As expected, the Cleveland city council voted yesterday to approve a resolution removing FirstEnergy’s name from the Browns‘ stadium. By a 16-1 margin, the council approved a measure calling for the publicly owned stadium to be stripped of the name of the city’s electric utility following allegations that FirstEnergy bribed the then-speaker of the Ohio house in exchange for $1.3 billion in state subsidies.
Accordingly, the Browns’ stadium will now be known as … still FirstEnergy Stadium, because the city of Cleveland, despite owning the building, doesn’t own its naming rights:
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CLEVELAND:
Section 1. That this Council calls upon First Energy Corporation to relinquish its naming rights to the City’s publicly owned football stadium.
Yeah, that’ll go well. FirstEnergy’s response to the council resolution was less obstinate than entirely dismissive: “Through sponsorships like we have with the Browns, we look forward to continuing to enrich our communities for years to come.”
How exactly Cleveland ended up owning a stadium but not having any say over what it’s called — or, for that matter, any money from selling the name — points up a common misunderstanding about publicly owned sports facilities. It’s not unusual to see “And taxpayers will get to own the building!” as a benefit of a stadium deal, but really it’s not.
It’s best to think of a sports venue as two related but separate things: a building, and then all the money that is collected at that building. If you’re a sports team owner, you want only that second part, because money is, as should be self-evident, money. Ownership of a building, meanwhile, is generally mostly a headache: You have to pay property taxes on it, for starters, and you probably have to pay to maintain it, and if you want to move out (or threaten to move out) you can’t just walk away and leave taxpayers holding the bag. Sticking the public with a stadium while keeping all the revenues is like leasing a car for $0 — the team owner gets all the benefits, and none of the costs. (The Browns actually pay $250,000 a year in rent, but given that the stadium cost almost $300 million to build, that’s basically the same as $0.)
So why does Browns owner Jimmy Haslam, who incidentally has his own issues with accusations of financial shenanigans, get to keep 100% of stadium revenues, including $6 million a year from FirstEnergy for naming rights, even though he’s just a tenant? Because all the other kids are doing it, basically: When naming rights first became a thing in the 1990s, team owners demanded that they get the cash rather than the stadiums’ actual owners, and elected officials with no real expertise in negotiating sports leases generally went, Yeah, okay. At which point subsequent team owners in other cities seeking naming rights boodle could point to previous deals and shout Standard business procedure!!! and eventually no one bothered even questioning if teams should be able to sell the names of the homes they rent — though when one team tries to sell naming rights to another team’s stadium, that still raises some eyebrows.
If the Cleveland councilmembers who approved the Browns stadium deal back in 1996 had held onto the naming rights, not only could the city right now be getting $6 million a year, but it could conceivably have inserted some kind of morals clause to rescind the naming rights if the company with the name was, to pick a hypothetical example, caught up in a massive bribery scandal. Instead, the council has to settle for hoping that Haslam and/or FirstEnergy can be shamed into undoing the deal — in which case Haslam would just get to re-sell the name to some other company. If there’s a silver lining, it’s that FirstEnergy seems to be getting mostly bad publicity for it’s six mil a year; but then, naming rights paying off terribly for the companies that buy them is par for the course, and always has been, so yay, schadenfreude, I guess?
Did the Haslam’s still “save” the Browns and Crew if they used money they had illegally or improperly liberated from others to do so?
Unlike jeopardy, credit seems to attach on far less particular circumstances.
oops. *apostropherror*
The Browns, in my tainted opinion, operate with the worst source of ownership money in the league. What’s worse — calling it FirstEnergy Stadium or Haslam Stadium? A shameful name, either way.
That “source of ownership money” is Pilot Flying J truck stops, which the Haslams made famous with their Diesel Fuel Rebate Scam.
Truck stops!
Americana!
Of course!
Haslam did save the Crew because they would have moved otherwise. He’s been horrible as Browns owner. If Lerner had done an open bid process like the Bills did the Browns would have wound up with someone better.
As far as the article. Cleveland was backed into a corner back in 1995/96 where they basically had to take whatever deal the NFL offered to get a team back.
Yet he ‘saved’ the Crew with money that should have gone to Pilot J fuel customers in rebates… so who gets the credit?
As for the city, the only corner they were backed into was one they created themselves. They decided they wanted an NFL team back and would do “anything”. They did not ‘have to’ accept that deal or any other.
It is impossible to negotiate a good or fair deal on anything when you start from the position that you absolutely have to make a deal no matter what.
I hate Jimmy Haslam more than anyone other than possibly Baker Mayfield, but the Pilot cases were settled and Haslam sold the majority control in the company to Warren Buffet, one has nothing to do with the other.
They were backed into a corner because they stupidly waited until after Modell announced the team was moving to Baltimore so it was either take the deal the NFL offered or not have an NFL team. News flash: people in Ohio love football. Literally every ballot issue for sports facilities passes. The day after Modell’s announcement in Baltimore the vote to extend the Sin Tax which was enacted for the baseball stadium and basketball arena to pay for the Browns received over 70% of the vote
Warren Buffett owns truck stops!!??
Yep. Berkshire Hathaway bought 80% of Pilot Flying J a few years ago
That’s false. Central Ohio voted five times against a taxpayer-funded sports arena. So it was privately funded and then 10 years later foisted entirely on the taxpayers anyway.
And nobody was ever “backed into a corner” in Cleveland. That’s bullcrap.
And Haslam didn’t save the Crew, over $140 million in taxpayer money saved the Crew. Ever since the Columbus arena thing, they’ve since found a way for the County Commissioners to vote on all of these scams and leave the actual voting public entirely out of it. They’ve since figured out a similar way to scam the public in Northeast Ohio, as well.
Oh, and the vote to build the Cleveland baseball stadium and basketball arena passed by only 13,181 out of a total of nearly 400,000 votes. And nothing was ever voted on as to the new Browns stadium, the vote was to pay to renovate the existing stadium…which never happened.