In Washington’s $550 million stadium deal, $6 million would seem to be a relatively small amount of money. But as far as anyone outside the negotiations can tell, it is proving to be a major sticking point for Major League Baseball. MLB has balked at a proposed $6 million-a-year “hell or high water” clause to ensure a base for city revenues in the event of a player strike or terrorist attack. The fact that MLB can balk at even this tiny a committment with any credibility is another indication of the sorry depths of these negotiations. No sweetheart deal is good enough.
“Hell or high water” clauses are routine in many long-term, high-stakes contracts and are not unheard of in sports deals. In any event, Wall Street is forcing the issue — it has told Washington to demand $6 million a year, or else lose investment-grade ratings for the construction bonds. The District would waive this if it could given its weak-kneed track record with baseball, but it cannot.
The larger context shows just how absurd MLB’s latest objection is. As Neil deMaus of Baseball Prospectus pointed out earlier this year, private companies are paying for three-quarters of the new $387 million Busch Stadium the St. Louis Cardinals expect to use in 2006. The figures for stadiums in San Diego and Philadelphia that opened in 2004 were two-thirds of $449 million and half of $458 million, respectively. But for the Washington Nationals, just over one-tenth of the $550 million cost will be private. The city will handle the rest. So Washington’s stadium deal — a deal in a much more promising market than any of the above — works heavily in MLB’s favor, and against a decade’s precedent in stadium finance.
D.C. officials are reportedly sticking to their guns, and rightly so. “What I have told [MLB] is: This is non-negotiable,” Councilman Jack Evans told The Washington Times last week. “So you either agree to this, or you move the team to somewhere else because we’re wasting our time.” MLB declined to comment last week, and this week offered only bromides. It doesn’t have much of an argument in its defense.
But then, having no real arguments isn’t usually a problem for the MLB. Chief operating officer Bob DuPuy recently dismissed as “patent nonsense” the sense of manager Frank Robinson and others that the team’s ownership delays are likely to harm competitiveness by blocking the team from many of this winter’s free-agent signings. “We won’t drop a beat with regard to the operation of the team,” he said. In other words, he said that a team can do just fine without a real budget or a committment to staffers that they’ll be employed a week from now. With a straight face, then, MLB has made a patently ridiculous argument to Nationals fans. It is now trying to do the same to the District and Wall Street. They both should resist.
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