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Lucrative Deal On Stadium Won Baseball Over

By Peter Whoriskey
Washington Post Staff Writer
Thursday, September 30, 2004; Page A01

In the view of city officials trying to lure the Montreal Expos to Washington, the proposal to build a ballpark had to be especially generous to overcome rival bids as well as baseball's long-standing reluctance to return a team to the nation's capital.

The result is a stadium deal that is more advantageous to the Expos, in terms of the direct investment required of the team, than the last 10 agreements made by other cities with their ballclubs, according to newly released details of the financing plan.

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When the District's offer was outlined to baseball's executive council in Milwaukee last week, it was one of the most generous deals some baseball officials had seen, a source said. "People were amazed that the District had done the deal that they did," said one source in the meeting in Milwaukee. "People sitting around the table were amazed."

In defense of the deal, negotiators point out that the $440 million stadium financing package crafted by District leaders had to be favorable enough to the Expos to win the approval of Major League Baseball, which exercises monopolistic control over team locations. It also had to trump a rival bid from Northern Virginia and compensate baseball for the financial damage claims that were expected from Baltimore Orioles owner Peter G. Angelos.

But what District officials apparently did not know was that the Northern Virginia group -- at one point this summer rumored to be the front-runner for the Expos -- had seen its bid begin to unravel Aug. 25, when its organizers told baseball officials that the state was no longer prepared to guarantee all of the bonds for the project. The sudden weakness of the city's main competitor could have given District officials a much better bargaining position.

Negotiators for the District said, however, that they feared that without an attractive stadium-financing plan, Major League Baseball might simply delay a decision on where to place the troubled Expos franchise, or decide eventually to "contract" or disband it, leaving the nation's capital once again without a club. But baseball officials had already said publicly that contraction was not an option and that the Expos would definitely be moved.

"We thought our competition was them doing nothing -- delaying -- as much as it was Northern Virginia's bid," Stephen M. Green, special assistant to Mayor Anthony A. Williams (D), said yesterday.

The stadium construction plan presented to baseball reflects the "reality of the sports world," Williams said this week in defending the terms of the deal.

That reality is that professional sports -- especially baseball -- hold the upper hand in negotiations. Baseball commissioner Bud Selig had several times set and missed deadlines for a relocation process that had little transparency. Some thought a team would never come to Washington because of Selig's personal opposition to putting a team here.

"Major League Baseball has bargaining leverage that they shouldn't have because they are an unregulated monopoly," said Andrew Zimbalist, a Smith College economics professor and a frequent critic of Major League Baseball. "Until we have a public policy that it's not okay for sports leagues to have that amount of power, then these kinds of deals are what we have to live with."

Under the financing plan described by District officials, the city would sell about $440 million in bonds; the proceeds of the bond sale would pay for stadium construction, land acquisition and other improvements.

To pay back the bonds, the District would rely mainly on a tax on the District's big businesses and new and existing sales taxes within the stadium. Less than 18 percent of the money to pay for the District's stadium would come from the team -- through rent payments -- over the first 20 years of the deal, according to projections.

Other cities typically have demanded that teams pay 33 percent or more of construction costs, according to statistics compiled by teams and the Sports Business Journal.

Those statistics show, for example, that the St. Louis Cardinals are paying 77 percent of the cost of a $387 million stadium now under construction; the Detroit Tigers are paying for 62 percent of their $327 million stadium. The Arizona Diamondbacks, by contrast, are paying 28 percent of the cost of their $359 million project.

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