I don’t know how you spent your weekend, but part of mine was dedicated to going through 299 pages of documents I received from the Maryland Stadium Authority about how the state determined the Baltimore Orioles‘ annual lease payments for 2022. As you may recall, the O’s annual rent is calculated according to a complex formula — 7% of net ticket revenues, 7.5% of most concession revenues, 50% of net parking revenues, 25% of net ballpark ad revenues, 10% of suite revenues, and 7.5% of club seat revenues, among other things — and it’s been unclear how closely the state vets the team’s numbers for these items. So I filed a a public records request, and this is what I got back.
Let’s dive in and see what turned up:
The first 208 pages are just the Orioles’ lease at Camden Yards from 1992, much of which has nothing to do with rent payments. (Though it is fun in a way to learn things like that the Orioles had a separate agreement with Sony to provide “certain television and other video equipment” for the stadium.) Most of the good bits in that regard are in Article IV, which spells out that:
- Net admissions revenues are after deducting ticket taxes and revenue sharing with the league and visiting team.
- Concessions revenues are gross revenues paid to the team by its concessionaire.
- Net ad revenues are after deducting agency fees and commissions, plus “reasonable and necessary expenses” for building and installing ad panels.
- Net suite revenues are after deducting taxes and other suite payments like for tickets and parking that are covered elsewhere.
That’s all reasonable enough. The Orioles also have a state-of-the-art clause, though at least it’s limited to requiring that the stadium needs to be held to the “maintenance and repair standards” of the top 25% of baseball stadiums, not to have the amenities of the top 25%. Still, it does raise the question: If all stadiums have to be in the top 25%, what happens to the three-quarters of stadiums that are in the bottom three-quarters at any given time, given, you know, math? One would think that some stadium district lawyers might have thought of this, but then, knowing local government lawyers, maybe one doesn’t.
As for the reporting, the Orioles management has to provide the stadium authority with a written schedule showing how it calculated the team’s rent, prepared in accordance with generally accepted accounting principles. A sample report is included as Exhibit D, and looks like this:
Unfortunately, there are no examples of filled-out forms. And most of the rest of the documents are also from 1992, so aside from marveling at the one with signature spaces for both Larry Lucchino and Sargent Shriver, there’s not much else here. And the MSA’s cover letter probably explains why:
In connection with MSA’s 2022 rent audit, the Orioles provided numerous records that identify and document certain actual annual revenue streams generated from conducting games and events at Oriole Park in 2022. These records (e.g., admission gate receipts, concession revenues, audited financial statements, etc.) comprise confidential commercial and financial information of the Orioles, and accordingly, MSA is precluded from disclosing them pursuant to GP § 4-335.
So, the Orioles pay rent based on their revenues, but those are confidential. Meaning you’ll just have to trust that the stadium authority is keeping track of them accurately, just like the stadium authority trusts the Orioles to fill out their revenue forms accurately. Trust! It’s the basis of all human interaction, and why we have never had need of things like “contracts” or “laws” or “oversight.”
Sorry if this is disappointing in terms of revelations, but look at it this way: At least you didn’t have to look at 299 pages of documents before getting to it. “Explaining Lack of Transparent Government Since 1998,” that’s our motto, at least since the better one was already taken.
Interesting that all of the alleged revenue streams to the state/stadium authority are based on percentages of “Orioles net”.
That seems like a horrendous decision (more or less on par with lesser actors accepting a fraction of 1% of a film’s “net” as part of their compensation… you’d better include a clause that prevents that 1% from being less than zero or you will run afoul of Hollywood’s most creative talent area… accounting…).
Accepting a smaller percentage but having this come from the gross revenue would be a much more effective (and traceable) strategy.
And even bad lawyers and accountants know that.
As noted in the first set of bullet points, the “net revenue” calculations don’t leave a ton of room for creative bookkeeping (with the possible exception of ad board construction costs). I’m more concerned with whether the state is vetting things like, say, handling fees for suite purchases, or in-kind payments for ad boards, or any of a million other ways the Orioles could be collecting revenue but not including it in their reports.