Orioles owner Edward Bennett Williams today proposed splitting his team's profits with the city this year instead of paying rent for the use of Memorial Stadium. Baltimore officials endorsed the unique plan and said they expected it to be approved.
At a joint press conference with Mayor William Donald Schaefer, Williams said his offer of a 50-50 share of Oriole profits would give the city "a financial as well as a rooting interest" in the team and thus increase Oriole appeal. He said the concept, offered as a one-year experiment, "is so exciting I tingle at the thought of it."
The city's director of recreation and parks, Douglas Tawney, said the new scheme would replace an outmoded contract between the city and the Orioles, which is costing the team an unusually high percentage of gate receipts.
Tawney said the contract, written in 1975, has been outpaced by inflation. "We've been trying to renegotiate it since last August," he said, adding that the profit-sharing proposal first surfaced in November.
City officials said the profit-sharing plan should profit Baltimore if the team draws large crowds, but would cut deeply into city stadium revenues if it does not, so the city could wind up subsidizing the team through lean times.
The 1975 contract gave the city a sliding percentage of gate revenues--1 percent of the first $1 million, 2 percent of the second million, 3 percent of the third million, 7 percent of receipts between $3 and $3.5 million, and 10 percent of anything beyond that. As ticket prices increased, more and more of the Orioles' gate receipts were in the 10 percent bracket.
Williams produced figures showing that under his proposal, big years for the Orioles could be big years for the city. Under the contract, he said, the Orioles paid $725,766 in stadium rental in 1979, their pennant year. He said under his profit-sharing plan the '79 payment to the city would have been $964,305. For 1980, he said profit sharing would have been $822,130, compared with $819,463 in rental.
But in 1981, when the players' strike cut attendance from 1.8 million the previous year to only 1 million, the Orioles still paid $405,358 in rental. Under profit-sharing, the payment would have been only $48,424.
City officials acknowledged that tying receipts to Oriole profits would be risky, but said they were prepared to take the risk. They would never be reduced to a zero payment. Under state law, 10 percent of all gate receipts go to an admissions tax that is funneled to the municipality. That tax would remain intact.
The city would not share in any losses the Orioles suffered and would not share any management responsibilities, Williams said.
The plan, first discussed by Schaefer and Williams at a November luncheon, has been turned over to the city Parks and Recreation Board, which is expected to approve it at the regular board meeting Wednesday. From there it goes to the five-member Board of Estimates, from whom a favorable ruling is expected by the end of the month. The agreement would be retroactive to April 4, opening day.
Tawney said he was "confident" of approval; Mayor Schaefer was all but effusive in his support.
Reporters asked Williams, a Washington attorney, whether his choice of a one-year term for the experiment reflected uncertainty about keeping the team in Baltimore. He said it did not. "I do not believe in divorce," he said, adding that he had "married the city of Baltimore" when he bought the team. "I renewed the vows at a luncheon earlier and now I'm doing it again."
Tawney said a formula for determining team profits is included in the proposal. "The contract defines very carefully what comprises expenses and what comprises revenue," so there should be no disagreement over the bottom line at year's end.