Maryland should fight for Orioles ad revenue share

September 13, 2010|By Jay Hancock

Perhaps we should be grateful that the Baltimore Orioles may give Maryland taxpayers even a fraction of the revenue from the advertising behind home plate.

You've seen the billboards. Ads for stores, gasoline, tires, satellite TV and fast food right behind Nick Markakis and Matt Wieters when they do their thing. The ads, displayed on video boards and sold in half-inning segments, generate more than $1 million a year.

The state, through the Maryland Stadium Authority, is supposed to get a piece of that. But for years it has gotten less than it's owed, leaving money on the table and increasing what the Orioles and owner Peter Angelos cost the taxpayers.

It's another demonstration of the perils of public financing of sports stadiums and a lesson in how media boundaries are being shattered.

When is a ballpark billboard really a TV ad? Answer: When the cameras linger so long on the "pitcher-to-catcher signage position" that it's not just stadium scenery but becomes imprinted on the brain of the guy watching in Glen Burnie. At least that's what the Orioles argued in withholding hundreds of thousands of home-plate advertising dollars from the stadium authority in recent years.

The team's 30-year lease says it must pay a fourth of all stadium billboard revenue to the stadium authority, a state agency. But a few years ago the Orioles stopped honoring that deal for the home-plate ads, which get the most camera time. Those ads were directed mainly at TV watchers, not ticket-buying, seat-warming fans, they argued.

Considering the scarcity of the latter in recent years, perhaps it was understandable that the team and its sponsors are looking harder for eyeballs outside Camden Yards.

But the lease seems clear. Billboard-revenue sharing is part of the payback for Maryland taxpayers who built the stadium for more than $100 million. A few years ago, state auditors started hassling the stadium authority for not aggressively dunning the Orioles for the missing money. Back then the two sides temporarily settled the dispute as part of an agreement to build a new, high-def scoreboard in center field.

Now the problem is back. In May the Office of Legislative Audits again criticized the stadium agency, saying it had done nothing to collect $812,000 owed by the Orioles for home-plate ads during 2007 and 2008. The state and the Orioles have reached a new settlement, but the stadium authority says it won't reveal the details.

"We have not made the terms public because they have not yet signed it and our board has not yet approved it," says Maryland Stadium Authority Executive Director Michael Frenz. The Orioles won't disclose them either.

Presumably details will emerge when they're voted on by the Board of Public Works next month. But they should be disclosed now. Millions of public dollars are at stake. Even the nature of the lease dispute was a mystery until The Daily Record, the Baltimore-based legal and business newspaper, sought state documents under the Public Information Act.

And the settlement is likely to be unsatisfactory for the state.

That's because, like other team tenants at other venues, Angelos holds a trump card called virtual advertising. If he wanted, he could sell digital advertising that looks to the TV audience exactly like home-plate billboards — but doesn't appear to people in the stadium. That would block the real home-plate ads from TV viewers, making the billboards less valuable, and let the Orioles pocket 100 percent of the take from the fake home-plate ads.

Probably nobody thought of this two decades ago when the Camden Yards lease was signed. But virtual TV ads, introduced in the late 1990s, are taking over more and more of the screen and have become common in baseball. (Watch the Boston Red Sox home-plate ads. If they're visible in the live shot but blurred out in the replay, they're virtual.)

If the state were tough, it would sue the Orioles for all the money owed, arguing that a stadium ad is a stadium ad regardless of the medium. Maryland owns the virtual home-plate real estate, too. The Orioles ought to pay rent regardless.

But don't be surprised if the stadium authority grants large concessions, agreeing to take less than a 25 percent cut on the current, non-virtual home-plate ads for the lease's remaining dozen years.

If nothing else the settlement should make clear that other stadium ads — in the outfield and so forth — are not TV spots and that the state should get a 25 percent cut of any virtual ads. Next thing you know, the Orioles may withhold revenue from the outfield billboards, saying they, too, are directed at television viewers.

"We currently have no plans to utilize virtual advertising; however, we have not ruled anything out in the future," Orioles spokesman Greg Bader said via e-mail.

Virtual ads are starting to appear on the safety glass at hockey games and other weird places. It's only a matter of time before you'll see them replacing part of the stadium grass, if only briefly at first, perhaps on the sidelines or in the bullpen.

The taxpayers own that venerated turf, and if it's going to be auctioned off, they should get their share.

jay.hancock@baltsun.com

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