When 70,000 fans just aren't enough Cleveland: Problem for the Browns is the stadium, not the support.

November 04, 1995|By Jon Morgan | Jon Morgan,SUN STAFF

It's one of the most storied and successful franchises in the NFL, rich in history and blessed with some of the most energetic and faithful fans in all of football.

So what owner in his right mind would take the Browns out of Cleveland? A smart one, that's who.

Despite the irrefutable enthusiasm of Browns fans, who trekked to Cleveland Stadium in numbers averaging 70,000 last season, many tossing celebratory dog biscuits from the end-zone "Dawg Pound," the team and its facility have fallen way behind the standard of NFL economics.

And Baltimore, for all its geo-political shortcomings in the mind of NFL demographers, makes an impressive case for economics: a $200 million, publicly funded stadium to be built adjacent to Oriole Park with enough premium seats and suites to keep the entire Fortune 500 happy.

In contrast, Cleveland Stadium is old, its retrofitted luxury seats command low rents, and the lease is one of the worst in the NFL. The city has assembled a deal to spend $170 million renovating the facility, but experts say there is a limit to what can be done to a stadium that was built in 1931 and designed for Olympic track and field competition.

"Cleveland Stadium is one of the worst stadiums in the NFL. You can actually look up and see concrete that looks like it is going to fall on you," said Paul Much, senior managing director, Houlihan Lokey Howard & Zukin in Chicago and an expert in sports finances.

Whatever the emotional attachment Clevelanders may have to the stadium, which has been host to everything from a Billy Graham Crusade to the Rolling Stones and was home to the Indians before they moved to a new home last year, it is completely unsuited to the modern NFL, Mr. Much said.

And that is fatal in a league that is increasingly dividing itself into have and have-not franchises, he said.

This is due to the peculiarities of the NFL, where teams share equally in 90 percent of their combined revenue -- mostly from network television contracts -- and operate under a revenue-sharing plan with its players.

Most stadium income is not shared with visiting teams and does not count under the formula that determines the players' share of revenue. This puts a high premium on the money that can be raised from such things as sky-box rents, food sales, parking and stadium advertising.

The additional income not only contributes to profitability, but allows teams to spend money on non-capped expenditures, such as coaches' pay and training facilities. It also allows teams greater flexibility in structuring player contracts, such as front-loading them with signing bonuses that, for cap purposes, can be accounted for throughout the term.

A player is far more likely to take a $10 million, five-year deal if he can get $5 million up front and $1 million a year. A poorer team would have to pay $2 million a year. Such accounting has been the source of friction recently between the league and the Dallas Cowboys, who use extensive stadium revenue to acquire top talent such as Deion Sanders.

"In the NFL of the future, you need at least $20 million a year of stadium economics to remain competitive," Mr. Much said.

But the NFL now includes teams with widely varying stadium income: Dallas makes an estimated $35 million to $40 million from it, and the Detroit Lions, where the city claims all such income, get none. Cleveland falls on the lower end, at about $8 million.

"In the old stadium, Cleveland would be left in the dust," Mr. Much said.

The desire to cash in on lucrative stadium deals explains why two teams left the vast Los Angeles market in favor of Oakland, Calif., and St. Louis.

Moving the Browns to Baltimore immediately would increase the value, profitability and competitiveness of the franchise, Mr. Much said. An analysis by The Sun suggests that a team playing in a new Baltimore stadium could earn an operating profit of $30 million a year on revenues of $85 million, of which $18 million would come from concessions, parking, ads and premium seats.

In contrast, Financial World magazine, using a similar analysis, estimates the Browns currently earn an operating profit of $6 million on revenues of $64 million.

Renovations would help, but the poor sight lines and ambience still would limit the prices that can be charged and the amenities that can be sold. And the city was asking the team to contribute to the costs.

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