Lease deal for Browns is 30 years Club could receive $75 million from sale of seat licenses

Funds to cover moving cost

Owner Modell signed agreement 10 days ago

November 06, 1995|By Vito Stellino | Vito Stellino,SUN STAFF

CLEVELAND -- The Cleveland Browns have signed a 30-year lease to play in Baltimore starting in 1996, and could receive up to $75 million to cover expenses associated with their move, The Sun has learned.

John Moag, the head of the Maryland Stadium Authority, would not name the National Football League team that has signed a deal. But he confirmed publicly for the first time yesterday that a deal exists and outlined details of the agreement.

Bound by a confidentiality clause, Mr. Moag can't identify the team until Gov. Parris N. Glendening makes the announcement at a news conference outside Oriole Park at Camden Yards today, but two sources confirmed that Browns owner Art Modell signed the lease 10 days ago.

"I can only confirm a lease has been signed with an NFL team," Mr. Moag said.

The lease is basically the same deal the NFL rejected when it added two expansion teams in 1993, with the addition of a permanent-seat-license sale that could raise up to $75 million.

Those funds could cover moving ex-penses, a possible relocation fee charged by the league and the construction of a $15 million training facility.

If the Browns' expenses are less than $75 million, the Maryland Stadium Authority would get the excess money. If the expenses are more than $75 million or if the seat-license sales fall short, the Browns would be responsible for covering the shortfall.

The deal includes no attendance guarantees or any upfront money. Maryland's financial commitment is the building of a 70,000-seat, football-only stadium at Camden Yards that is expected to cost about $200 million. It must be kept as a state-of-the-art facility over the term of the lease.

The state also plans to increase the seating capacity at Memorial Stadium to the 60,000-65,000 range for the two years the Browns will play there before moving to the new stadium in 1998.

The Browns get the stadium rent-free, but have to pay for operations and maintenance, likely to cost between $3 million and $4 million a year. The 28-page lease plus addenda calls for the announcement of the Browns' move to be made after the team's final home game Dec. 17, but Mr. Modell decided last Monday to move it up to today.

Anticipating a possible legal challenge from Cleveland or the NFL or both, the lease commits Mr. Modell to join Baltimore in any court fight over the move.

The deal still has to be approved by three-quarters of the NFL owners. But since the agreement was signed Oct. 27, the Browns have been legally bound to play their games in Baltimore for 30 years.

Mr. Modell and Alfred Lerner are the team's only two major investors, and none will be added. Former Browns minority investor Bob Gries said he sold his 43 percent share because he didn't want to be involved in the move.

Maryland officials had been quoted as saying local investors would be involved in the deal, but they apparently consider Mr. Modell a local investor because he plans to move to Baltimore.

After today's news conference, Mr. Modell will fly to his Florida home, said a source familiar with his plans. Mr. Modell has no plans to return to his Cleveland home or to see any of the team's remaining three regular-season games there. He did not attend yesterday's game.

The lack of any guarantees in Baltimore means the Browns' deal isn't as lucrative as the ones the Raiders got in Oakland, Calif., and the Rams received in St. Louis or the one that Nashville,

Tenn., is offering the Houston Oilers.

The St. Louis deal has been criticized as a municipal giveaway. It raised $75 million from seat licenses, used $15 million for a training camp, covered the Rams' operating losses from their previous season, paid off $30 million in debts the team owed Southern California and the league's relocation fee of $29 million.

The Rams pay $250,000 a year in rent and play in a domed stadium that cost $260 million to build.

Mr. Modell, who bought the Browns in 1961, is making a huge financial bet on the appetite of Baltimore fans for football.

Seat licenses -- one-time fees that give fans the right to buy season tickets -- have been a tough sell at times.

Charlotte fell about 10,000 short of its 60,000 goal, and only 36,000 were sold this spring in Oakland.

It would take the sale of 50,000 seat licenses at an average price of $1,500 -- some would be higher and some lower -- to raise $75 million.

Baltimore shouldn't have any trouble selling 100 luxury boxes and 7,500 club seats, because it sold them during the expansion effort. The stadium authority still has more than $2.5 million left in the bank from fans who bought boxes and club seats and kept the money on deposit.

But seat licenses are a new concept and weren't sold during the expansion drive in Baltimore.

Mr. Moag said he has had talks with former Missouri Sen. Thomas Eagleton, who spearheaded St. Louis' drive to lure the Rams, about the successful seat-license campaign in St. Louis.

"We want to learn what works and what doesn't," Moag said.

Ticket sales probably won't begin for two or three months.

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