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MARCH 28, 2005
The Next Great Baseball Rivalry The Nationals and Orioles will be fierce competitors -- at the ticket window On Apr. 4, the Washington Nationals will officially play ball for the first time -- and the boos from Baltimore promise to be almost as loud as the cheers in the Nation's Capital. The Nats and the Orioles, which will compete 37 miles apart, have already skirmished over the marketing of tickets, their attempts to acquire star slugger Sammy Sosa, and the question of how Birds owner Peter G. Angelos will be compensated -- a calculation that could affect the location and financing of future franchises. For Orioles fans there's even the frightening possibility of a Baltimore icon, legendary shortstop Cal Ripken, going over to the dark side. This summer, Major League Baseball will select an ownership group out of at least seven partnerships vying for the franchise. Ripken, who declined to be interviewed, has said he might be interested in joining a Nationals group if he also had a hand in running the team. The competition between baseball's new neighbors will grow more intense after a Nats owner -- expected to pay up to $400 million -- is selected. For now, the Nationals are owned by the 29 MLB team owners, including Angelos. That places the current, MLB-controlled management in a tough spot, trying to avoid even the mildest public disagreements with the Orioles. For example, in the contest to trade for Sosa, baseball sources say the Nats were directed to back off by MLB when Angelos got in the game. Says Nats President Tony Tavares: "Every time we play them, I hope we kick their butts. But do I wake up wondering how I can hurt the Baltimore Orioles' business and enhance mine? Honestly, no." Selig already seems to be bending over backward for the Orioles. In September the commish's lawyer, Bob Dupuy, began talks with Angelos. Since then, according to baseball sources, MLB has offered several plans to indemnify the Orioles. Terms include guaranteeing them annual revenues of $130 million, just above their estimated revenue at present. Angelos would also be assured of a price tag around $360 million if he were to sell the team. That's a tidy profit over the $173 million that an Angelos-led group paid for the Orioles in 1993. For now, the sticking point in the talks appears to be control over the Nationals' TV broadcast rights. PRECEDENT PROBLEM Some big-league execs defend the revenue guarantee, saying it's so low that it's unlikely ever to kick in. But other observers point out that in Angelos' position, some owners might pocket the guaranteed money rather than spending to improve their teams. There's also the question of the future. "What happens if a team gets put in Portland, Ore.? Do the Seattle Mariners get the same [compensation] deal? It creates a precedent problem," says Smith College professor Andrew Zimbalist, an expert on MLB finances. A major battleground for the Orioles is ticket sales, the franchise's richest revenue stream at about $50 million per year. Last season the O's drew more than 34,000 fans per game. By the team's estimates, 25% of its fans live in D.C. suburbs. Keeping those fans will be a challenge. To stem losses, the O's opened sales of tickets to single games two months early, in December, and four months sooner than the Nationals. "We've never sat down and thought: 'How do we counteract the team down the street?' It has given us a new sense of urgency," says Spiro Alafassos, the O's chief of communications. Meanwhile, the Nats could outdraw the O's. The Nats say they have sold the equivalent of 18,500 full-season tickets for a team that (as the Expos) lost 95 games last year and will play in shabby RFK Stadium. But for diehard O's fans, ticket sales are of little concern compared with the Ripken shocker. To many it would feel like a fastball off the helmet if Ripken, who played only for the Orioles during a 21-year career, ended up running the Nationals. It could also jeopardize his continuing ties to Baltimore: Ripken owns a minor-league franchise affiliated with the Orioles. For now, Ripken and Angelos are on friendly terms. A spokesman for the Iron Man, whose 2,632 consecutive games played is an MLB record, says he sees the O's owner for lunch about once a month. But that consecutive-meal streak could end fast if Ripken starts commuting to a new job in Washington.  By Mark Hyman in Baltimore Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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