O's will wait on seeking lease changes Any 'parity' revision won't come until Browns' deal final

Windfall is questionable

How stadium authority paid differs in 2 deals

November 17, 1995|By Peter Schmuck | Peter Schmuck,SUN STAFF

The sweetheart stadium deal that lured the Cleveland Browns to Baltimore could lead to changes in the lease between the Orioles and the Maryland Stadium Authority, but it is unclear whether the terms of the "parity clause" in the Orioles' lease will add up to a windfall for the baseball team.

The clause allows the Orioles to request modifications in their Camden Yards lease if they believe it is not comparable to the agreement negotiated between the Browns and the stadium authority. There are several areas in which the Browns' lease appears to be superior, so it seems likely the Orioles will attempt to renegotiate their lease. But it could be months before the Browns' lease is complete and fully analyzed by the Orioles' legal staff.

"The lease with the Browns is subject to NFL approval, and it's all of 27 pages long," said stadium authority counsel Alison Asti. "It's 27 pages, and the Orioles' lease is 100 pages plus, so there's still a lot of work to be done. I'm not sure it would behoove them to look at it before it's complete."

Orioles officials agree, but the major points of the Browns' lease already have been made public, and there are several areas that may be open to renegotiation.

The preliminary draft gives the football team 100 percent of concession, parking and private suite revenues, money that the Orioles share with the stadium authority. The Browns' stadium deal also calls for more luxury boxes and construction of a training facility, which could prompt Orioles owner Peter Angelos to demand major financial concessions to achieve parity.

None of this is imminent, however, because the Browns' lease is not complete and the team will not move into the new stadium until 1998.

"It's a little premature," said Orioles vice chairman Joe Foss. "The [Browns'] deal isn't done yet, so it's too early to completely assess it. I wouldn't expect that we would begin looking at it until the deal is done. Otherwise, we'd be negotiating over hypotheticals."

There is no dispute over the baseball team's right to a comparable contract. The Camden Yards lease agreement states that "MSA and the Orioles intend for there to be a parity between the terms of this agreement and the terms of any similar agreement made by MSA or another Maryland public agency with a National Football League football team with respect to the Football Stadium proposed for construction on the Camden Yards site."

The lease goes on to say that the Orioles are entitled to any rent reduction or tax break offered to the football team and that they have the right to request changes in their lease to make it comparable to the one signed by Browns owner Art Modell. If the stadium authority declines to modify the lease, the Orioles would have the right to submit the dispute to arbitration.

The major difference in the two agreements is the way that the stadium authority is compensated for the use of the stadiums, but the method by which the Browns will pay apparently would not work to the Orioles' advantage.

The Orioles pay the stadium authority a percentage of revenues for the use of Oriole Park -- a figure the MSA estimates at about $5.3 million for a full baseball schedule. The stadium authority pays to maintain and operate the facility. The Browns' lease calls for the team to pay stadium operating expenses in lieu of rent.

Because the stadium authority has estimated that operating costs for Oriole Park will be $7.7 million next season -- or about $2.4 million more than the Orioles' projected rent payment -- it seems highly unlikely that the baseball team would attempt to negotiate a change in the way it pays for use of Oriole Park.

"I think that's correct," said stadium authority chairman John Moag. "My guess is that in the final analysis, Peter will want to stay with what he has, but he has the right to sit down and go through the issues he wants to go through and we'll be happy to do that."

The numbers for a football stadium figure to be quite different, because the Browns will use the new stadium for just a couple of preseason games, eight regular-season games and -- at most -- two or three playoff games per year. The Orioles play 81 regular-season games at Oriole Park.

Stadium authority officials only can estimate what annual operating expenses will be for the new football stadium, but the figure projected in Baltimore's NFL expansion application was $3.4 million. That figure likely would be closer to $4 million by the time the new stadium is completed.

Angelos has been supportive of efforts to acquire a football team for Baltimore. He even tried to put together his own deal to purchase the Tampa Bay Buccaneers. But the arrival of the Browns figures to have a negative economic impact on the Orioles, even if it eventually leads to improvements in the club's stadium lease.

The Orioles have held a near monopoly on the professional sports economy since the Colts left Baltimore in 1984. Now, they will have to share the market with an established NFL franchise that will be selling expensive seat licenses and luxury boxes to the same people who have supported the Orioles so well.

The presence of the Browns in the same sports complex also could lead to some minor scheduling conflicts, because the football lease gives the Browns scheduling parity with the Orioles with respect to regular-season games. The Orioles will have scheduling priority for postseason play, but it is largely a parking and logistics issue, because the teams will occupy separate facilities.

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