Is Ravens' lease best? Moag says no MSA head denies report, cites Rams, Bengals deals

October 28, 1998|By Jon Morgan | Jon Morgan,SUN STAFF

The Ravens have a good deal with their stadium, but it's not the best in the NFL, says a top state official.

The SportsBusiness Journal, a weekly publication based in Charlotte, N.C., this week ranks NFL teams according to the value of their stadium leases. Baltimore's team, which pays no rent, is No. 1 on the list.

But Maryland Stadium Authority chairman John Moag says the listing is flawed in its methodology. The Ravens pay no rent, but reimburse the state for operation and maintenance of the stadium, which is expected to be $4 million to $5 million a season.

The lease was structured this way to accommodate regulations regarding the taxability of revenue bonds. If the lease called for rent payments, income earned by investors on the bonds used to build the stadium would have been taxed and the state would have had to pay higher interest.

Some teams pay a flat rent or one based on revenues that don't cover the stadium costs. The Orioles, for example, pay as rent a percentage of various revenues. Despite the team's attendance success, its rent at Oriole Park has never covered the state's costs in operating the stadium.

"The analysis is first of all simplistic and secondly plain wrong," Moag said. "It fails to recognize and include the other half of the lease equation: the team's costs."

Moag agrees, however, that the Ravens' lease is among the most team-friendly in the NFL.

He said it would probably rank in the top quarter of the 31 franchises (including the new Cleveland Browns, who will begin play next season), but would fall below several other deals, including those signed by the St. Louis Rams and the Cincinnati Bengals, who pay their landlords even less.

Independent experts rank the Ravens' lease among the most lucrative in sports, even if it's not No. 1.

The team keeps all revenues derived from NFL games at the stadium, except for a ticket tax, and splits with the state any profits from non-NFL events held there.

Pub Date: 10/28/98

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