and under-utilized land, creating

new opportunities for local small businesses and local ventures.

The location of the ballpark where we enforce the connection of

neighborhoods on both sides of the river, and in so doing, reinforce

the connection of people on both sides of the river and our city.

And in so doing, finally, it will link an under-utilized segment of

the river back to the capital. It is hard to believe that only four

blocks from here is one of the most under used, under utilized and

neglected spots in our entire city, four blocks from the literal center

of the city of Washington, DC.

So the bottom line is that the ballpark and the team will not be

islands until themselves. The bottom line is that intertwined and

in partnership will be part of, I think, a very, very powerful economic engine, churning out new development, new jobs and new

opportunities for our Nation’s Capital. And as an advocate, as

Mayor of our city, for Washington Nationals fans everywhere, I

urge all of the folks here to come together. We’ve got a number of

legal issues, but we have to come together.

You know, a lot of the legal issues I heard here were similar to

the legal issues we had in bringing the team to Washington to

begin with. We got the original issues with the baseball stadium

agreement. We got the original—we got the issues with the lease

and the issues with the construction contract, and the issues with

this and the issues with that. And what we heard consistently from

the fans is, you know, ‘‘That’s your problem, that’s not my problem.

Get it done. Get the team here.’’ What I’m hearing from citizens

is, ‘‘We understand the issues of compensating the Orioles. We understand the issues with the regional sports network. We understand the issues with Comcast. But that’s not our problem. That’s

your problem. Get it done.’’

So I can’t do anything but wholeheartedly agree with the committee on the need for baseball to step in while we are, as quickly

as possible, getting an owner, bringing the parties together. And

while they’re resolving these disputes, get the game on the air.

Thank you.

Chairman TOM DAVIS. Thank you very much.

Sean, welcome.

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STATEMENT OF SEAN T. CONNAUGHTON

Mr. CONNAUGHTON. Congressman Davis, Mr. Chairman, thank

you very much, members of the committee. I am Sean

Connaughton. I’m the chairman of the Board of Supervisors in

Prince William County, and I would first of all like to thank you

for having me here, and also commend you for raising this issue.

It’s been surprising to me the number of constituent contacts I’ve

gotten on this issue, particularly, given it is a team that’s only existed for about a year, and the number of people that really in my

community have already adopted the Nationals, and are very, very

big supporters.

For those of you who don’t maybe know about Prince William, we

are approximately 30 miles south of Washington, DC, to the south

and to the west, growing very rapidly. We have around 370,000

people today. Our estimates put us in about a little over a decade,

we’ll be actually larger in population than the District of Columbia.

Because of that growth, obviously, we have people that are very

much tied to the Washington region when you look at where they

are going for work. Many people are like myself, who come up to

Washington pretty much every day to work. This is our city. We

very much are here working, paying taxes, and being involved in

some of the things that are happening up here.

But it is very difficult for many of my constituents, due to all the

transportation problems we’re having, to get up here for ball

games, to enjoy all of the things that are in this great city. That

is why being able to become a fan and being able to watch the Nationals, being able to make sure that they can enjoy, when they

can, the Nationals on TV, but also when they can, to get up here

to build that fan base by using and looking to the cable franchises

such as Comcast.

Comcast is our cable provider, although we do have a couple

smaller ones, and we will be actually voting next month or so on

having a franchise for Verizon as well. But about 75,000 homes are

served by Comcast in Prince William County. They’ve been a very

good provider. We’ve had a very good relationship with them.

They’ve been very much involved in our community, and also have

a fairly large call center in our county, and so we’ve enjoyed that

relationship.

And we really are just trying to urge whatever can happen to

make sure that this negotiation goes in such a way that our citizens can enjoy the Nationals.

I will mention that one of the things that we’re looking to is not

only to help this regional economy, to help support this team, we

also are the location of a minor league affiliate of the Nationals,

the Potomac Nationals. And we recognize that as we’re moving forward on building a new stadium for that franchise, which will not

be reaching some of the proportions of some of the issues that

Mayor Williams’ faces in building his stadium. But I will tell you,

we have faced some of the same cost issues, we are facing some of

the same land acquisition issues, but obviously, on a much smaller

scale, but we recognize that if we are going to put that type of expenditure out, we need to make sure we have a fan base locally for

the Nationals and our local Nationals affiliate, and that will help

the big league Nationals.

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So anything that can be done to move this issue forward is something that we will be there, whether to discuss this with Comcast,

to work with you all, work with the Mayor, we just want to see this

issue resolved.

Thank you very much.

[The prepared statement of Mr. Connaughton follows:]

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Chairman TOM DAVIS. Thank you.

Mr. Duncan, thanks for being with us.

STATEMENT OF DOUG DUNCAN

Mr. DUNCAN. Mr. Chairman and members of the panel, Thank

you very much.

I sat here since 12:30 listening to the testimony, listening to the

comments, and all I could do was think about how wrong Tom

Hanks was. In the movie ‘‘League of Their Own,’’ he kept saying,

‘‘There’s no crying in baseball. There’s no crying in baseball.’’ Well,

you know what? There are thousands of fans who are crying because they can’t see their team on TV. A great game last night. If

you’re fortunate enough to live in Fairfax County with Cox, you

could have seen it. If you’re in Montgomery County with Comcast,

it wasn’t available, thanks to Major League Baseball, thanks to

Peter Angelos.

We do have a unique situation here. The plan devised by their

agreement led to the formation and the development of the MidAtlantic Sports Network, which is a media outlet designed to enable fans throughout our State to view sports entertainment from

both teams. I think that agreement is going to lead stronger franchises, dual sports loyalties, more exciting rivalries, which is great

for all Marylanders.

There’s one impediment to that though, and that, unfortunately

is the power of our cable companies to restrict the content. Comcast

is an effective monopoly in a number of local jurisdictions in Maryland. It’s a legal right granted by you all, granted by the counties,

granted by the States, in order to achieve universal cable coverage.

But it wasn’t a monopoly granted to allow them to make unilateral

decisions about the programming available to the customers.

We’re all frustrated that we can only see 40 games this year that

are going to be on UPN 20. If you’re not in a part of the State that

can’t get UPN 20, you don’t see any of those, and it leaves everyone

out of the other 120 games, 122 games in which sports fans get

shut out by Comcast.

I grew up as a Senators fan. When they left, I became an Orioles

fan. I’m a long-time Orioles fan. I could not have been more

pleased when Mayor Williams brokered the deal to bring the Expos

to D.C. to give us the Nationals. Competition in sports is good.

Competition in the marketplace is good, but right now that competition is being hampered because fans are being denied the right

to watch the team of their choice on television. That’s an unfortunate case of self-interest and shortsightedness.

The time to resolve this matter was not now when the season

started, it was during the off season. But we saw Comcast make

a choice that they were going to litigate instead of negotiate, and

that’s a shame for all of us.

One way to solve this is to get competition in the marketplace.

You’ve got it in certain areas. You’re talking about Verizon coming.

We’re in negotiations with Verizon as well. I think once you get

that competition in there, that’s going to free up and lead to demand for this. However, we can’t wait years for that to happen. I

sort of agree that Comcast can show the games now, while the

court case is going on, while negotiations, discussions are going on,

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they can show the games now. They owe it to their customer base.

They owe it to this region, and that’s what we’re asking them to

do, and I’m just very thankful that you all are involved with this

and trying to push them and urge them to do the right thing here.

Thank you very much.

[The prepared statement of Mr. Duncan follows:]

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Chairman TOM DAVIS. Thank you very much.

Mr. Koski, thanks for being here and thanks for your patience.

STATEMENT OF IAN KOSKI

Mr. KOSKI. You bet. Thank you very much.

Chairman TOM DAVIS. Thanks for spearheading this.

Mr. KOSKI. Thank you all very much for the honor of actually

being invited to speak here today on behalf of all Washington Nationals fans, at least the ones who don’t hold a seat in Congress.

My name is Ian Koski. I’m the editor of a Web site,

NationalsPride.com. We’re essentially a daily newsstand for all

things Nationals, features, news, whatever. And I have absolutely

no connection to MASN, to the Orioles, to the Nationals, Comcast,

I mean except for the money I pay out for my tickets and my

Comcast bill, I’m independent.

Before I start, I did want to thank Mayor Williams. I thanked

him privately. But getting the Nationals was a big deal for us, and

we really appreciate the work you’ve done to bring us this team.

I know what it means to be at the last seat of the last panel, so

I will try to be brief.

First of all, I want to thank you for actually holding the hearing.

In the broader scheme of things, this isn’t, you know, a terribly important issue in the Congress, but you’re doing the right thing

here. There obviously are national concerns when a company as

large as Comcast flagrantly disregards the interests of its customers, your constituents, but ultimately, this issue should never

have reached this body. It should have been resolved by the parties

who sat at this table before us, long, long ago.

If the Nationals had an ownership group, this wouldn’t have

been an issue, they would have been able to deal with this, and

they would have been able to fight for it.

In lieu of that, I’m glad that our elected leaders have stepped up.

Congressman Davis, Congressman Moran, I really, really appreciate, as a Virginia resident, your participation in the press conference last weekend, your leadership since then in making this a

real issue.

The fact is, the deal that Major League Baseball made with Mr.

Angelos was terrible for Washington. It may have made sense that

Mr. Angelos would feel he needed to be compensated for the hit he

was going to take when the Nationals came here, but baseball went

way too far, giving away our broadcast rights, which is what they

did. It is absurd that our closest competitor, led by a man who has

fought tooth and nail for 15 years to keep baseball out of D.C., it’s

absurd that he has our broadcast rights. The rights should have

been held for the new owners, frankly, they just should have been

held. A deal could have been reached for 1 year to get the Nationals on last season. Of course, we were supposed to have an owner

a long time ago, but that’s another issue.

It’s just awful that Comcast is refusing to carry MASN, and I

note how the reason keeps changing. One day it’s about how

Comcast SportsNet was supposed to have this right of first refusal,

the next day it’s about the per-subscriber fee, that it’s too high, the

following week it’s because they think that D.C. and Baltimore, two

top–25 markets, can’t handle two regional sports networks. Then of

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course, there’s the argument they made yesterday, that the whole

situation should have been avoided in the first place by putting Nationals rights out to competitive bid.

The story keeps changing until now they haven’t found a message that insulates them from our outrage. And I say until now because, well, the proposal they put out yesterday, it’s probably right.

You know, it’s what should have been done day one, you know. At

this point though it’s almost naive to think that’s going to happen.

It was clearly proposed for the sake of this hearing. When I actually read the document, the letter written to Bud Selig, I actually

laughed out loud, because it’s clearly not going to happen.

Major League Baseball’s deal with Mr. Angelos is definitely a

bad one, and it frustrates Nats fans like me to no end, that our interests have been forcibly tied to his. I don’t see that deal going

away though. I would be floored if Mr. Angelos voluntarily surrendered the sweetheart deal he’s got going now.

It’s up to Comcast, it really is. The lawsuits aren’t going to pan

out for them. That’s pretty clear at this point. All the other cable

companies are paying the board subscriber fee. I mean, the YES

Network, which charges about the same thing, is not MASN, as

we’ve identified here. And, of course, the region can handle two

sports networks. We need Comcast to take the high road, and,

frankly, I’m disappointed they’ve all left, because I was hoping to

directly ask them to take the high road.

It’s time for Comcast to move on and start showing Nationals

games. It’s the fans here in Washington, us, who are paying the

price here, and it’s a legal feud—you know, they may try to deny

it, but this is a legal feud between a corporation in Philadelphia,

a business owner in Baltimore and Major League Baseball in New

York. It’s got nothing to do with us, and we’re the ones paying the

price.

Major League Baseball should be more involved in this. They’re

kind of burying their heads in the sand here by saying, well, you

know, we’re meeting with them, we’re gently encouraging them.

The fact of the matter is they created this situation and it’s very

much their responsibility to end this situation.

Now, NationalsPride.com has offered fans an online petition to

sign since mid last summer, when it became clear that this issue

was going nowhere for a variety of reasons, including lack of a

budget—I mean funding it out of my savings account—and declining fan interest in the team as they’re on their on-the-field play declined last season. The petition really didn’t gain traction. And at

the end of the season we only had about 200 signatures.

About 3 weeks ago, that changed. People realized that we’re

going to have another season without games on Comcast, and the

signatures picked up, and in just 3 weeks we’ve had another 350

signatures, which isn’t bad considering the budget we’re working

with, and 100 have come just from the last 2 days.

So today, our petition is 565 names strong, and that’s going to

grow, and that will continue to grow every day this situation drags

on.

Chairman Davis, Congressman Moran, I appreciate your signatures on this petition, and I hope it to be joined soon by other

Members of Congress from this area. On behalf of the signatories

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of this petition, we urge Comcast to move on and start carrying

MASN. And we thank Congress for getting involved.

Not all of us can get out to RFK Stadium. A gentleman named

Neil Owens, his father can’t. He sent me an e-mail. He’s from Kensington, MD. He sent me an e-mail this week about how happy he

and his father were when the Nats started playing here, because

the two went to games, father and son do, just like they did when

the Senators were in town when this gentleman was a youngster.

Unfortunately, since then his father’s health has declined. His hip

prevents him from actually going up and down, and they just can’t

go to games at RFK. And he’s a municipal employee, and, frankly,

doesn’t think he can afford DirecTV, and frankly, not all of us can

even get DirecTV. I live in a condo and the landlord simply won’t

allow a dish on his balcony. I used to live in a high-rise where

dishes were absolutely prohibited, and that’s the case in many,

many buildings throughout the D.C. region. It’s not as simple as

switching.

So for people like Neil and people like me, there is not that clear

option, and something needs to be done. Baseball’s been so good for

Washington since it came here last year. I mean it’s really renewed

the sense of community and created a shared sense of excitement.

I mean it’s just—it’s great to walk around and see people different

colors, ages, incomes, walking around in all the same red Nats

hats, and it’s just such a disappointment that enthusiasm has to

end when you enter your house, when you enter your apartment,

and you can’t watch your team on TV. No other city has such a terrible situation with their baseball team, so let me conclude with

just a clear statement.

It’s time for Washington fans to stop being punished by Comcast

because it’s got a problem with the Orioles. It’s just not right. Both

of them are the problem here. Both of them are to blame, and unfortunately, at this point, I genuinely think only Comcast will provide the solution.

So with that, thank you very, very much for your time.

[The prepared statement of Mr. Koski follows:]

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Chairman TOM DAVIS. Thank you. Let me ask each of the local

leaders where you have Comcast Cable, is there anything you can

do because you have given them an exclusive franchise for your

areas, any pressure you can put on them to carry out? I know years

ago in Fairfax we had an issue with WGN and carrying the Cubs

games, and we were able to prevail on them. Of course, since that

time, Congress has eroded some of the power of localities to oversee. Is there anything you can do from your perspective? Have you

sat down with Comcast, Doug?

Mr. DUNCAN. We have no control over what they show on the airwaves. You all preempted that, so there’s no local control over any

of that.

Chairman TOM DAVIS. You can’t control the airwaves. What controls do you have over Comcast? You can allow other franchises to

come into the county, can’t you?

Mr. DUNCAN. Yes, and we’ve got Star Power and we are in negotiations with Verizon. We need competition in the marketplace, the

best thing that could happen, but I don’t want to wait 2 or 3 years

for that to happen. We need to see the games now.

Chairman TOM DAVIS. Right.

Mr. CONNAUGHTON. I believe, Mr. Chairman, that I’ll go along

with Mr. Duncan. I mean, we’ve contacted them on this issue. We

only recently renegotiated the franchise agreement with Comcast,

which obviously if this came up before that, we could have had a

little bit more leverage on them, but, obviously, due to the law, we

can’t either deal with the channels or the rates that they end up

charging, but we do have Verizon coming down the pike, and that

will take some time for them to get the infrastructure in place to

actually offer service throughout the county.

Mayor WILLIAMS. I would agree with that, Mr. Chairman. I think

that the risk that Comcast runs is the longer this goes, the more

people are going to be pushed into other alternatives. The problem

is, in that interim time, we’re losing critical exposure to our fan

base.

Chairman TOM DAVIS. Mayor Williams, let me just ask you. Are

you concerned too that an owner hasn’t been named? You heard

Mr. Dupuy. Don’t be shy. [Laughter.]

Mayor WILLIAMS. Well, you know, I take some exception that I

haven’t spoken up on this. I mean I’ve been speaking on this for

a year, but what I’m trying to do is I’m trying to bring—no, I’m

trying to bring a team here under very difficult circumstances

where I’m dealing with a monopoly. When you’re dealing with a

monopoly, it’s very difficult. You don’t get a perfect deal. But what

I’ve said from the very beginning is I don’t want perfect to be an

enemy of the good.

You know, we’ve been told again and again that, you know, we’re

in the process of bringing an owner here, and there was this deadline and this deadline, most recently the deadline was that all the

agreements had to be in place. Now after a long, arduous process,

all the agreements are in place, and it’s time to have an owner. I

am in conversation with baseball probably every other day, one

way or the other, through intermediaries or directly.

Chairman TOM DAVIS. Do you think if baseball had named an

owner at this point we might have had a different outcome, that

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they could have sat down with the different parties and pressured

it in a way that Major League Baseball as the owner hasn’t done.

Any thought on that from anybody?

Mayor WILLIAMS. I don’t think that the actual deal—I think the

actual deal itself would have been probably within the parameters

that you see right now, because in terms of the way I look at it

is—and I wrote an op-ed about this—I know some people would

take exception to it—but Mr. Angelos had to be compensated in

some way, and so most people felt, most sports columnists felt that

the Chicago model was the way to go, and actually, in terms of

rights, in terms of regional market, in terms of the number of

games shown, it wasn’t a bad deal, but any deal is a bad deal if

it isn’t on the air. I think the two things that Major League Baseball can do with the most impact right now, are, one to forcefully

engage with the two parties to get the games on the air, and, two,

as everybody here is saying, and as everybody in the city has been

saying, to get an owner named as soon as possible.

Mr. KOSKI. Mr. Chairman, if I could add to that?

Chairman TOM DAVIS. Please.

Mr. KOSKI. I think—yes, I absolutely believe the situation would

be different if an owner had been named months ago. They would

be able to negotiate. They could have bought into MASN, bought

an additional share, a larger share that could have prevented this.

They could have intervened. They’ve got money. There’s so many

different ways that this could have happened. And I think it’s—although I think you’re right, Major League Baseball is the ones that

have to intervene strongly and get involved, I don’t think we can

trust them to do that. We can’t trust them to be looking out for our

interests, especially the way they handled the stadium situation,

and to rely on that exclusively, it will be a problem.

Chairman TOM DAVIS. Thank you.

Mr. Cummings.

Mr. CUMMINGS. Mr. Mayor, the things that you just said, those

two items about Major League Baseball getting involved and choosing an owner and trying to resolve this dispute, I take it that

you’ve had discussions with them over and over again about that?

Mayor WILLIAMS. My big thing with an owner—the two big

things that are important to me in the ownership group above and

beyond time are that the owner have a local connection because of

the enormous contribution that the city’s making, the fans are

making to this enterprise; and No. 2, I think because of the history

of baseball and the history of our city, and everything involved, it’s

very, very important that there be a strong minority ownership equity interest in the team. I think that would speak volumes to help

redress some of baseball’s troubled history in the past.

Mr. CUMMINGS. And what is the hold up right now? What are

they saying is the hold up with regard to ownership?

Mayor WILLIAMS. You’re never really told there’s any real hold

up except at this point they’re interviewing all the different candidates who are all coming in there. One of the things I am told,

that they are looking to maximize the local interest and to the extent possible maximize a minority equity in the team, and I applaud that, certainly applaud the first, but I also applaud the second as well.

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You know why I’m not a spokesman for baseball.

Mr. CUMMINGS. I understand, and I hear you say that on WTOP

the other day. And it just—and I also heard you say that there was

a group that you favored. I mean, you made no doubt about it, and

I just wondered do you think—sometimes when somebody with—

you do remember that though? I don’t want to put words in your

mouth now, because I heard you say it about three times in the

interview.

Mayor WILLIAMS. Yes.

Mr. CUMMINGS. And you gave the reasons. And I’m not all familiar with all the teams, but you said basically what you just said

about the criteria that you wanted. But I was just wondering, do

you think that maybe your being in favor of a particular group—

how many groups are there?

Mayor WILLIAMS. Well, there are—I don’t know how many there

are total. There are three major groups in contention.

Mr. CUMMINGS. Do you think that is—do they see that as an interference at all?

Mayor WILLIAMS. No, I don’t, because I think I’ve said over and

over and over again, that my No. 1 preference is the Washington

Baseball Club, because of the local connection, because of the minority participation, because of their unparalleled access at every

level of Government on both sides of the political aisle, because if

you take people like—I mention Jim Kensey, Joe Robert are two

examples. You know, substantial contribution to education and

schools in the District, not just a scholarship program, but we’re

talking about the College Access Program. We’re talking about the

D.C. Public Schools. That ought to be recognized.

Having said that, what I’ve also said, over and over and over

again, this is my No. 1 group, but I’m happy with any group, and

I’ll work with any group, having said that, that has a local connection and minority equity of a significant amount.

Mr. CUMMINGS. Mr. Koski, I think that you are to be applauded

for your efforts to take on an issue like this, and you said something very interesting just a moment ago, when you said that—

well, you at least implied—that you don’t have a lot of faith in

Major League Baseball.

Mr. KOSKI. I’ll say it outright for you, I don’t have a lot of faith

in Major League Baseball.

Mr. CUMMINGS. This committee has had its experiences with the

whole steroid issue, by the way, and Major League Baseball. I am

just wondering, so you don’t see Major League Baseball resolving

this issue?

Mr. KOSKI. I think they should be trying, but in my old age, I’ve

learned that the right thing isn’t necessarily what gets done, and,

no, I don’t think they’ll do it.

Mr. CUMMINGS. And so as far as the integrity of the game is concerned, I guess you would—is it a rational conclusion, therefore,

that the fans—you are fearful the fans may begin to lose interest

even more, particularly when you got a team that’s not No. 1 or

2?

Mr. KOSKI. Yes, to an extent. I mean, I don’t think you’re going

to lose them outright, but if your team is playing badly and you

can’t watch them, you stop thinking about them, and you stop

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thinking about them, you stop buying tickets, you stop showing up

for your games, which is exactly what happened last season. You

stop buying merchandise, and you don’t want to string two seasons

like that together before you try to fill a brand new stadium.

Mr. CUMMINGS. Thank you. Thank you all.

Chairman TOM DAVIS. Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Mr. Chairman. Thank you all for

your testimony, and thank you, Mayor Williams, for your leadership in bringing baseball back to Washington. I want to congratulate you on that. I want to thank all of you. I want to thank County

Executive Doug Duncan for his efforts with respect to getting the

games on television just as soon as possible so the fans can be well

served, and all of you for your efforts there.

Let me start with you, Mayor Williams. Mr. Dupuy testified that

if you took all the equities into account, that the deal that was

struck by Major League Baseball is ‘‘a fair deal.’’ Would you agree

with that?

Mayor WILLIAMS. The deal with Mr. Angelos or the deal with the

city?

Mr. VAN HOLLEN. Well, I understood him—what do you think

about the deal with Mr. Angelos?

Mayor WILLIAMS. I think overall, when Jack Evans and I wrote

an article to this effect, when you look at the market that we had

access to, when you look at the number of games that would be

shown, when you look at the guaranteed revenue to our team of,

I think it was $21 million, and you compare that to other places,

I thought under the circumstances, where the Orioles had to be

compensated, I thought it was a fair deal. Was it the best deal? No.

But was my deal with baseball the best deal? No. But under the

circumstances, we got a team and we’re up and running. It doesn’t

sound glamorous or——

Mr. VAN HOLLEN. No, I hear you, and I think all of us want, obviously, to make sure the fans can see the games, and we also have

an interest in making sure that the cost to our cable subscribers

is a minimum. I mean, for example, we heard Comcast say they

don’t accept a la carte, which means that—in terms of the programming, which means that all of our constituents, all of the consumers are going to be paying whatever additional costs, and Comcast

has been saying publicly as part of their argument, that if you take

the Angelos deal, it’s going to end up costing our subscribers a lot

more.

Now, I understood Mr. Cohen’s testimony—he wouldn’t guarantee that—all he would say was that when you have two regional

sports networks, the experience is that it ends up costing more. I

would be interested in you guys’ assessment, beginning with you,

Mr. Koski. I mean, is there any evidence to suggest that this region

can’t handle two regional sports networks and that the effect of

having two regional sports networks would be to increase the cost

to subscribers of Comcast?

Mr. KOSKI. I would think, well, there are two answers to that.

Yes, we can absolutely sustain two regional sports networks.

Three’s enough teams here and there’s enough fans, and we’ve got

two cities worth, albeit, Baltimore doesn’t have a hockey team or

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a basketball team, but Ravens coverage along in the fall will sustain SportsNight.

And to the second question, yeah, it probably will increase sub- scriber fees. If Comcast SportsNet costs $2 a month per subscriber,

and MASN costs $2 a month per subscriber, yeah, I expect my

$167 bill to go up to $169, well, probably $170, you know, profit.

Mr. VAN HOLLEN. Any other?

Mr. DUNCAN. Well, I was very interested in Mr. Angelos’ comments of—at the end he sort of threw out, we should be talking

about putting these two networks together. He basically offered

Comcast a share in the deal, so I thought that was a real interesting statement, and hopefully they’ll pursue that. I mean that’s one

way to deal with the situation.

Mr. VAN HOLLEN. Right, thank you.

Any other comments on? Well, you guys all heard the testimony.

What would you recommend that we do, I think, working with you,

to——

Mayor WILLIAMS. Well, Congressman, I would say that what Executive Duncan said is the right to go. If you get the two parties

talking about not only getting the games on the air, but talking

about some kind of partnership, and over the coming days, you also

have a new owner of the Nationals stepping in at the table. That’s

the best of all worlds there I think.

Mr. CONNAUGHTON. Congressman, if I could just throw in just

one caveat to all of this, and that is, other than traffic, the No. 1

complaint—the No. 2 complaint on a continual basis I get, is about

cable fees and about the rise in cable fees, and about the issue on

where they change the networks and the channels that are being

offered. And so I mean we recognize that this is about commercial

negotiations between MASN and Comcast, but we urge, obviously,

it’s about accessibility as well as making sure that it is something

that doesn’t continue to drive up the cost of cable, which again,

today, I had several e-mails about this issue, and at the middle of

all of them they were complaining generally about the cost of cable

today.

Mr. VAN HOLLEN. Well, no, that’s exactly right, and that’s the

point I’ve been trying to hit throughout the day, which is, with all

due respect to any cable provider, Comcast or whoever it may be,

I think that they are more interested in making sure their stockholders and investors have a return on their money than making

sure that their consumers are paying the lowest rate possible, and

I think all of you have experience in local government understand

that, and I think the listeners understand that.

We need to make sure—we as the elected officials need to make

sure, No. 1, we allow our constituents the opportunity to view these

games; but No. 2, we make sure that neither side is able to gouge

them, and that we make sure that we are in a position to drive the

best possible bargain that we can, given our limited ability to intervene in a contractual agreement between two private entities.

Thank you. Thank you, Mr. Chairman.

Chairman TOM DAVIS. Mr. Ruppersberger.

Mr. RUPPERSBERGER. Mayor Williams, I want to acknowledge

your leadership in bringing the team here. I was involved in bringing the Ravens back to Baltimore, and it was a tough fight with

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the Maryland Legislature, and even within your own house, and I

think really a professional team that brings pride to the community, it brings people together, it is something that you can go to

a game with your children. I think it is very positive in the end

including for economic development. But there are other arguments

to the other side.

In fact, I do want to say this, and Peter Angelos can take care

of himself and he is a tough guy, but he cared about his team. He

bought something he felt that by bringing a franchise to the Washington area would hurt his franchise, and it probably will from a

cash-flow point of view.

But as a fan, I can understand how people here would be mad

at him and how he would be the villain. I don’t think though that

you would have a team here right now if Peter did not agree and

negotiate with Major League Baseball. Now, whether Major League

Baseball did the right thing, I mean, history will only tell. But I

think—Mr. Koski, I really applaud you for being a fan. You and I

are both fans and we will probably be against each other and cross

swords when the Orioles play the Nats, but I think it is important

we get the facts out on the table.

I just learned this, but it is my understanding that the Nats will

eventually have 33 percent of MASN. Now, that is something that

no other Major League Baseball team will inherit or has, that they

will with time get that 33 percent, which means of the profits.

Where it is or how it goes, I am not sure. Let me get back to you

if you can clarify, because I think it is important that we get those

facts out on the table.

Mayor Williams, I also applaud you for stating, look, it was the

best deal we could do and I have to stand behind it because I was

negotiating and we have a team, and that is the No. 1 issue, but

now it is up to Major League Baseball to go to work with the new

owner, and hopefully that owner will be as tough as Peter Angelos,

and make this team extremely competitive. Because even though it

is the Washington region and the Baltimore region and we have

had our battles, I think if we come together as a region from an

economic development point of view, the Baltimore-Washington Region will even be stronger. We have all been able to talk about

that.

Doug Duncan, I hardly recognize you, you have lost so much

weight. I guess that is because you are running? [Laughter.]

Mr. RUPPERSBERGER. Doug and I go way back as county executives, and we have really talked about regional issues, and it is

good to see that we are on the same side, because when it came

to the Ravens and Redskins, that was where we crossed paths. But

I believe everyone here at this table really believes that it is so important that we have baseball, and we have baseball right away.

It is tough for me to see Comcast—and I agree, Sean, is it? I

agree. When I was a county executive and a county councilman,

Comcast and cable, people were really getting upset and they

weren’t popular. One of the things that they did, they went back

to the community, put their employees out in the community, and

they really turned around from a public relations point of view.

What Comcast management has to do now is decide how much

is it worth for public relations versus what the long-term issues are

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as it relates to their stockholders and the competition that is coming down the road? And that is a corporate decision. We can’t make

that decision. I would hope that we go with the public relations

side, because I think in the end, that would help them, and I want

them to be strong, because as I said before, they put back into my

community, but only time will tell that.

But let me get to you, Mr. Koski, about the issue of the 33 percent and how you interpret what those facts are.

Mr. KOSKI. Well, that 33 percent happens in 30 years. It’s not

like——

Mr. RUPPERSBERGER. Oh, that is rather relevant.

Mr. KOSKI. It’s not like 5 years from now the Nats will be 30 percent owners. It’s 30 years from now. It’s a long time. And, yes, that

deal may be good for the Nationals down the line, even when

they’re a 15 or 20 percent owner. Doesn’t do us any good this week

when we still can’t watch the games. So although long-term it may

have some financial fruit for the Nationals, it’s doing us no good

now, and in fact, quite the opposite, it’s actually hurting us, and

if that hadn’t been created, if the Nationals rights had been kept

separate, they could have been sold to Comcast for that same $20,

$25 million fee, which is all we’re getting this year really anyway.

Mr. RUPPERSBERGER. Thank you. I think we are all in agreement, and again, I thank the chairman for putting this issue on the

table.

I was against the chairman—I felt that it might have been

grand-standing—about the steroid issue, and I think that was one

of the best hearings that I have participated in, and it really put

the issue on the table, and I think, Mr. Chairman, putting this

issue on the table, hopefully will get us to where we need to be.

Chairman TOM DAVIS. Certainly can’t hurt.

Mr. Moran.

Mr. MORAN. Thank you, Mr. Chairman. I thank Mr. Koski for

trying to expand the fan base and keep them informed, taking the

initiative.

I would like to ask the three local government executives if

MASN is able to develop a network, a real network, more than just

the games, and they find that to do so would maintain their profit

margin, they have to substantially increase the rates, and if

Comcast loses, gives up. If they don’t have the Orioles and the Nationals games they may not be able to sustain the sports network

that they’ve invested capital in building up, so that Mid Atlantic

Sports Network may control the whole shebang. If they do, can

they increase the rates for Cox and the rates that Comcast customers have to pay at the drop of the hat? Do they have any kinds

of limitations on what level by which they’re able to raise rates and

how often? Do you have any control over that?

Mr. DUNCAN. I think there’s something over the basic rates, over

the minimal service we’ve got some control, but then when you get

into the tiered levels, which is pretty much what everybody gets,

we have no control of that at all. I don’t know if they’re restricted

to——

Mr. MORAN. The reason I ask, this is going to be part of the basic

package. It is not a supplement. So that basic cable subscriber fee

is going to go up as much as it has to in order cover Mid Atlantic

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Sports Network’s charges, which could become substantial if they

develop a network and they get basically monopolistic control over

the whole Washington-Baltimore area for the two major sports

teams. If that were to happen, do they have the prerogative, the

ability, the right to pass on the increases whenever and however

they want?

Mr. CONNAUGHTON. Congressman Moran, we get, obviously, a lot

of complaints about the rates, and our understanding is that under

Federal, under the cable law, under Federal law, that we cannot

regulate or do anything about the actual rates that they charge.

But I would like to just maybe point out that we are seeing, you

know, the cable—we have primarily Comcast, but we also have a

couple smaller ones, and then we have Verizon coming down in a

few months, but the thing that’s happening is that they are obviously facing competition from DirecTV and even from over the

Internet.

So the issue is for them—I mean we’re talking about why we

want to see some agreement reached is that we can get more marketing to people about the Washington Nationals, and they’d be

getting interest in building that fan base, particularly in places

like, again, my community. I mean, we we’re going to increase the

population in 10 years by 50 percent. And so you look at where the

potential biggest market growth is, it’s in places like northern Virginia. And how do you reach out to these people, many of them new

to the Washington region completely. But the issue is, is making

the Nationals accessible to this new and growing population, but

at a reasonable price. I think what they’ve got to recognize is that

for the cable providers, they have to be even more competitive,

given the fact that there’s more and more competition, not only

from the fact that they’re going to be facing Verizon potentially

coming to my community as well as other communities throughout

the region, but also the fact that there’s other providers of telecommunications services, but it is about money as well.

Mr. MORAN. I appreciate that, Sean, but other than the law of

supply and demand, you have no regulatory control. None of the

three of you. Same thing in D.C., Mayor? Yes.

Incidently, did I hear you say, Mr. Connaughton that the Cannons are a minor league of the Nationals?

Mr. CONNAUGHTON. Yes. In fact, Congressman, the chairman has

actually been at—in fact, was there the night that they renamed

what was at one time the Alexandria Dukes, I think when you

were on the City Council or Mayor. They have now become the Potomac Nationals. We call them the p-Nats, and in fact, we’re building them a new stadium, but they are a minor league affiliate now

of the Nationals. And I was just mentioning to the Mayor, again,

it’s amazing to me, again, the cost that will incur, but the excitement that we saw last year when various major league players

were injured, because of the proximity to Washington, we had

those players coming down and actually playing for the single A affiliate.

Mr. MORAN. That is terrific. I missed that, and I am glad that

is happening, although they may want to work on that name, the

p-Nats, but—[laughter]—I just have one other question. Doug, in

your testimony you said that ‘‘if there’s no action by the company

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by the time the Nationals finish their first home’’—I think you

meant their first home series.

Mr. DUNCAN. Series, yes.

Mr. MORAN. This week. ‘‘Then I believe Congress needs to step

in and take appropriate action to ensure that baseball fans can

watch the team of their choice.’’ What action were you

referring——

Mr. DUNCAN. I was just asking you all to get involved, as you are

now, to put pressure on baseball.

Mr. MORAN. Just public pressure.

Mr. DUNCAN. Public pressure on baseball, on Comcast.

Mr. MORAN. Thank you, Mr. Duncan.

Chairman TOM DAVIS. Thank you very much.

Ms. Norton.

Ms. NORTON. Well, I do think this needs public pressure. I think

these guys have been sitting off on the sidelines, and, boy, I think

that is a real fly by here. If Mr. Koski has come in with a petition,

I thank you, sir.

I want to thank Mayor Williams. First of all, he sat through

much of this hearing, and see, I know firsthand what a Mayor of

the District of Columbia has to do and what a sacrifice it is to sit

through and wait for this. I want to show him how much I appreciate that, and that I know, of course, that it’s not been easy. But

you know, the Mayor is used to coming on, being first on and getting out of Dodge here, in light of his considerable responsibilities.

This, of course, is near and dear to his heart, but as I have said

publicly, since the Mayor has wound down on his time in the District and has decided to go on to bigger and better things when he

has concluded—though we don’t know what he is going on to, that

almost anything would be bigger and better.

But I have told him that I am going to make it my business to

make sure that he is remembered for more than his signature issue

here, baseball, because he has done just that much for the District,

and he deserves to be remembered for baseball to be sure, but certainly for all he has done, to in fact, lift this city up in countless

ways.

I want to thank the region. I want to thank you for being here.

I want to thank the way in which you supported this team. When

we have used the words ‘‘fan base,’’ we are really talking about

you. Whenever we talk about base, and when you are talking about

a city, albeit the core city, in a region, I don’t care if we had the

800,000 people that we had when I was a kid. The growth of the

region would mean we would pale in sheer numbers beside what

your—what is it 3 million in this region amounts to, and we know

good and well we could not have gotten baseball without you, without the fact that your demographics in every way argue for it.

I want to say while I realize that you made a poke at competing

for this—and I don’t blame you—I also want to say that——

Mr. DUNCAN. You’re talking to Virginia.

Ms. NORTON. Yes, I am talking to Virginia, and I am talking to

my good friend here who, while he wanted baseball all along, he

and I have had a pact from the beginning—you know, when he was

competing for it—that may the best man or woman win—so that

he’s not entirely fair, and the region has been nothing but standVerDate 11-MAY-2000 09:56 Aug 17, 2006 Jkt 000000 PO 00000 Frm 00245 Fmt 6633 Sfmt 6633 D:\DOCS\28227.TXT HGOVREF1 PsN: HGOVREF1
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up folks for the District of Columbia. And, frankly, in many ways,

we understand about the commuter tax. We don’t forgive you, but

you don’t expect you to rush forward with that, and we will take

this as some recompense for what you are not giving us in commuter tax.

The Mayor, of course, was put in a very awkward position because he was competing with you, and a few other no-nothing jurisdictions outside of this region. We know what baseball understood,

that it was hard to beat this region if you were looking for another

home. But here was the Mayor, who was put in a position of engaging in both an auction and a legitimate negotiation. That is to say

he had to somehow say, ‘‘Me, me, me, me, me,’’ you know, somehow

make them understand that they should come here, and since he

is the city’s chief executive, that was his role, and at the same time

he had to sit down and negotiate the best deal for the District, a

very, very anomalous and bad position for a negotiator to be in. Of

course, you know, I think that the Mayor should have played good

cop-bad cop, because the bad cops are always the Council, and they

might have helped him earlier in those other negotiations.

Mr. Mayor you have taken a lot of brick-backs because somehow

in playing this dual role of vying for and yet getting the best price,

you somehow have—baseball has managed to get what they and

most other people considered to be a generous deal. So more than

anyone else at the table, your view of the deal, it seems to me,

would have some effect here, because you paid at the office, as they

say.

I looked at your testimony, and you have indicated that you

weren’t at all involved to come to a resolution, and I appreciate

that. But, look, you won now, here. And some of the answers to

your questions seem to indicate that you thought perhaps the question was about the deal that you in fact made or those who were

your proxies made. I am the first one to understand the awkwardness of that position. But now that the deal is made and you now

have an additional task, your job isn’t over, the city’s job isn’t over.

Now that the deal is here, they have to build this fan base, yes,

some in the District of Columbia, but mostly where these gentlemen are from.

Would you have preferred that Comcast come to a resolution

with baseball, that we could have been this season on regular

cable, that most of our region watches? If you had your druthers,

would you have preferred this resolution or are you indifferent to

the fact that we have the MASN created out of what you have

done, and now most of the residents here won’t see it, and most

of the residents in the region won’t see it. I just want to know what

your druthers are here.

Mayor WILLIAMS. My druthers is if I had to do it over again, I

think in negotiating—and I think your characterization of a collapsed auction and negotiation is exactly right, you know, and I’m

just between a rock and a hard place. But having said that, we

should have involved, rather than through official representation of

the Council, really involved the nitty-gritty of the Council at the

very beginning so that was all out on the table at the very beginning. If I had to do it over again, definitely would have done that.

Would have been difficult, but definitely should have done that.

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And we started out, not only were we dealing with the representatives of Council, but we also were on this kind of good faith notion

that—it’s like when we, you know, you’re a constitutional professor,

you know, and we did the Constitution, we were going to get

around the federalism, and then we’d get around the slavery, and

we would get around the District voting rights, and we would get

around a lot of things. We were getting around to the whole notion

of naming an owner. We just trusted that an owner would be

named. Obviously, if we had to do it over again, we would have

made that a condition precedent to what we were doing, and that

was a tactical issue. So that’s No. 1.

No. 2, when it comes to the issue with Mr. Angelos, seems like

one party that really should have been at the table at the very beginning—my understanding is maybe they weren’t—was Comcast.

Just as I should have foreseen that there would have been issues

with not having an owner in place sooner rather than later, not

having all the Council as opposed to just a few members of Council

in place sooner rather than later, I think they should have foreseen

that there would be issues down the road that Comcast would see

this as a threat to its line of business and put up a fuss, and here

we are.

Ms. NORTON. That is why, in trying to unravel the legal questions that they have thrown on the table, I wanted to disengage

that from the notion of what people consider a ‘‘fair deal.’’ That is

not what people who are negotiating think about. Their job is to

think about the best deal for themselves, and, of course, that is

what has happened, and it may be unfair to this party or that

party, but they would not have reached a deal if their view was it

was unfair. And so you have to go on from there and move forward.

Mr. Mayor, you indicated—and I know you have said over and

over again to your constituents, you have said it publicly, that you

have been talking with Major League Baseball about the necessity

to get an owner. Could I ask you if you have had any conversations

with Comcast or anybody in your administration has had any conversations with Comcast?

Mayor WILLIAMS. The initial conversation when Comcast came—

but I’m sure they did with the other jurisdictions—let us know that

they were entering into this suit. Then there have been periodic

conversations as to the progress of the suit. We’ve had some conversations with them about what preparations there were to try to

get the games back on the air, and then thanks to the offices of

the Congress here and our friends with the fan support, this issue

is on a higher plane now, and I commend that. But there had been

some discussions on the local level.

Ms. NORTON. Comcast owes us a lot in a lot of ways. The way

they do the region, if I may ask you, Mr. Mayor, I would ask that

one of your good lawyers on the sports authority or in the city, simply back up what the chairman is doing here and the committee

is doing here today, by simply having a sit down with Comcast, a

very serious sit down with Comcast. Could I ask you to do that

soon?

Mayor WILLIAMS. Sure.

Ms. NORTON. I appreciate it. I mean I am not saying that people

have not done it, but I think that a good way to—we are trying to

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get people to understand, it is pressure. It is not legal pressure. It

is pressure that perhaps works best, and we are not asking you to

publicly criticize Comcast, but I would like, in light of what

Comcast owes the city, to have somebody sit down and talk some

turkey with them the way that I know your people have been doing

with Major League Baseball.

Mayor WILLIAMS. You know, Comcast is a good corporate citizen.

I will say that about them, and I do believe that when Mr. Dupuy

made a commitment to you and to the chairman and to others that

they would sit down and try to knock some heads together, I believe that they will do that. I think hearing——

Ms. NORTON. You are willing to have somebody sit down and——

Mayor WILLIAMS. And I would certainly echo your tough cop approach. I think good cop-bad cop’s a good thing.

Ms. NORTON. I know, Mr. Mayor, and the difference between you

and me is it comes naturally to me. [Laughter.]

Chairman TOM DAVIS. You don’t have to comment on that, Tony.

[Laughter.]

Ms. NORTON. Mr. Mayor, the whole notion of the price and that’s

all people think about, and of course, baseball is known for twisting

arms, and we know that they have extracted a terrible bargain

from everybody, so I mean, if they didn’t do it here, it would have

been probably the first of the century. But I would like to know

what you think the real financial impact, not in, you know, here

is a bunch of dollars, not having an owner is on the city? If, for

example, we had an owner today, ergo, what would now be occurring?

Mayor WILLIAMS. A lot of different things. I mean if we had an

owner today, an owner would be probably sitting in Comcast’s offices and sitting in Mr. Angelos’ office, you know, trying to get this

thing done, knowing how important it is to get those games to the

widest possible audience. Now, why is that?

Because the owner would also know that when we financed the

stadium, what were the three major revenue streams financing the

stadium? There was the ballpark fee, as everybody has come to

loathe it. Then there is the rent that the team is paying. And then

there is revenue from every—revenue taxes on everything that

moves at the stadium, purchase of tickets, hot dogs, tee shirts, you

name it. 70 percent of those folks, as you referenced and I have referenced, come from our regional friends. They are all coming into

the city coming to the game. This owner would be livid because this

owner would know that fewer and fewer people are going to come

to the games if they can’t see the games at home. As Sean was saying, if I can’t go home and watch a game every other night on TV,

I’m going to lose interest going into Washington to see the game

in person. So that’s an impact on the city.

Another impact on the city, not having an owner, is here we are

designing the stadium, right? I mean wouldn’t you want to be at

the table while this stadium is being designed if you’re paying $450

million for the team? I would want to be at the table.

And the last thing, and this is the most important thing—and

also the minority participation is important—is because an owner

can speak to the city in a way that I can’t, the Council can’t, you

can’t, the business leadership can’t. The owner can involve those

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players, get those players up on Capitol Hill, get those players up

in Northeast, talking to children, talking to people around the region, and really building regional spirit and positive feeling about

the team, which is really needed right now.

Ms. NORTON. These are very important elements. Mr. Mayor, in

light of that, do you agree—and indeed, I would ask others at the

table as well—do you agree that it was necessary to get a lease before an owner was chosen? Necessary, now.

Mayor WILLIAMS. Well, it was required formally. I don’t

know——

Ms. NORTON. Was it required in writing?

Mayor WILLIAMS. The way the negotiations became conditioned,

essentially we would approve the lease, the owner would be done,

basically——

Ms. NORTON. Was that part of the contract, Mr. Mayor?

Mayor WILLIAMS. It’s part of our agreement now that they’ve got

to have an owner I think by All-Star break, and we’ve got to have

certain things done which we’ve done.

Ms. NORTON. Yes, but I have asked you if there was a written

contract that said we have to sign a lease before you choose an

owner?

Mayor WILLIAMS. I don’t know if it’s in the contract. I don’t think

it’s in the contract.

Chairman TOM DAVIS. They made that pretty clear.

Mayor WILLIAMS. Is it? Pardon me?

Chairman TOM DAVIS. They made it very clear.

Ms. NORTON. Was that in the contract?

Mr. KOSKI. I don’t know if it was in the contract, but it was definitely clear.

Ms. NORTON. You know, if it was not in the contract—you see the

advantage that they have there. Now we are sitting here negotiating without anybody to speak for us. So if I could get away with

that, that is what I would have done too.

Go ahead, Mr. Mayor.

Mayor WILLIAMS. I think that—again, I am not their spokesman,

but I think that when they saw a couple weeks, this time I think

it will be a couple weeks, and we want to get it done this week,

obviously, if we can.

Ms. NORTON. Do you all think, given what you know about sports

and about teams waiting in the wings, about what is at stake, particularly given that there is nothing in writing in the contract that

it was necessary for everything to be done in the city, including the

lease signed before anybody would step up to become an owner?

Mr. KOSKI. I don’t think so at all. I think there was either seriously interested groups long before these things were in place, and

I think they would have relished the opportunity to make these decisions and have influence on these major components of the team

they’re about to own, absolutely.

Mr. CONNAUGHTON. I just maybe want to point out that, I mean

the Mayor, obviously, and the city were dealing with a very complicated situation in which the ownership was, obviously, from all

the league and all the owners, including Mr. Angelos, he was trying to work within that framework, which made it, I think, even

more complicated than a normal, let’s startup a team, let’s buy a

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team from an owner, and one owner moving to another. I think

that many of the issues that you all are dealing with here are a

result of the fact that you have this very complicated ownership interest, and the fact that you do have a market that this team is

being located in, and I would like to say it was the Potomac Nationals market, but it is the Baltimore Orioles market, which, believe it or not, I know our owner actually is going to get compensated because he owns the marketing rights even for the minor

league franchise here in northern Virginia.

But I have to compliment the Mayor on this, and understand

that in some ways it is trying to satisfy all these groups and still

come out with a deal, and get it through the City Council, and

making sure that Major League Baseball feels that they got the

most for their investment in this process is something that he really should be commended for.

Mr. KOSKI. The Mayor’s point that the owner should be homegrown is so unbelievably important when you figure how many bad

owners there are in baseball, where their own fans absolutely hate

the owners of their teams because they won’t stick up for them,

they won’t make the right choices, they won’t invest money. So it

could end up hurting us, but.

Ms. NORTON. Could I also ask one more question? Mr. Mayor,

will you say a final word about the effect of limited TV exposure

on the city and its revenues, and for the region beyond the cable

prices, are there any revenue implications for the region with limited TV rights? Go ahead, Mr. Mayor.

Mayor WILLIAMS. There is an effect on the team, and hence, if

there’s an effect on the team, there ultimately could be——

Ms. NORTON. Later for the team. I want to know what the effect

is on the city.

Mayor WILLIAMS. I know, I am saying.

Ms. NORTON. Oh, OK.

Mayor WILLIAMS. And because of that, then you’re going to have

depressed multiplier effect around the activity of the team, right in

sales and retail and everything else. You also have—you could depress viewer interest in sports cable, and since you have less interest in cable, there’s an effect on the city there in terms of taxes.

Mr. CONNAUGHTON. I just maybe—I don’t want to say maybe. I’m

a typical Nats fan, and that is in Virginia local government is part

time. I still work here in the city. I come into the city pretty much

every day. I’m a season ticket holder for the Nationals. But I’m in

with several other friends of mine. It means I’m not here—I may

get every third game. Obviously, I want to follow the games in between. And it’s the fact of trying to get that interest built up.

Particularly what I think is fascinating about this market and

that one of the reasons the Nationals may have been as successful

as they are last year and I think in the future, is that almost all

of us, at least in Virginia, let’s say, outer suburbs or from someplace else, and have the opportunity to come see teams that they

grew up with play the Nationals. So you’re not only getting the opportunity to serve—where people are becoming Nationals fans, they

also get the opportunity to see the teams that they grew up with.

I was a Mets fan. I used to work at Shea Stadium when I was a

kid. I’m going to be there next week for the games against the

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Mets. I’m taking my kids. But it is, when I come in here, I usually

go out to eat. I usually—obviously, we’re paying for parking. We’re

paying the taxes on the tickets. My kids all got their red hats. They

all got their shirts. Of course, they’re getting bigger, we’re going to

buy more.

I think at the end of the day it’s reaching that market, particularly I’m just going to talk from the Virginia experience. We’re

growing so rapidly, that is a natural market and a growing market,

an affluent market that you all have to reach into, and one of the

best ways is through broadcast.

Mr. DUNCAN. We think it strengthens the district, strengthens

the region, and sports teams, particularly, that you all have mentioned have a really unifying effect on this entire region, whether

it’s George Mason’s team, the University of Maryland Terrapins

winning, the women’s national championship, the Redskins, the

Nationals. The stronger the team, the stronger the region.

Chairman TOM DAVIS. Let me just thank this panel. Thank you

very much. I want to thank you all for your patience sitting

through—I see how frustrated you are sitting out there in your respective roles as head of your country governments, and the fan

club, with these groups. Hopefully, this hearing will help bring

them closer together, and let’s just keep the heat on. Thank you.

The hearing is adjourned.

[Whereupon, at 4:32 p.m., the committee was adjourned.]

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