Kansas City would receive 5% of non-baseball revenue, $1 annually from Royals under proposed lease

KANSAS CITY, Mo. — KSHB 41 reporter Tod Palmer covers sports business and eastern Jackson County, including Independence. Share your story idea with Tod.

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Kansas City wouldn’t receive a dime of baseball, gambling or broadcast revenues, but the city would receive 5% of net profits from non-baseball events under the terms of a proposed lease agreement with the Royals set for discussion Tuesday in the Finance, Governance and Public Safety Committee.

That’s in addition to the annual $1 in symbolic rent the Royals would pay to occupy a city-owned baseball stadium proposed at the site of Hallmark’s headquarters at Crown Center.

Most of the terms of the stadium lease, which sets forth an initial 30-year term with team-controlled extensions for another 10 years, are similar to existing lease conditions.

The proposed lease agreement assumes a Feb. 1, 2031, effective date with the Royals having a team option for two possible five-year extensions. It guarantees the city 30 free tickets per game and the right to host up to eight events per year at the stadium free of charge.

With the passage of Amendment 2, which narrowly legalized sports gambling in Missouri two years ago, the Royals would be allowed to operate a sportsbook at the stadium. The Royals would receive all sports-gambling revenue, and the city can’t restrict sports gambling beyond state law under the lease terms.

The Royals won’t pay property taxes on the stadium because it will be city-owned, and the lease agreement also exempts the MLB club from sales and use taxes on construction, maintenance, future improvements, utility costs and any other tenant obligations.

The lease also grants the Royals all advertising decisions and revenue, and they retain all revenue from any naming-rights agreements.

One change from the current lease at Kauffman Stadium: the Royals would pay property insurance at the new stadium. The county pays the Truman Sports Complex property insurance.

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