One of the big questions surrounding the Baltimore Orioles‘ new sweetheart lease deal is how much the development rights to land surrounding the ballpark, which under the lease will be granted to the team owners for just $94 million of 99 years, is worth. Earlier this month I estimated that, along with absolving the O’s owners from paying rent in exchange for taking on maintenance costs, the land transfer could be worth more than $100 million — on top of the $600 million, and maybe even more than that in the future, that the Angelos family is getting in state cash.
But on Friday afternoon, the dead zone of the news week, the Baltimore Sun dropped an analysis that sheds more light on how much handing over Camden Yards’ famous warehouse to the team could end up costing taxpayers:
The stadium authority retained Crossroads Consulting and Entreken Associates Inc. in 2019 to provide economic advisory services regarding the historic, 430,000-square-foot building. The consultants’ report, obtained by The Baltimore Sun, said that if the warehouse is converted to a hybrid of retail, hotel, apartment, and/or office space — at a cost ranging between $16 million and $36 million — it could produce net operating income of $4.6 million to $7.1 million annually.
That’s a good bit more lost income than the $3.7 million the state got from renting out warehouse space in 2022. The Sun wasn’t clear if that projected net operating income would rise over time and if so how much, but even if it wouldn’t, we’re talking about between $70 million and $110 million worth of future revenue that the state is handing over to the Orioles. Add in maybe $40-50 million from the free-rent deal, and we’re suddenly looking at upwards of $150 million in lease revenue being transferred from the state to the Orioles on top of $600 million or more in state cash.
The Sun contacted a bunch of sports economists about what they thought of this deal, and none minced words:
- The team’s $94 million in payments over 99 years come to “a trivial amount of revenue,” says Geoffrey Propheter of the University of Colorado.
- It’s “a pitiful amount of money,” says Dennis Coates of the University of Maryland, Baltimore County.
- The foregone development income, meanwhile, is “a lot of money,” says J.C. Bradbury of Kennesaw State University. “This is essentially gifting the land to the Orioles.”
So to recap: The Maryland legislature approved with no public notice $600 million in cash for the Orioles, then tacked on what could be a bottomless pool of additional future state money, and now has added about $150 million in rent breaks and development rights. Whatever else you want to say about it, that’s some astoundingly bad negotiating just to get a mere 30-year lease extension that Angelos hasn’t even formally agreed to yet. I’m not sure what else the Orioles owner could even ask for at this point — residuals on reruns of “The Wire,” maybe? — but if he comes up with something, it’s a good bet that the state of Maryland will be quick to provide it.
Not really related, but a brilliant idea I just read elsewhere —
A very, VERY basic negotiating term public officials should insist on is that the games be broadcast on-air, on an old-fashioned TV station you can pick up with an antenna.
I’m sure channel 29-5 or whatever would happily pony up a few million for the rights. And the team could still sell cable/streaming rights to some Sinclair subsidiary or Apple or whogivesafart.
But make a free viewing option available to the people who paid for the thing!
If they want to broadcast games for free, they should put them on a free app and/or website. That would be accessible to a lot more people over a much wider area.
Where I live in a valley, it’s actually really hard to get anything through the air. Always has been.
They should be able to do both. They’ll still make money off of the ads.
I don’t know how it would work, but there should be some kind of team salary tie in with all this money in the state of shoveling to Angelos. The Orioles should be somewhat responsible for putting a competitive team on the field, instead of developing young talent and having them grabbed up my Red Sox, Yankees, or any other team with deep pockets.
John Angelos is on record stating that the Orioles will be unable to sign their young talent to long-term deals without raising ticket prices.
Yeeeeah, that is not how ticket prices work. If Angelos could maximize revenues by raising ticket prices, he would do so regardless of whether he needed it to re-sign Adley Rutschman.
There are several things that the Angelos family could have done to add incremental revenue:
• Sell naming rights to the stadium. This should have been done decades ago when naming rights were de rigeur. Baltimore doesn’t have a lot of major businesses and they’re in the middle of lease negotiations, but they could parley the team’s success into a few million dollars every year.
• Get a sponsor for the uniform patch.
• Have more than one concert a decade. Fenway, Wrigley, Citi Field, and Citizens First have had summer concerts for years. I believe that Fenway has had as many as 11 in a summer.