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November 10, 2010

Orioles stadium-ad settlement hurts taxpayers

What Maryland Stadium Authority executive director Michael Frenz told reporters last night may be true: Cutting the state's take of Orioles' home-plate advertising in half might be the best deal the state could get. The lease says the state gets 25 percent of all ballpark ad revenue. The state, subject to approval by the Board of Public Works, says it'll settle for 12.5 percent from the home-plate ads.

The team argues, ridiculously, that the ads fastened to the wall behind home plate are really TV ads, not ballpark ads. Therefore the Orioles don't have to share (as much) revenue from those video billboards. But the state has its hands tied: Such disputes must be settled by arbitration, not lawsuits. So perhaps the settlement was inevitable. What's disappointing is that, as the Daily Record reports, "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 referenced in the dispute."

The potential for virtual home plate ads, of course, was the Orioles' primary leverage in achieving this concession. If the settlement indeed doesn't address this issue, it leaves the team free to apply that threat again, in the future.

Here is a September column on the dispute.

Posted by Jay Hancock at 10:42 AM | | Comments (3)
Categories: Corporate welfare
        

Comments

Maybe we will finally learn from all these complications and realize that funding sports stadiums with taxpayer money isn't the best idea in the world...

It'd be better if they removed the ads altogether from behind home plate and put them somewhere else (maybe along the 1st and 3rd base lines instead?). It's a shame that such a beautiful stadium is getting covered in advertisements. I feel the same way about Fenway and it looks like Wrigley is heading in the same direction.

er I'd be inclined to say that the team argues, NOT ridiculously, that the ads fastened to the wall behind home plate are really TV ads.

As they are.
As are the electronic ads superimposed by blue screen effect

I don't think agree that this is a basis to adjust the revenue split however. But the current market more than makes up for reasons to do so.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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