Here are some quotes from Lori Montgomery's fascinating piece in today's Washington Post. Here's how it kicks off:
The long, dark spiral into chaos that engulfed the D.C. baseball deal began, ironically, with an act of goodwill.
D.C. Council Chairman Linda W. Cropp asked Major League Baseball to make concessions on a stadium agreement signed in September. Baseball officials agreed. The list of deal-sweeteners delivered to Cropp on Tuesday ranged from self-serving to substantial, such as allowing the District to seek some private financing for the new stadium.
Then the council came to focus on Item 7: If the city failed to build a ballpark for the former Montreal Expos by March 2008, it would have to pay the team as much as $19 million a year to cover lost profits.
From Major League Baseball's perspective, that was a big concession to the city. The stadium agreement places no limit on the city's liability if the ballpark isn't ready by 2008.
To certain council members, however, Item 7 looked like a hoax -- a big, fat thumb in the eye of an unsuspecting city. If baseball were offering to cap lost profits at $19 million, the members said, then $19 million must be exactly what baseball expected to receive all along. Besides, why should there be a late fee of any kind? The city's paying for the whole stadium.
Item 7 wasn't a concession, it was an insult, they contended. Cropp agreed and plunged the deal to bring baseball back to the nation's capital into crisis.
What was the purpose of Item 7? I don't buy the "concession" bit. To me, the item's presence suggests that MLB viewed the D.C. political situation as tenuous; that timely completion of a new stadium, even given an affirmative vote by the council last week, was no certainty. Perhaps the $19m clause was designed to address uncertainty on behalf of potential bidders for the franchise, and would thus increase the price that MLB could fetch for it.
White Sox owner Jerry Reinsdorf led the MLB's relocation committee, which handled this issue. Reinsdorf has a reputation as a hard bargainer, which is backed up by this vignette:
Last year, when Williams suggested that the city would be willing to build a ballpark by using two-thirds public funding and one-third of the money coming from the team, The Washington Post reported that Reinsdorf responded: "Two-thirds/one-third is fine. But three-thirds/no-thirds is more of what we had in mind."
Let me get this straight. MLB asked D.C. to build a baseball stadium. The modern baseball stadium is a specialized asset, the value of which can only be realized as a facility for major league baseball. And the city didn't even know who the owner will be. I'm sorry, that's just nuts, regardless of your stance on the economic impact issue.
Will MLB back off of their "no further negotiations" stance this week? My crystal ball says they are likely to offer some smoke and mirror schemes to stretch the definition of "private financing." Whether they truly give ground depends on how firm Ms. Cropp and the council prove to be. From the sound of the article, they are responding to the will of the voters in the district, Thomas Boswell and company not withstanding.