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 if 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 MSA, 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 it can opt out.
Because there is risk that such an event can operate at a loss and because the Orioles told the MSA 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.
The MSA opting out prevents the Orioles from having 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 MSA’s decision.
“For obvious reasons, the ball club 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 MSA 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 have done that ourselves, but we didn’t do that.”
During last week’s board of directors meeting, stadium authority Chairman Thomas Kelso highlighted that while the MSA will take on “zero risk” by opting out of the concert, the event would still 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. We take no risk and we make 8% of the total amount of tickets sold,” Kelso said.
The Orioles — who have only hosted one major concert at Camden Yards, Billy Joel in 2019, prior to next month’s McCartney performance — said MSA’s participation disincentives them to bring in future acts. The stadium authority, which argued that 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 MSA should be able to, too.
“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 his and said: “I loved the comments by the treasurer.”
When the Board of Public Works approved $3.5 million in rent credit to the Orioles to pay for modifications to the left field wall earlier this year, Franchot and Hogan voted in favor of it, but Davis did not, suggesting the team should pay for it.
The Orioles’ lease with the MSA began in 1992 and would have expired in 2021, but the club and stadium authority extended the lease through Dec. 31, 2023. The state recently approved the MSA to borrow up to $1.2 billion of bonds 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.
Baltimore Sun reporter Bryn Stole contributed to this article.