State approves Maryland Stadium Authority settlement with Orioles
Posted: 1:52 pm Wed, November 17, 2010
Daily Record Business Writer
The state approved on Wednesday a $913,000 settlement with the Baltimore Orioles, finally putting to a rest a dispute over stadium rent that has simmered for six years.
The deal also modifies the team’s lease of Oriole Park at Camden Yards, ensuring the Maryland Stadium Authority — the team’s landlord — will see revenue from the advertisements located behind home plate in the ballpark for the remainder of the lease.
Comptroller Peter Franchot singled out the advertising deal, but not to question the price tag or press the authority for details on how it came to the agreement.
“It just caught my eye because everyone else who negotiates with Mr. Angelos [Orioles owner Peter Angelos] gets nothing,” Franchot said.
After the deal was approved by the stadium authority Nov. 9, a club attorney called the settlement “a fair and equitable resolution.”
The dispute centered on advertising boards installed by the team on the wall behind home plate. The Orioles argued that because the ads are directed at the television audience, they were not covered under the team’s lease. The team website calls the space “the most valuable advertising real estate in baseball.”
The Orioles pay rent to the authority for use of the state-owned sports complex based on stadium revenues, including 25 percent of the in-stadium advertising dollars. Under the agreement approved Tuesday, the team will pay the state 12.5 percent of future revenue from the home plate advertising, or about $200,000 per year.
The authority had pursued a cut of the revenue from the first three years of the ad boards were in use, but gave that up as part of a 2007 agreement on how to pay for new video boards at the park. For 2007 and 2008, a state audit reported, the state’s 25 percent share of that advertising would have been about $812,000. And in 2009, the state should have seen another $400,000, according to the authority.
Stadium Authority Executive Director Michael J. Frenz said the $913,000 payment was likely better than what the state would have gotten if the issue had gone to arbitration.
The settlement does not cover the potential for the team to replace the physical ads with virtual ones added to game broadcasts by computer, an option that could leave the authority without any ability to collect a share of the revenue and one the team has repeatedly raised during the dispute.