State approves settlement with Orioles
Posted: 7:05 pm Wed, November 17, 2010
Daily Record Business Writer
ANNAPOLIS — 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 during the Board of Public Works meeting, 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.
Also Wednesday, the board retroactively approved 61 contracts totaling $171 million, but not before slamming the Department of Juvenile Services for its sloppy oversight of the deals.
“It predates you,” Treasurer Nancy K. Kopp told Secretary Donald W. DeVore, “it predates your predecessor, but for it to becoming up again with  contracts …”
“It really end-runs the BPW review process,” Franchot said.
Some of the three-year contracts date back as far as July 1, 2008, and cover a range of residential and non-residential services for youths in the DJS system. They include foster care, group homes, home-based therapy and independent living programs.
DeVore said there are “no excuses for this.” He said he made personnel changes as a result of finding the backlog of unapproved contracts and has implemented a new contract tracking program.
A state audit released in September found the department was deficient in monitoring its contracts for juvenile care, both in getting the contracts to the Board of Public Works and ensure they did not exceed the allocated funds.
Kopp and Lt. Gov. Anthony Brown voted in favor of the retroactive approval, while Franchot cast a “nay” vote “out of a sense of protest.”
“You may just be the latest in the long line of retroactive requests,” Franchot said, “but I’m fed up with it.”