Newspaper article The Florida Times Union

Busted! Quoth the Bank, Nevermore Ravens in Financial Trouble after Move from Cleveland

Newspaper article The Florida Times Union

Busted! Quoth the Bank, Nevermore Ravens in Financial Trouble after Move from Cleveland

Article excerpt

DALLAS -- With the National Football League just about ready to begin a new season, let's consider the strange case of one Arthur B. Modell, sports impresario for the better part of four decades.

Modell, at age 35, made a savvy investment.

He put up $250,000, all but $25,000 of it borrowed, to join a group that bought the Cleveland Browns for $4 million in 1961. As the National Football League prospered, so did Modell, and the value of his team skyrocketed.

After years of success in Cleveland, Modell didn't think he could persuade taxpayers to make him wealthier with a new stadium, so he jumped to Baltimore, a former NFL city so desperate for a team that it offered a new, rent-free stadium worth $222 million.

Christening his team the Ravens, Modell should have had it made.

It didn't turn out that way.

Facing heat from his lenders, Modell had to beg financial aid from the NFL, which this month borrowed $85 million from Chase Manhattan Bank Corp. to keep the Ravens afloat. Chase Manhattan's money comes in two forms a $55 million loan and $30 million in revolving credit.

"How any NFL owner could screw it up, it's just hard to imagine," said Howard Bloom, publisher of Sports Business News, an industry newsletter.

It's commonplace to hear baseball or hockey owners bemoan their financial straits. Football is different. Rich television contracts, providing each team $76 million a year, mean that no NFL franchise is poor, even one that plays in little Green Bay, Wis. A salary cap on players' pay keeps owners from spending recklessly on talent.

When all else fails, cities are standing in line to toss out millions of dollars for the distinction of playing host to a franchise.

All in all, it's a pretty foolproof business.

The NFL hasn't had to bail out an owner since 1989, when Victor Kiam ran into trouble with the New England Patriots.

How did Art Modell stumble in one of the world's easiest businesses?

The old-fashioned way.

Debt. A lot of it.

To get out of Cleveland, Modell borrowed $185 million from Fleet Financial Group Inc., a major sports lender.

Modell used part of the money to buy out minority partners, who didn't want to walk out on the legion of loyal fans who made Browns games sellouts. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.