The model Major League Baseball franchise boasts stingy defense, a stellar bullpen and, these days, a subsidiary to mine new sources of revenue.
The Red Sox, as reported in SportsBusiness Journal, have launched Fenway Sports Group, whose projects include a plan to snap candid photos of fans at the ballpark and sell them at team Web sites alongside caps and bobbleheads.
The Orioles recently formed Orioles Entertainment LLC to capitalize on the appeal of Camden Yards, a nice place to catch a ball game and, perhaps, to boogie at a rock concert.
Camden Yards may still be the perfect venue for loud music on a hot night. But after being dragged into court by a high-profile rock band, team officials might be wondering if they’re cut out to cut such deals on their own.
Last month, hard-rock band Van Halen slapped the team with a $2 million lawsuit, alleging that plans for a Sept. 2 concert at Camden Yards went off course when the Orioles breached an oral agreement.
Notable in the lawsuit, filed Aug. 10 in U.S. District Court for the Central District of California, is the account of who negotiated the deal for the Orioles: the Orioles.
According to Van Halen’s complaint, Don Mark, director of Orioles Entertainment, handled talks for the team “under the sole authority and supervision” of owner Peter Angelos and team executive vice president John Angelos.
Not surprisingly, rock promoters warn that the risk of a negotiation going sour is high when teams try to handle it themselves.
One of the biggest risks: overpaying the talent. The Orioles’ alleged offer of $1.5 million seemed high to Gary Bongiovanni, editor in chief of Pollstar, a concert industry trade magazine, who cited so-so attendance at Van Halen shows during the band’s summer tour. The band averaged fewer than 13,000 fans, according to Pollstar, near capacity at some venues it played, but not close to filling Camden Yards’ capacity of 49,000.
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| Van Halen wants $2M from the O’s, claiming the club reneged on a concert date. |
Said Don Sullivan, talent buyer for Chicago-based Jam Productions, which promoted legends Bob Dylan and Willie Nelson on a tour of minor league ballparks this summer: “Every act has a different market value and a different booking agent trying to get the most money. If you’re not familiar with it, you get taken advantage of.”
Adds Seth Hurwitz, who heads IMP Productions, concert promoters based in Bethesda, Md.: “I compare it to painting your house. Most people could learn. But you’re not going to paint your house perfectly or close to perfectly the first time.”
How much knowledge of the concert industry the Orioles have in their organization is unclear. The team describes Mark, the head of Orioles Entertainment, as experienced in booking music acts and points to a series of smaller, postgame concerts on which he has worked for the team.
But three veteran observers of the music industry said they were unfamiliar with his credentials. (In two brief phone interviews, Mark declined to discuss his experience.)
Commenting on the lawsuit, Mark said, “There clearly was no contract between Orioles Entertainment and Van Halen. In fact, many important issues were undecided.”
In the lawsuit, Van Halen claims the Orioles pursued the band aggressively and then, when a deal was set, backed off.
On April 27, the lawsuit contends, the band received “a firm offer, in writing” of $1 million to play at Camden Yards in early September. A day after the band rejected the offer, the Orioles upped their proposal to $1.5 million plus 80 percent of ticket revenue (net taxes) and 80 percent of gross revenue from sales of merchandise, according to the lawsuit. At that point, the band claims it began preparing for the concert. It “orally accepted” the Orioles’ offer in mid-June, according to the lawsuit.
A month later, Van Halen alleges, the Orioles backed out.
Executives from other teams said they have avoided such disputes by hiring outsiders to handle negotiations for concerts in their ballparks. Mike Veeck, part-owner of four minor league baseball teams, estimated he has been involved in more than 100 concerts, and has retained promoters to handle each one.
“It’s very easy to get hosed,” Veeck said. “This is a business where there’s room for terrible misunderstandings.”
Expensive ones, too.
Mark Hyman (mhyman@sportsbusinessjournal.com) is a lawyer and writer.
