Business of Baseball Report

MLB and Washington, D.C. Agree on Stadium Lease

Major League Baseball and Washington, D.C. officials agreed on a new stadium lease last week. The new agreement was submitted to the city council with a cover letter signed by D.C. mayor Anthony Williams, MLB President and CEO Bob DuPuy and Dennis Archer, former Detroit mayor and the mediator between the two parties.

The new lease agreement requires the city to use traditional, tax-exempt financing. It also requires the city to split the proceeds from land sold around the ballpark that will be used for future developments. MLB will be required to lease RFK Stadium in 2008 if the new ballpark isn’t finished as planned in 2008, and MLB will be responsible for developing a youth baseball facility in addition to increasing the number of free tickets given out to disadvantaged children.

Not everyone is happy with the new deal. D.C. Chief Financial Officer Natwar M. Gandhi is concerned that the new lease doesn’t have a rent reserve in it that would be used to help back the stadium bonds. Bond raters on Wall Street required this reserve in order to give the bonds an investment grade debt rating. Hardball Times columnist Maury Brown discusses this further at his new blog, The Baseball Journals.

In other D.C. news, the city is asking a Superior Court judge for permission to begin evicting the property owners who own the land that will eventually be the site of the Washington Nationals’ new home. City officials want to begin the eviction process by February 7, which is also the date that the city council will meet to vote on the lease deal. While the titles to these parcels have already been seized through eminent domain, they need the court order to begin pushing out the current tenants.

WBC Rules, Coverage Rights Announced

World Baseball Classic, Inc. announced the rules for the upcoming inaugural World Basebal Classic (WBC) set to debut this March. Included in the provision are rules on pitch counts, mercy rules for ending lopsided games and limitations on the number of participants each MLB team can have in the tournament. To make sure that the rules are being enforced, each game with have a Game Operations Technical Committee that will be responsible for keeping track of pitch counts and will be able to force pitching changes once the pitch counts are exceeded.

ESPN was given exclusive television rights to the WBC. ESPN and ESPN2 will have 16 live telecasts of the tournament, including the semifinals on March 18 and the final game on March 20. The WBC begins March 3.

Diamondbacks Display Board and Sound System to be ready by Opening Day

The Arizona Diamondbacks’ front office hopes to get its new massive LED display installed at Chase Field by the time the New York Yankees roll into town for two spring training games in late March. The LED board will be the largest in all of baseball and cost the team $3.3 million. The team is also upgrading the stadium’s sound system and adding two high-end field-level suites at the end of each of the two dugouts.

Mets GM Takes Heat for Latin Signings

Omar Minaya, the Mets general manager, was forced to defend himself last week on talk radio shows as to his recent acquisitions. Minaya has recently come under fire for overplaying the fact that he’s the first Hispanic general manager in baseball to draw Hispanic players to the Mets. Fortunately, other teams’ executives have publicly defended Minaya by saying his signings make baseball sense and that they just happen to involve Hispanic players.

Anaheim/Angels Court Battle Continues

Angels owner Arte Moreno took the stand last week in the legal battle between the city of Anaheim and the Los Angeles Angels of Anaheim. Moreno contended that the Los Angeles Angels of Anaheim is a formal team name, and he also found the time to crack a couple of jokes. Anaheim’s attorney, Andy Guilford, brought up the financial aspects of the name change and even asked Moreno whether he’d break the lease to make a buck.

In testimony on Monday, Moreno did admit that he violated one provision. He claimed that he made a mistake by not including “of Anaheim” on the team’s ballpark signs. The signs currently just have “Angel Stadium.” Also on the stand on Monday was Laren Ukman of IEG, a Chicago-based firm that helps corporations value their sports and entertainment sponsorships. She contended that the city’s lost exposure could cost it $191 million by 2016 and as much as $373 million by 2029. Rather than ask for a specific amount in damages, the city wants to use these expert testimonies to the jury so that they can come to a logical conclusion as to damages in the event they rule in favor of the city.

Royals Owner Warms Up His Relocation Card

On April 4, Jackson County voters will decide on a three-eighths-cent sales tax increase that would generate $425 million of the projected $575 million that’s needed to upgrade Kauffman Stadium, home of the both the Kansas City Royals and the Kansas City Chiefs. The two teams will contribute $100 million, with the Royals contributing $25 million and the Chiefs contributing $75 million. The remaining $50 million will come from state tax credits.

Royals owner David Glass stated that he wanted to keep the team in Kansas City, but he also said that if the sales tax increase didn’t pass, he’d be forced to looking at other options. If the improvements aren’t made to Kauffman Stadium, the Jackson County Sports Authority could be in violation of its current lease and would allow the Royals to leave Kansas City as early as 2007.

Theo Epstein Returns to the Red Sox

Theo Epstein returned to his old job as Boston Red Sox general manager almost three months after walking out on the team. While the reason for his departure has never been completely explained, it’s been rumored that Epstein had a falling out with Red Sox president Larry Lucchino. The two sides have apparently settled their differences, and now Epstein, the general manager who helped bring a World Series title to Boston in 2004 for the first time since 1918, can go about putting a team together that will challenge the division-rival New York Yankees.

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