Treasurer questions state’s decision about concert

Maryland’s treasurer on Wednesday criticized the stadium authority’s recent decision to let the Orioles keep all of the profits from the upcoming Paul McCartney concert, questioning whether it is in the best interest of taxpayers.

The Maryland Stadium Authority’s Board of Directors unanimously agreed last week to opt out of financial participation in the McCartney show, scheduled for June 12 at Oriole Park at Camden Yards. The stadium authority, which owns the stadium and leases it to the Orioles, can opt in to non-baseball special events at the venue — receiving 45% of the revenue while the Orioles receive 55% — or can opt out.

Because there is risk that such an event can operate at a loss and because the Orioles told the authority that participation from the stadium authority was a “disincentive” to bringing more concerts, the MSA “elected to acquiesce” to a request from the Orioles to opt out.

As a result the Orioles don’t have to share the revenue with the state.

Dereck Davis, the state’s treasurer, opened Wednesday’s Board of Public Works meeting by saying he had a problem with the stadium authority’s decision.

“For obvious reasons, the ballclub asked the state to give up their interest in this, and we did,” Davis said. “And the explanation was, well, we don’t assume any of the risk and so forth. But my thing was that didn’t really pass the smell test.”

Davis questioned why, if the risk of financial loss was a reason to opt out, the authority didn’t opt out on its own accord rather than waiting for the Orioles to ask.

“Why did we need the Orioles to come ask the state to not participate?” the Democrat said. “We would’ve just done that ourselves, but we didn’t do that.”

During last week’s meeting of the authority’s board of directors Chairman Thomas Kelso highlighted that while the authority will take on “zero risk” by opting out of the concert, the event still would generate roughly $700,000 or $800,000 in revenue for the stadium authority thanks to the amusement tax.

There is a 10% amusement tax on tickets to the McCartney concert, 20% of which goes to the city and 80% goes to the stadium authority — regardless of its financial participation in the concert.

“It’s a great thing,” Kelso said. “We take no risk and we make 8% of the total amount of tickets sold.”

The Orioles — who have only hosted one major concert at Camden Yards, Billy Joel in 2019, prior to next month’s McCartney performance — said the authority’s participation would disincentivize the team to bring in future acts. The stadium authority, which argued it’s better to get 8% than nothing, also opted out of the Billy Joel event.

But Davis said Wednesday that the Orioles have leaned on their agreement with the state in years past when it behooves them, and the authority also should be able to do so.

“If they can exercise their contractual right, why can’t we do the same?” said Davis, one of three members of the Board of Public Works. “We had a contractual right that both parties agreed to, and what I’m getting at is the stadium authority has a fiduciary responsibility to the citizens of the state of Maryland. They’re not a grant program for any of these entities.”

The Maryland Stadium Authority did not respond to a request for comment on Davis’ criticisms.

The Board of Public Works’ other two members are Republican Gov. Larry Hogan and Comptroller Peter Franchot, who is running for the Democratic nomination for governor. Franchot thanked Davis for sharing his thoughts and said: “I loved the comments by the treasurer.”

When the Board of Public Works approved a $3.5 million rent credit for the Orioles to pay for modifications to the leftfield wall earlier this year, Franchot and Hogan voted in favor of it, but Davis did not, suggesting the team should pay for it.

Like with the Orioles and Camden Yards, the stadium authority also can share in the revenue and risks of concerts and special events hosted by the Ravens at M&T Bank Stadium. When asked if, going forward, the Ravens would request that the authority opt out of financial participation in such events, the Ravens did not answer directly.

“We are committed to bringing world class events to M&T Bank Stadium and Baltimore,” the Ravens said in a statement. “The concert business has changed since the 1990s, when the leases between MSA and the teams were negotiated. Many of today’s stadium-scale events do require flexibility and creativity.”

The Orioles’ lease with the stadium authority began in 1992 and would have expired in 2021, but the club and the authority extended the lease through Dec. 31, 2023.

The General Assembly recently approved the authority borrowing up to $1.2 billion for improvements to Oriole Park and M&T Bank Stadium, which would require the Orioles and Ravens to sign leases for at least as long as it would take to pay off the bonds.