Opening the Orioles’ books? Much could be learned if John Angelos kept his promise

Whether it was intended as a promise or a distraction during his rant on Martin Luther King Jr. Day, Orioles Chairman and CEO John Angelos dangled a significant carrot to the local media instead of answering baseball questions.

He invited the group to the Orioles’ headquarters “next week” and promised to “show you the financials of the Orioles. I’ll show you the governance of the Orioles. I’ll show you everything you want to know, and I’ll (answer) all your questions.”

That was last Monday. This Friday will be the end of “next week.” And, despite multiple requests from the media, no meeting has been set with Angelos to review the financials. All the Orioles have said so far is there’s nothing yet to report.

Here’s the exchange between The Athletic’s @danconnolly2016 and Orioles CEO John Angelos regarding his family’s future with the team. pic.twitter.com/k577Ya9D7f

— Paul Gessler (@PaulGessler) January 16, 2023

This, of course, is not a surprise. John Angelos has never been forthcoming in his role as the club CEO. The books have never been fully open for the media in his family’s ownership tenure — and the Orioles are not alone there. With the exception of the Atlanta Braves and Toronto Blue Jays, who are publicly traded, no MLB team is required to open its books. Therefore, teams don’t, unless it involves special circumstances such as reviews by potential buyers. There is no rule forbidding an MLB club to open its books, but the action would be unpopular among the sport’s owners.

Combine that with the reality that Angelos and his mother, Georgia, are being sued by his younger brother, Louis Angelos, who claims he has been pushed out of the family’s business and eventual inheritance, and that the Orioles are still in a bitter legal dispute with the Washington Nationals over television rights fees — it seems more likely the frugal Orioles will sign Shohei Ohtani to a $400 million deal next offseason than open their books during this one.

Still, a look at the Orioles’ finances and governance would be paramount in understanding this organization, its buying and spending practices, and its future.

There are some nuggets that can’t be gleaned by open books, such as the status of the pending stadium lease or whether the club is legitimately pursuing a high-level starting pitcher via trade.

Here, though, are some of the most important questions that could be answered with a detailed look at the Orioles’ finances.

How much profit did the Orioles make in 2022 and how does that compare to the pandemic years of 2020 and 2021?

Last season was the first “normal” one for Major League Baseball since 2019. Obviously, the entire league took a major hit in the truncated 2020 season and the attendance-limited 2021 campaign. But the sense is the Orioles, who drew 1.37 million to Camden Yards in 2022, their highest attendance since 2018, did fairly well last year given their low payroll and tremendous turnaround on the field.

But how well? How much more than what they made in 2021, when the recorded attendance was nearly half (just under 800,000)? Having that information accessible would go a long way to proving — or disproving — how much of a hit the franchise took because of the pandemic.

What is the annual budget, specifically for baseball operations?

Peter Angelos, who has not run the team since being incapacitated in 2017, famously didn’t give his baseball operations executives a true budget, but instead formulated it on a case-by-case basis. He’d make money available for the acquisition of one player but maybe not for the signing of another. There wasn’t a pool of money from which a general manager could operate as long as he stayed on budget.

It’s believed Mike Elias works with a more traditional, budgetary blueprint, but what is it? And how much room does he have to add salaries? The Orioles are projected for a payroll of roughly $65 million in 2023, which likely will be the second-lowest in the sport.

How much money have the Orioles received in revenue sharing, national TV contracts, gambling contracts, the sale of interactive media and other league-wide windfalls? And where does that money go?

With all of the different avenues of league-wide revenue available to big-league teams — especially “small market” ones — it seems disingenuous for clubs to cry poor. All teams are guaranteed at least $60 million in national TV revenue, and, in November, MLB sold what was left of its internet arm to Disney for $900 million, which is to be dispersed among the clubs. Then there is annual revenue-sharing, which benefits an organization like the Orioles. So how much have the Orioles received from these endeavors? And how is that spent?

How much does MASN bring in and is it accounted for as a separate entity?

When the Orioles first discussed creating a regional sports network that would also encompass the new team moving into Washington D.C., a then-club official proclaimed the creation of the Mid-Atlantic Sports Network would bring in so much revenue the Orioles would be able to compete with payrolls of the New York Yankees and Boston Red Sox.

Well, that hasn’t happened. Not close. MASN appears to be a colossal disappointment from a what-it-could-be standpoint. It has almost no original programming; the quality of game production lags behind similar networks, specifically with graphics and technology; the advertising pool appears limited; and the highly anticipated app isn’t user-friendly or widely accessible.

Yet, MASN may make significant money, given that its primary product is Orioles/Nationals games — with the Orioles owning about 80 percent of the network. So how much money do the Orioles receive annually from MASN profits, and are they accounted for as a separate entity, since Orioles and MASN management appear at times to be one and the same?

How much is MASN paid annually by providers, such as Comcast or DirecTV, for carrying the network?

This may seem incidental, but it’s actually rather intriguing. One major complaint waged by fans against MASN/the Orioles is the lack of a streaming option for those who have cut the cable cord or don’t subscribe to another provider. The MASN streaming app can be used only by those who have an account with a provider.

The reason given is that MASN receives a large fee from the providers, which would disappear or be reduced dramatically if direct streaming were available to consumers. For individual customers to make up that revenue for MASN, the cost per user would be astronomical. So, what is MASN generating in revenue from those providers? And, based on that, what might the cost be per user for a streaming app? The Orioles say they are still working on a direct-streaming solution and should have one in the near future, but that time isn’t here yet.

How much is in escrow for the MASN dispute?

The Orioles reportedly have at least $100 million in a private escrow account, which has been earmarked for eventual payment to the Nationals. That makes sense, of course, because the team doesn’t want to suddenly be on the hook for a large sum that must be forked over. But is there more in escrow, which would give a glimpse as to what the Orioles could owe when — or if — the MASN rights fees’ dispute ends?

What is the ownership breakdown?

When Angelos made his promise to show the books, he also said he would offer information on the governance of the team. And that’s been a bit of a mystery over the years as ownership stock exchanged hands. During his news conference, Angelos said his family owns “over 70 percent of the Orioles.” In Louis Angelos’ amended complaint filed this week, the younger son alleges that in December 2021 his mother and brother bought additional ownership in the team without his knowledge, which he claims breaches the provisions of his father’s financial trust.

So, who owns what? How many limited partners are there? Who is second in line behind the Angelos family?

How much does John Angelos pay himself?

There were two particularly noteworthy allegations in Louis Angelos’ amended complaint this week. One, in the suit he claims his mother and brother drained nearly $65 million from his incapacitated father’s personal account for their own use and/or to protect it from creditors. That’s the most incendiary allegation.

But Louis Angelos’ suit also claims John considered himself one of the most experienced and astute business executives in all of baseball and felt he was grossly underpaid. Quoting a missive written by John Angelos in 2015, the suit alleges he made $175,000 annually from the Orioles in salary and another $225,000 in salary from MASN. Since his father’s illness, the suit claims, Angelos has given himself lucrative raises in an “ambitious money grab.” The unilateral raises since then, including his current salaries from the Orioles and MASN, have been redacted in the court filing and surely wouldn’t be shared by Angelos with reporters in an “open books” session. But it would be fascinating to see what he believes is his worth as the top executive.

And what about everybody else? What do members of his senior executive team — which Angelos hand-picked — make, and how does that compare to their underlings in an industry that typically is stingy to its everyday workers? When was Louis Angelos last on the payroll? Who else is on the payroll?

What is the salary and contract schedule of Mike Elias?

This dovetails with the salaries of the senior executive team, because Elias is part of that as vice president of baseball operations. But this one goes beyond financial curiosities, since Elias’ contract length is tied significantly to the team. Details of his contract have never been reported, but it would be fairly standard if he had agreed to a five-year deal when he inked it in November 2018. That means this, theoretically, would be his walk year. The sense is his original contract already has been extended, but that hasn’t been confirmed.

Bottom line: If, as expected, this week passes without John Angelos holding a media session, it will further cement the Martin Luther King Jr. Day conference as an abject public relations disaster. Not only did he go on the offensive about being asked baseball questions during a press event he called, but he also will have made a public promise he didn’t keep — and put a deadline on it. It’s a shame, too, because showing so much transparency would have been refreshing for an organization that has often worked in the shadows — a concept that has been pushed further into the limelight by an ugly, internal battle for power that’s now in the court system.

(File photo: Steve Helber / Associated Press)