More pro teams getting new, rich leases on life Baltimore joins trend in lucrative stadiums

March 09, 1996|By Jon Morgan | Jon Morgan,SUN STAFF

If you think Art Modell got a sweet deal to bring his football team to Baltimore, consider the bounty bestowed on Georgia Frontiere.

The Rams owner moved her team from Los Angeles to St. Louis last year to play in a newly opened, $260 million stadium with a rent so low it won't even cover the city's outlay for hiring ticket-takers, ushers and other game-day costs.

In Jacksonville, Fla., the Jaguars not only will enjoy low rent, but they also won't have to make their first payment for five years, even though the city is picking up all game-day expenses.

And the Orioles are playing under a revenue-sharing formula at Camden Yards that, despite the team's near-record success at the box office, has brought in almost $3 million less than what the state has paid to run the stadium since it opened in 1992.

In a trend that seems squarely at odds with the nation's conservative mood, cities have anted up huge, ongoing public investments for private sports franchises.

Supporters say it is the cost of joining or remaining in the major leagues, and tout the advantages of national exposure, community cohesion and spinoff spending by fans flocking to reinvigorated downtowns.

Opponents say it amounts to a taxpayer subsidy of wealthy team owners and millionaire players.

There's little sign of a slowing. An unprecedented building boom is going on in sports, with more than $2 billion worth of stadiums, arenas and ballparks either opening in recent years or scheduled to be built before the end of the century. Most are being offered on terms so tempting that they raise painful questions of costs and benefits.

"It's a matter of when you sit at the bargaining table, who has the leverage? The teams have the leverage," said Martin J. Greenberg, director of the National Sports Law Institute at Marquette University, who is writing a book on teams' leases.

L And the trend is moving in the direction of teams, he said.

"It's based on precedent. You want whatever the last guy got. When I look at the Chicago Bears' lease of 20 years ago and the Baltimore deal, it's night and day," Greenberg said.

Under terms hammered out during Baltimore's failed bid for an NFL expansion franchise, Maryland will use its tax-exempt borrowing powers to build a nearly $200 million stadium and adjacent parking for Modell's team, formerly known as the Browns. The Maryland Stadium Authority also will set up a $600,000 fund for capital improvements.

The franchise will keep all the profits, except for taxes, and will reimburse the state for the $3 million to $4 million a year required to operate the stadium. The team will act as stadium promoter, booking events during the off-season, paying itself a 10 percent management fee and splitting any profits with the state (the team covers any losses).

"We were in the game, but we didn't make the rules," said Herbert J. Belgrad, a Baltimore attorney who was chairman of the Maryland Stadium Authority when the decision was made to build new stadiums for both baseball and football and lease them on lucrative terms.

Anything less would not have succeeded in returning the NFL to Baltimore, he said. And the state could have lost the Orioles, just as it lost the Colts, if it hadn't replaced outdated Memorial Stadium. The baseball team refused to sign a long-term lease until Oriole Park was built.

Experts who follow trends in stadium leases say the new Baltimore football lease is among the most team-friendly in the business, probably surpassed only by the incentives that convinced the Rams to move.

But neither is exactly in a league of its own. Nashville convinced the Houston Oilers to move to town by promising a $195 million stadium and a rent arrangement identical to Baltimore's. Jacksonville agree to renovate the Gator Bowl and to pay for all the operational costs. The team's rent is low and it can defer payments for the first five years.

Even the Carolina Panthers, financing their own stadium, relied on generous public investments. The team is building its stadium with $140 million worth of seat licenses bought by fans. But the city, county and state government spent $55 million acquiring and preparing the land for it in downtown Charlotte, N.C.

Experts say the St. Louis deal, negotiated with the pressure of competing offers from Baltimore and Anaheim, is probably the ++ sweetest of all.

St. Louis gave the Rams game-day use of their facility, a convention center annex that doubles as a domed stadium. The team pays $250,000 a year, 25 percent of the stadium advertising, and half the game-day operational costs of the stadium.

And the team gets 75 percent of the $1.3 million a year that TWA pays to put its name on the "Trans World Dome" and call itself the Rams' official airline -- meaning the Rams get back more in stadium revenue then they pay in rent.

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