Ravens' cash flow finally restored Season ticket checks are beginning of end of revenue drought

June 12, 1996|By Jon Morgan | Jon Morgan,SUN STAFF

If Baltimore is as football-crazed as its reputation, the Ravens should have $30 million tucked away in the next few weeks -- the first trickle of badly needed revenue for a team that has suffered through a severe drought.

The money, mostly season ticket checks pouring in to beat today's first-day priority deadline, marks a welcome resumption of cash flow after months of paying the costs of moving to Baltimore.

The team formerly known as the Cleveland Browns announced Nov. 6 that it was moving to Baltimore. The midseason revelation prompted an immediate falloff in revenue as season tickets were not renewed, single-game ticket sales plummeted, stadium advertising was canceled and other sources of money dried up.

At the same time, the team has had to pay extraordinary costs: legal bills and settlement costs to defend against Cleveland lawsuits, moving expenses and renovation of the Owings Mills training complex.

"Let me put it this way, I borrowed enough money to get an ironing board and poster from the banks," said Ravens owner Art Modell.

The average NFL team receives $70 million a year in revenue, spread out in chunks. The largest, $36 million in network television rights, is paid in four installments between September and January. Concession sales and single-game ticket purchases also come then.

But a team can usually count on season ticket renewals and skybox rentals in the spring to keep cash flowing. Not so for the Ravens.

"Historically, all teams use season ticket advances to operate. We haven't had that," Modell said.

Today is the deadline for "first-day priority" season ticket buyers. Assuming all season and single-game tickets sell out in the next few weeks, the Ravens will receive a much-needed infusion of about $25 million. About $10 million will be paid to visiting teams over the season.

The team is also collecting $100 deposits on each season ticket sold, a down payment on permanent seat licenses that will be required at the new stadium, to open at Camden Yards in 1998. The deposits should raise another $6 million, to be followed this fall by millions more in first-year installment payments.

Stadium advertising is also being sold and local radio broadcast rights are being marketed. And the league has forwarded to teams a late spring installment of money raised on officially licensed NFL merchandise.

The cash can't come fast enough. Although the player payroll -- generally a team's biggest cost -- is paid out mostly during the season, the Ravens have had to pay incentive and signing bonuses from last season, as well as stipends for attending training camp.

Furthermore, the team has had to shell out millions of dollars in one-time expenses this off-season. Contractors were paid $2 million for renovation of the Owings Mills training complex, movers were paid and employees who stayed behind got severance.

Some of the bigger items are still pending. The first of four annual payments on the $12 million settlement with Cleveland will come due as soon as the paperwork is completed there. Another $10 million in bonds on the team's suburban training complex will have to be paid off, subject to final negotiations.

A $20 million first installment on a $29 million NFL relocation fee is also coming due soon. In addition, the NFL is going to collect a 34 percent "visitor's share" of the $65 million in seat license proceeds; Modell says he hopes that will not be until the team moves into its new stadium downtown.

Overall, the team estimates its moving-related expenses will be $125 million.

Modell has survived the drought with loans, including a $50 million line of credit by First National Bank of Maryland backed by the expected proceeds of the team's seat licenses.

"We've had some very accommodating banks," Modell said.

Modell declined to say how much he has borrowed, but said he is up against the $40 million lending cap the league puts on loans backed by each franchise. Other loans have been backed by the stadium corporation he formed to run the team's stadium operations.

"I knew this was going to happen, so we've been prepared for it. There's no shortage. I have access to many lines of credit -- all I want. The reality is we haven't been operating since Nov. 6. Now, we're coming out of it," Modell said.

Pub Date: 6/12/96

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