With the announcement by the nascent Dreamers organization that $2.5 billion has been committed to a new MLB Orlando ballpark and a team, the stakes in the potential MLB expansion later this decade were raised.
When the late Pat Williams unveiled a plan for a new MLB Orlando ballpark, we dubbed a long-shot plan: at the time the Tampa Bay Rays had a new-ballpark plan in place as part of a larger Historic Gas Works development in downtown St. Petersburg, and we thought the odds of Orlando landing an MLB with Tampa Bay still in the game was a virtual impossibility.
But boy do things change, as witnessed by the collapse of the new Tampa Bay Rays ballpark plan. With the potential of the Rays leaving Tampa Bay, the Dreamers organization has been energized over the prospect of a new MLB Orlando ballpark, announcing the commitment of $1.5 billion toward establishing a team and $1 billion toward a ballpark. Now, it’s always best to take these commitments with a huge grain of salt, and to their credit the Dreamers crew term the commitments “preliminary letters of intent and verbal commitments approaching $1.5 billion in equity investments.” From the Dreamers press release:
“We are extremely pleased with the recent rapid progress in financing interest towards a prospective MLB team acquisition,” said Larkin. “It is clear that these seasoned investors understand the compelling opportunity represented by our unsurpassed market metrics and proposed state-of-the-art domed stadium, located right in the middle of the Orange County tourist corridor that will welcome approximately 80 million tourists this year.” Larkin further confirmed that the Dreamers have a letter of intent for stadium financing in excess of $1 billion.
Jim Schnorf, Co-Founder of the Orlando Dreamers, added, “Enthusiasm for an Orlando MLB franchise has hit a fever pitch in recent weeks, inspired by Barry’s leadership.”
According to Schnorf, “We feel the heavy lifting part of team acquisition financing and stadium financing has been accomplished. Finding the right anchor investor in our control ownership group and an attractive financing structure for the team’s portion of stadium construction were clearly the most challenging aspects. We are completely confident in arranging any supplemental senior debt financing that might be relevant for team acquisition to supplement the equity investment already identified. Our stadium funding letter of intent from a major institutional partner will provide more than $1 billion towards construction costs, under an arrangement that is highly attractive to Orange County government and citizens, team ownership, and Major League Baseball.”
The Orlando Sentinel is reporting the group’s “anchor” investor is Rick Workman, founder of Heartland Dental, with attorney John Morgan involved as well.
Schnorf also noted the Dreamers organization would be expanding and moving to new downtown Orlando office space.
Though Orlando and Tampa Bay are distinct markets, it’s highly unlikely MLB would allow an expansion team just 100 or so miles from St. Petersburg and 84 miles from downtown Orlando to downtown Tampa. In terms of media Designated Market Areas as ranked by Nielsen, Orlando is comparable to Minneapolis-St. Paul in terms of national ranking, with Orlando at #15 and the Twin Cities at #16. That’s still smaller than Tampa Bay, now the #11 media Designated Market Area, but it does make Orlando the largest U.S. media market not to host MLB baseball. The best-case scenario for Orlando: buy the Rays if the team hits the market and play out the string at Tropicana Field while a new Orlando ballpark is built, or seek an expansion team if the Rays move out of Florida. This lets the Rays to transition from one market to an adjacent market, maintaining FanDuel Sports Network and maybe keeping a Tampa Bay television audience while adding Orlando.
There’s also one more noteworthy arguing point in the Dreamers press release: the relative emphasis on tourism as a selling point for a new MLB Orlando ballpark. A truism in professional baseball for decades—at every level—has been the folly of emphasizing tourism when evaluating a market, with attendance and sponsorship revenues coming locally. We’ve seen this formula upset somewhat with the success of Allegiant Stadium, home of the NFL’s Las Vegas Raiders, as a tourism destination; tourism is also baked into the financial projections for the new Athletics Vegas ballpark. The industry giants work very hard to keep tourists from going offsite to competing attractions; Disney wants you at a theme park or two for the entire day. And building a new MLB Orlando ballpark right in the middle of Tourism Central–near the Orlando Convention Center and SeaWorld on county-owned land on International Drive–certainly won’t relieve the daily rush-hour traffic jam. Competing with Disney and Universal for tourism dollars may not be the best marketing strategy as far as MLB is concerned—indeed, the MLS and NBA teams in Orlando skew heavily toward locals and make little effort to market to tourists—so it will be interesting to see how this plays out.
Orlando joins Salt Lake City, Portland and Nashville in an early list of expansion frontrunners. We covered the Portland bid in the contest of Salt Lake City efforts last week.
Rendering courtesy Orlando Dreamers.
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