Thanks to the quick work of the Maryland Stadium Authority’s public records request officers, I now have a copy of the Baltimore Ravens‘ new 15-year lease extension that they’ve agreed to sign in exchange for getting to tap into $600 million (and up — more on that in a second) in state funds for stadium upgrades. Let’s dive in and see if it can help us answer some of the questions that were left unanswered when the lease deal was officially announced last week:
Is this really $600 million in state spending as originally announced last April, or could it be a whole lot more?
Section 7.01 specifies that the MSA can “have outstanding at any one (1) time up to Six Hundred Million and No/100 Dollars ($600,000,000.00)” in bonds. So that confirms what was first reported last September: As old bonds are paid off, the state can turn around and sell new ones so long as the total debt stays under $600 million, making this a virtually bottomless pool of money that the Ravens owners can access. (If you’re wondering what this looks like in practice, see the entire career of Robert Moses, which relied heavily on establishing a debt cap and then spending the same money as many times as he saw fit, without ever having to go back to ask the government to allocate more.)
What kind of capital projects will the Ravens owners be allowed to use the state money for? And will they be allowed to use that to cover items that they would otherwise have to spend their own money on as maintenance costs?
The actual list of what state money will be spent on will, it appears, be decided jointly by the Ravens owners and the MSA, neither of whom have any incentive to be conservative about doling out state cash, since the bottomless slush fund is already sitting there. The lease does, however, spell out in particular a list of “Initial Capital Works” already agreed on, which runs for four pages (see Exhibit 4 at the end of the lease) and includes: new “fan hospitality structures,” a new parking garage, “enhanced suite level lobbies,” new audio and video and “branding” on the concessions concourses, new carpeting and furniture in the stadium clubs, moving the press box to the top of the stadium and replacing it with new private suites, replacing elevators and HVAC, upgrading all the video production facilities to 4k, new ribbon ad boards, and a whole lot more.
As for whether that will enable the team owners to skimp on maintenance: Probably, if only because you don’t have to repair old elevators when you can replace them with new ones. There’s also a requirement that if the stadium is “damaged or destroyed in whole or in part by any Casualty,” the state is on the hook for rebuilding it, and while I’m not saying Ravens owner Steve Bisciotti would resort to blowing up his own stadium in order to get a brand-new one, the past history of NFL owners probably means we shouldn’t entirely rule it out.
Will the Ravens owner be outright prohibited from moving the team for the next 15 years, or just have to pay a penalty if they do so?
If the Ravens try to leave — termed “relocation default” in the lease — the MSA can either seek a court injunction to stop it or force the team to pay liquidated damages. That’s fairly solid, but obviously it’d be up to the courts to determine whether the team could be forced to stay, or exactly what the team owners would have to pay if they did skip town.
Since the lease won’t be allowed to expire while there are still outstanding stadium bonds, does this mean the stadium bonds will need to be short-term ones, no longer than 15 years? Or that the team will be tied to Baltimore for longer if the MSA decides to sell longer-term bonds?
The term of the lease is 15 years, full stop, “unless earlier terminated or extended,” so it’s not like the Ravens can be forced to stay indefinitely while the bonds aren’t yet paid off \. There is a clause saying that “in no event shall any Bond Maturity Date extend beyond the then-current Expiration Date,” so from the sound of things any new expenses incurred toward the end of the lease will need to be funded by super-short-term bonds — which would create a lot of pressure on the state budget to pay them off fast with higher annual payments.
Add it all up, and there’s a little bit of “not quite as bad as it could be” along with a whole lot of “yep, just as godawful as we were afraid of.” I am not enough of a bond expert to guesstimate how much money Maryland taxpayers could be out in total by the time all the self-replenishing bonds are sold and re-sold, but it seems likely it could easily cross the $1 billion threshold, especially if the Ravens do a five- or ten-year lease renewal that would give them more time to request additional spending. And even at just $600 million for 15 years, we’re talking the most expensive per-year lease extension subsidy in sports history — all for new carpets and “hospitality structures” that will get well-heeled fans to open their wallets to pay the Ravens owners more for club access. Being an NFL owner is nice work if you can get it, let’s just leave it at that.