-- Major League Baseball is renting out the Montreal Expos to this Caribbean island for more than $300,000 per game.
The Expos will play 22 "home" games in Puerto Rico this season, including tonight's opener against the New York Mets. Despite the fact that none of the games is sold out, including the first four-game series, MLB, which owns the team, is guaranteed at least $6.6 million, with an opportunity for more if gross receipts exceed $10 million, according to people familiar with the deal.
For all of its exotic allure -- regular season baseball played amid the swaying palms and beach resorts -- the Puerto Rico adventure is part of MLB's aggressive business strategy since the league effectively annexed the Montreal franchise after failing to "contract" it in 2001.
MLB is entertaining offers from Washington, Northern Virginia and Portland, Ore., to find the Expos a permanent home. The league is demanding a new publicly financed stadium and ultimately intends to auction the team to private investors.
As relocation plays out, baseball officials have sought creative ways to cut costs and increase revenues for the financially crippled franchise. Montreal reduced payroll this winter by unloading its best pitcher, Bartolo Colon.
The Puerto Rico series represents the biggest gambit yet: an attempt to bolster the lame-duck franchise's dwindling ticket base.
"From an economic standpoint, it's already been a success," said John McHale, MLB's executive vice president for administration, who negotiated the Puerto Rico deal.
MLB already appears to be preparing to expand the arrangement next year if the Expos remain in limbo. Baseball officials are hoping to move the Expos by next season. But a variety of issues threaten to derail relocation, including opposition from Baltimore Orioles owner Peter Angelos and an unresolved racketeering suit filed against baseball by Expos minority investors.
Last month, baseball quietly hired John Blakeman, a former director of city enterprises for San Juan, to serve as a consultant on the Puerto Rico project.
Although Blakeman has been hired through September, the move is perceived by some here as a sign that MLB is preparing to play in San Juan next season and perhaps beyond.
Asked if he had entered into negotiations with baseball for next year, local promoter Antonio J. Munoz Grajales said, "Not formally."
McHale, who sits on baseball's relocation committee, said discussions about next year were premature. Although baseball regards the Puerto Rico experiment as a success, McHale said, "I don't know that it will have any particular impact on Major League Baseball's ultimate plans for the Expos."
The series here has wreaked havoc with Montreal's schedule. After opening the season with three-game series in Atlanta, New York and Chicago, the Expos, who finished the road trip 5-4, now have 10 "home" games in Puerto Rico against the Mets, Braves and Cincinnati Reds -- a 19-game odyssey before the team opens in Montreal on April 22. Montreal played Tuesday in Chicago in 32-degree weather. The temperature on the AstroTurf field today in San Juan was 136 degrees.
However, a source close to the team said that despite the logistical problems, the guaranteed revenue from the Puerto Rico series has prevented the Expos from having to shed another premier player, such as second baseman Jose Vidro or pitcher Javier Vazquez, as was originally expected.
Andrew Zimbalist, a Smith College economics professor who recently published a book on baseball and public policy, said the Expos "are clearly in a holding pattern." Baseball's strategy was understandable given the "moribund" state of the franchise, Zimbalist said, but "with these short-term decisions, on the basis of expedience and short-term financial gain, you have to wonder. The game is strong enough and deeply embedded in the culture, so baseball can get away with some of these dalliances, but it doesn't help the sport in the long run."
Montreal drew 812,537 fans last year at 46,338-seat Olympic Stadium, less than the total attendance of the Class AAA Sacramento River Cats. With an average ticket price of $9 (in U.S. currency), the lowest in baseball, the team stood to gross roughly $2 million for the 22 games that will now bring in at least $6.6 million in San Juan.
The Expos source said the club is "probably going to realize more in these 22 games than in the 59 games that'll be played this year in Montreal."
A San Juan promoter, MB Sports Inc., purchased the rights to the games from Major League Baseball. The agreement has not been disclosed, but sources said the $300,000-to-$350,000 per-game guarantee gave the promoters the rights to ticket revenue, local television, sponsorship receipts and concessions up to the threshold. The San Juan government put up $2.4 million to renovate 42-year-old Hiram Bithorn Stadium. But the incentive of potential additional revenue -- as well as the opportunity to market the sport in Latin America -- have turned the games into a decidedly major league operation.
MLB dispatched its director of Latin American marketing, Sara Loarte, to secure sponsorships for the games; the title sponsor, Banco Popular, paid $1.5 million, according to league sources. The Expos' executive vice president of business affairs, Claude Delorme, was brought in to oversee ticket sales. The league has set up operations in a renovated office beneath the left field grandstand.
Baseball officials have been almost microscopically attentive to the bottom line. The promoters, in consultation with Major League Baseball, set the average ticket price at $33.47 -- well above the major league average of $18.69 and over three times the average ticket price in Montreal -- according to figures provided by Munoz Grajales, the promoter. Tickets behind home plate are selling for $85.
The price is extraordinarily high for Puerto Rico, a baseball-mad commonwealth of 3.8 million people that straddles the developed and developing worlds. The island's monthly per capita income is $682.08, San Juan's slightly more than $1,000, according to U.S. census figures.
Baseball officials and promoters insist that the high prices were necessary because the antiquated stadium is half the size of most major league parks. In fact, baseball scratched plans for an additional 10 rows of bleachers because the $10 seats -- the cheapest available -- would have obscured billboards that brought in more revenue, according to Delorme.
"That would have more than offset the additional revenues from those seats," he said.
Baseball officials now expect a capacity of roughly 18,500 -- including 4,000 bleacher seats -- about 1,500 less than originally planned. As of today, none of the games, including Friday's against the Mets, was sold out.
Baseball had sold some 165,000 tickets for the 22 games, about 40 percent of capacity, by the end of last week.
Delorme said the figures exceeded projections so far. "We didn't really know what to expect," he said. "Initially we were told that if we generated 25 percent of full inventory in advance of the games we were on pace to do fairly well. The fact that we're at . . . . I see that as positive."
However, it seemed clear that the high prices were keeping some fans away.
At 1 p.m. Wednesday, two days before the game, the activity inside the stadium was frantic. Workers swarmed over the concourses, dugouts, clubhouses and field in a last-minute rush to complete construction in time for Opening Day.
Outside, however, it was relatively quiet. Three windows at which tickets were sold remained empty for 15 straight minutes. Gilberto Rios, a retired contractor, walked up to one window to buy tickets for himself, his wife and two grandchildren.
He ended up purchasing just one $25 seat (plus a $3 service charge) for himself. "I think this will be a success for Puerto Rico, but it's a little expensive," he said. "If I bought tickets for just myself and my two grandchildren, that's more than $80. It's too high. I think more people would come if they adjusted the prices."
Other fans were unfazed, however. Benito Guillem, an engineer from Ponce, bought one $25 seat and described the prices as "not too bad. They're pretty high, but we're talking about Major League Baseball here. These ballplayers make so much money, I can't blame them for setting these prices. When you go to a movie, sometimes you go because you like the actor. This is the same thing."
Loarte said Expos were unlikely to sell out every game. But baseball had essentially filled up three sponsorship tiers, she said. Loarte declined to disclose the amounts that the companies -- which include household names such Budweiser, Radio Shack and Toyota -- had paid, but sources said the agreements ranged from $250,000 to Banco Popular's $1.5 million.
Between sponsorships and ticket sales, Loarte said, baseball was likely to earn more than the guaranteed money the league received for the games.
"We're close," she said. "Our expectation is that we will meet the threshold."
To bolster interest, baseball scheduled teams featuring players from Latin America, especially Puerto Rico, including Roberto Alomar of the Mets and Sammy Sosa, a Dominican, of the Cubs. The Expos are loaded with Latin players, including Vidro and Vazquez, both of Puerto Rico, and superstar right fielder Vladimir Guerrero, a Dominican native.
Nearly 50 percent of all players under contract to major league teams now come from outside the 50 states; nearly 1 in 3 are from the Dominican or Puerto Rico. MLB has been aggressively marketing in the region; the league has television contracts in 13 countries and territories and even produces a Spanish-language program focusing on Latin players.
Sources close to the relocation process said Puerto Rico was a perfect site to park the Expos temporarily because -- unlike Washington and Portland -- San Juan advanced baseball's goals in Latin America but currently had little chance of landing the Expos permanently.
Now, however, the location looks like it could provide a longer solution if relocation bogs down. Some here have noted that the changes to Hiram Bithorn -- including new bullpens in left and right field, batting tunnels and elaborately remodeled clubhouses -- seem more permanent than necessary.
"It's not just for 22 games," said one Puerto Rican baseball source.
Referring to the winter league club that normally occupies the stadium, he said, "You're not going to do this for the Santurce Crabbers."