Peter G. Angelos could sell the Baltimore Orioles for almost $200 million more than he paid for the team 11 years ago under terms of a deal he is negotiating with Major League Baseball to compensate him for the Montreal Expos moving to Washington, sources said.
Angelos would also receive 60 percent of the revenue from a regional sports network and MLB would guarantee that the Orioles' revenue would never fall below an average of what they earned before the Expos moved here, sources said.
Neither Angelos nor baseball officials would comment publicly on the talks, which are close to being completed.
The value of the deal being discussed is difficult to calculate but it appears to guarantee that the team will always be financially sound under Angelos. The Baltimore attorney led a group that bought the team for $173 million in 1993, and Forbes magazine last April estimated the Orioles' worth at $296 million and local revenue at $129 million in 2003. The regional sports network, which would televise both Orioles and Expos games, has yet to be formed.
The negotiations reflect baseball's desire to make peace with Angelos, who has threatened to block a transfer of a team to Washington. While some legal experts doubt he could prevail in court, baseball is seeking an amicable settlement that would remove all obstacles.
Still, if the negotiations fail, baseball has announced it will move the team as long as the D.C. Council approves a $440 million stadium financing package.
Fay Vincent, a former baseball commissioner, said yesterday that the deal under discussion seems very favorable for Angelos.
"I think they would do almost whatever he wants," he said. "They are hurting his franchise very badly. He has a right to retrieve a fair amount of money. The owners are establishing a tough precedent: They are saying we can gang up and move a franchise into your area and remove some of the value of [your] franchise. I'm sure he is holding out for a very substantial payment."
Meantime, D.C. Mayor Anthony A. Williams launched a public campaign to persuade District residents to support his plan to tax the city's largest businesses to pay for a new ballpark for the former Montreal Expos.
Yesterday, Williams (D) met with labor leaders and neighborhood activists from the proposed stadium site, telling them that baseball will be a powerful engine for economic development and "a great amenity for our city."
Many experts argue strongly that new stadiums bring little, if any, real economic benefit to a city. Stanford University economist Roger Noll calls them "a toy."
Williams also met over breakfast with council members.
"As of yesterday, a new era in baseball began in our city. Today, the real work to make that happen begins," Williams told reporters at a noon news conference.
Angelos said earlier this week that he was willing to accept a team in Washington if MLB met certain conditions. With negotiations moving toward some resolution, Commissioner Bud Selig announced Wednesday that the Expos would be moved to Washington in time for Opening Day 2005.
Sources stress that a deal between Angelos and MLB has not been concluded and that negotiations could still break down, but both sides have apparently agreed to many of the details.
One sticking point had been the length of the guarantees: Angelos wanted them to be permanent; baseball wanted them to last only as long as Angelos owned the team. The two sides have apparently agreed to keep the financial guarantees effective as long as Angelos or a member of his family owns the team, according to several sources familiar with the deal.
The critical part of the agreement would ensure that Angelos would to be able to sell the Orioles for no less than $360 million, a guaranteed price that would escalate over time, depending on how much Angelos could increase revenue. The $360 million is about three times his current local revenue.
Angelos has not indicated any interest in selling the Orioles.
"It sounds like an extraordinary deal, one that many businesspeople would have been jumping at long before this," said Stan Kasten, former president of baseball's Atlanta Braves. "Peter's primary interest was about preserving the integrity and well-being of the franchise. But it sounds to me that he was able to get what he wanted."
Paul Taubman, a managing director at Morgan Stanley Dean Witter who has worked on the sale and purchase of several sports teams, said, "baseball has come up with a wonderful solution, which insulates Angelos from the effect of a second team in the area, while at the same time offering him an opportunity to create additional value through a far more attractive regional sports network than he could do on his own."
D.C. Baseball Club Chairman Fred Malek said a regional sports network with revenue weighted toward Angelos would not affect his desire to purchase the Expos.
"I am still highly interested," Malek said. "The executives at Major League Baseball know what they are doing. They have handled the situation well to date. And we think the whole concept of a regional sports network between the Washington team and the Orioles is a home run."
Reaction to the stadium financing plan was mixed yesterday in Washington. As they emerged from a meeting with Williams, City Administrator Robert C. Bobb and an array of sports and planning officials, and about a dozen activists who live near the proposed stadium site on the Southeast waterfront near South Capitol Street said they appreciated the briefing.
"So frequently, the community is the last to know," said Andy Litsky, a neighborhood advisory commissioner in Ward 6.
But others said they fear their streets will be overrun by stadium traffic, and that the city's plan to build a 1,100-space parking garage is woefully inadequate for a 41,000-seat stadium. And David C. Sobelsohn, secretary of the Southwest Neighborhood Assembly, said he's still not convinced that using tax dollars to pay for any stadium is a wise idea.
"There's a paucity of studies showing that stadium projects actually benefit the community," he said.
Sobelsohn's comments echoed a drumbeat of criticism rising from council members Adrian M. Fenty (D-Ward 4), David A. Catania (I-At Large), Jim Graham (D-Ward 1) and ordinary citizens across the city. Yesterday, Williams fired back with city estimates that the ballpark would generate up to $30 million a year in new taxes -- half of it dedicated to the city's general fund -- and create more than 4,500 jobs, most of them temporary construction jobs.
A separate study by the D.C. Convention and Tourism Corporation estimates that baseball fans would spend an extra $31.4 million a year on D.C. hotels, restaurants and other forms of entertainment. Many stadium experts argue that consumers simply would be shifting their entertainment dollars from one event to another.
"You hear a lot of people saying, 'I support baseball. I just don't support the funding,' " Williams said. "Well, ladies and gentlemen, I would like to learn Chinese. I would love to be able to speak French or Arabic, okay? But . . . unless I go and spend the time and effort to learn them, I'm not going to learn them. . . . If we want baseball, we're going to have to make an investment."
Legislation to authorize the stadium financing package will be sent to the council today, Williams said. The council's finance committee expects to schedule a public hearing for the last week in October.
Yesterday, the mayor and his aides declined to release a draft of the bill. They said it would:
* Authorize the District to issue up to $500 million in revenue bonds to pay for the new stadium, land acquisition and $13 million in renovations to Robert F. Kennedy Memorial Stadium, the Expos' temporary home for the next three years.
* Direct the District to begin buying property on the proposed site.
* Set the sales tax rate at 10 percent for tickets and merchandise sold at the ballpark.
* Impose a gross-receipts tax on the city's 2,000 largest businesses, defined as those that take in more than $3 million a year.
The in-stadium sales tax and the gross receipts tax -- recently dubbed "a special ballpark fee" by the mayor -- comprise two of the three revenue streams that will be used to repay the stadium bonds. The council will not get an opportunity to vote on the third source of revenue, a 30-year lease agreement negotiated with Major League Baseball that requires the Expos to pay the city about $5.5 million a year.
Many fans in Washington focused yesterday on how to get tickets for the upcoming season.
A hotline funded by Washington Baseball Club was inundated with more than 1,500 calls yesterday, said executive director Winston Lord, and at least 4,000 people signed up for information about season tickets through the hotline or the club's Web site.
More than 300 people phoned the mayor's call center to ask about tickets, said office of planning spokesman Chris Bender. And more than 200 people called or e-mailed D.C. Sports and Entertainment Commission Chairman Mark Tuohey at his downtown law office.