Art Modell Hostage Economics Do Not Keep Cleveland Strong

by Cleveland Frowns on May 6, 2014

The worst thing about the pro-sin tax (pro-Issue 7) “Keep Cleveland Strong” campaign is that it’s based entirely on a threat that the billionaire owners of the Browns, Cavaliers and Indians would somehow weaken Cleveland if they didn’t receive another $300 million handout to go on top of the $1 billion-plus in public subsidies that they’ve already received to run their hugely profitable sports franchises. More specifically, the owners are threatening that one or more of the three teams might leave town if these handouts from taxpayers stop or even slow down.

Last Sunday evening, Cavaliers and Quicken Loans Arena CEO Len Komoroski communicated this threat explicitly on Mansfield Frazier’s “The Forum” program on WTAM 1100, where he dodged my questions about why Dan Gilbert can’t pay his own business expenses by repeatedly referring to Art Modell as a “case study,” and citing to other historical examples of pro sports teams relocating.* It’s a threat that’s obviously intended to prey on the weakness of Cleveland sports fans who are still scarred from Modell moving the Browns to Baltimore back in the 1990s.

Apart from the fact that what we’re talking about here is extortion, it’s worth considering what little sense it makes to believe that one of Cleveland’s teams would leave town if voters were to reject Issue 7.

There are only so many regions in the U.S. that have the infrastructure and fanbase (TV market) to support pro sports franchises, and Northeast Ohio is one of them. Where the market exists, the sports leagues will too. A brief review of the history of franchise relocations in the NBA, NFL and MLB shows that these leagues maintain franchises in all but two of the combined 72 U.S. regions in which they were resident 25 years ago. The only two exceptions of the last quarter century are with the NBA in Seattle, where Sonics owner Howard Schultz sold the franchise to a group that allegedly misled him into believing it intended to keep the team in town, prompting litigation to rescind the sale, and with the NFL in Los Angeles, where the Rams drew only 25,750 fans for their last game at Anaheim Stadium and the Raiders regularly struggled to keep the L.A. Coliseum half full. It’s extremely rare for any of the three leagues to abandon a viable market, and when it happens, it’s only under the most unique of circumstances.

As infrequently as it’s happened over the last few decades, the abandonment of viable sports markets continues to become an increasingly unlikely proposition, as national public opinion continues to turn against public subsidies for these privately owned franchises. As inequality continues to worsen in the wake of the Great Recession, these subsidies have come under unprecedented public scrutiny, and are being rejected by voters across the country with unprecedented frequency. It’s not the 1990’s anymore, and apart from the fact that none of Cleveland’s three sport-specific facilities will ever become the mess that old Municipal Stadium was, the likelihood of another city luring away a sports team with a deal anything like the one that Baltimore gave to Modell in ’95 is zero. As in Cleveland, there’s no reason for voters anywhere to believe that pro sports owners can’t and shouldn’t pay their own costs to run these hugely profitable businesses.

And when voters in one city reject this form of regressive corporate welfare, as just happened in Miami where the Dolphins owner shortly admitted that he could pay for the requested stadium improvements himself, it only makes it easier for voters everywhere else to do the same. Issue 7 represents not only an opportunity for Cuyahoga County taxpayers to obtain a better deal from Cleveland’s pro sports owners, but also to participate in a sorely needed movement for a more equitable relationship between rank-and-file taxpayers and pro-sports-owner-types, nationwide. If Issue 7 is approved, that opportunity will have been squandered, and local taxpayers will be stuck as ever with the burden of the lopsided owner-friendly leases that were struck three decades ago.

Which, again, is all apart from the fact that what we’re talking about here is extortion. Caving to onerous demands by pro sports owners willing to prey on the public’s fear of losing a team is what got us into this mess in the first place. In a city with more than half its children living in poverty, the second-worst public school system in the nation, third-world infant mortality rates, a rapidly shrinking population, and a vanishing job market and middle class, it could hardly be a worse time to rubber stamp the same deal all over again with no questions asked.

If the owners really won’t come to the table and renegotiate these lopsided agreements like any decent partner would under such circumstances, we should at least make them come out and say as much, and explain why they need the public to continue to bear their costs while they derive untold profits from these franchises. From there we could proceed with a better way to move forward that won’t exert a disproportionate burden on the County’s least fortunate residents.

Today is election day. Please vote No on Issue 7.

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RELATED: What it really means to say, “Keep Cleveland Strong

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*Komoroski also tried to argue that the sin tax was not a subsidy to the sports owners. The last 40 minutes of his appearance with me on 1100 AM the other night is worth a listen.

  • http://www.clevelandfrowns.com/ Cleveland Frowns

    Komoroski wasn’t scheduled to appear on the program. Someone at Quicken Loans (or Keep Cleveland Strong) headquarters must not have liked the way the conversation was going on Cleveland’s highest wattage radio station, so he ended up calling in in a bit of a huff. That starts at about 26 minutes of the second segment of the program linked here: http://www.wtam.com/media/podcast-the-forum-with-mansfield-frazier-TheForum/54-the-forum-hour-2-24719116/

    But again, the third segment is where things really get good. http://www.wtam.com/media/podcast-the-forum-with-mansfield-frazier-TheForum/54-the-forum-hour-3-24719170/

    • nj0

      Just listened. Well done.

      My take away: So if issue 7 doesn’t pass, Cleveland won’t get the RNC.

      • bupalos

        But it’s worth 4 superbowls!!! bwhahahahahaaa

  • New Reality

    Can’t speak evil of the “job creators”. We patiently wait for their golden ejaculate that makes many minimum wage jobs and then they tax us to redistribute the wealth back their way. How awesome is that?

  • Chris Mc

    I can’t find it online, but I saw an ad last night that made my jaw drop. It said something to the effect of “If issue 7 doesn’t pass, that could mean millions more for BIG TOBACCO“.

    I tried to figure out a way to describe how intellectually dishonest that statement is, but I’m completely speechless.

    It would also be nice if WKYC had some sort of social conscience about airing an ad that is so blatantly untrue, but I suppose that would be too much to ask for.

    • Hopwin

      I saw that ad too, didn’t they also reference bars/convenience store owners as the primary backers as well?

      • Chris Mc

        I didn’t catch that part. If they bluntly asked who I would rather see have the money: billionaire carpetbaggers / oil barons / multi multimillionaire lawyers or small businesses, I’m not sure there’s much of a discussion.

    • nj0

      If the Townshend Revenue Act doesn’t pass, that could mean millions more for BIG TEA.

  • Ess_Eh

    I know it is super secret, but is there any ballpark figure on how much profit these teams make?

    • nj0

      Opportunity to use one of my favorite quotes – “You go through the Sporting News for the last 100 years and you will find two things are always true: you never have enough pitching and nobody ever made money.” – Donald Fehr

      I have never seen any serious attempts to look at how much of a profit organizations turn year to year. Forbes and some other do those value lists, but those seem to be cobbled together from other sources. Even if those numbers are somewhat legit, anyone who has taken an accounting class knows how ethereal financials can be. I just look at the way billionaires line up to own these teams when they go on sale. That tells me everything I need to know.

      • http://www.clevelandfrowns.com/ Cleveland Frowns

        The fact that Randy Lerner sold the Browns (the Browns) for $500 million more than what his dad bought them for 13 years earlier (10 seasons with 10 losses or more, zero playoff wins) tells you all you need to know.

  • bupalos

    Let’s put Art Model’s demon spawn to bed today. VOTE VOTE VOTE

  • nj0

    The thought occurred to me today driving to work – Cleveland lost the Browns because of the Sin Tax.

    Gateway allowed the Indians to move from Municipal Stadium which resulted in a loss of revenue for Art. Basically, it forced his hand.

    The tax and Gateway were ill thought out policy. Leaders neither considered nor planned to deal with the consequences it would cause.

    The Sin Tax has always hurt the Cleveland.

    • bupalos

      Very true. And when you place that bad policy in the national sports franchise arena with the hostage economy writ large, poof, no more Browns. Ravens. er….Colts. Whatever. And then poof, back again, gone again, back again and the only thing that changes over the long haul is several billion flowing out to owners.

      The fundamental problem is that the cities need to understand they are in a position of strength, which they undermine by believing in and contributing to this hostage economy. If the pro sports cities unionized, they would reap billions in savings and secure their teams forever. Even a union of 10 cities could destroy the system. For the most part, the markets are the markets. Cleveland’s inferiority complex is a real problem here.

      • nj0

        Very true. It’d only take a handful of cities to make such a union work.

        What I find humorous is how every fan base worries about their team leaving. Heard a lot of that from Bills fans after the recent passing of Ralph Wilson. Vikings were moving if they didn’t get a new stadium. Jaguars are always about to relocate. Because apparently LA, London, Mexico City, and Las Vegas are all going to get new teams soon. It buggers belief.

        And it’s even worse in MLB. Tampa Bay was always the destination of teams looking for a handout. And once baseball put a team there, people got to see how weak of a market big, scary west Florida really is. And that’s not even to get into the television territories and the blood owners would spill over them.

  • bupalos

    Wow did you ever work it Frownie! Just listened and you did a great job of trying to make their threat explicit. They clearly want to make the threat without making it. Listen to how much he starts stammering and shifting when he “accidentally” mentioned Model the second time.

    I think it’s a good idea to expose that and expose how phony the threat is now (and, to a greater extent that is recognized, was then). They staged an execution with the Browns, and despite the fact that the body is as alive as ever and walking around churning up millions of dollars, they still want to live off that fraud.

    • nj0

      I have to wonder – did The Powers That Be expect any resistance on this issue? They sure seem surprised and/or insulted that citizens would even consider objecting to the continuation of the corporate welfare state.

      • bupalos

        I do think they thought this would be a lot easier, though even running it a year early (the existing tax isn’t expiring this year) suggests they may know the ground is shifting.

        • nj0

          I assume that if it does go down, they’ll redouble their efforts next election.

  • alexb

    hey Pete, I caught you on bull and fox yesterday for a few minutes while driving…you have that full audio up somewhere?

  • Joe Bialek

    This issue is the absurdity of absurdities. Let me get this straight: the purpose of the Sin Tax is to gouge those who purchase alcohol and cigarettes not because anyone is trying to discourage consumption but rather so the County can use that money to pay for sports stadiums that do not produce anything but a fleeting moment witnessing the passing of a football, the dribbling of a basketball and the throwing of a baseball so that such a minute tidbit of diversion can be enjoyed by all. The stupidity of this proposition is enough to make your head spin even though the spin doctors advocating passage of this nonsense are already doing a pretty good job of hypnotizing the voters to actually consider supporting it. At least the Robber Barons of the previous centuries provided something tangible such as oil, steel, railroads etcetera. These team owners do not even provide one tangible thing that could ever be considered with the term “value added.” Almost everyone discusses this “enterprise” as though it is the same thing as industry {which it is not}. The price of admission is essentially a voluntary tax paid by those who can afford it to pay those who don’t need it. If this isn’t a transfer of wealth I don’t know what is.

    The real outrage here is the fact that taxes on alcohol and cigarettes will not be used to aid in the reduction of addiction {hence the reference to “sin”} but rather to stuff the pockets of all three teams who could easily afford to pay for the repairs themselves. The vote was rammed through the last time {under somewhat suspicious circumstances} and hear we go again. But this time…not so fast! We the voters of Cuyahoga County are going to fight the proponents on this one and we don’t care if the teams up and go somewhere else {please see my views on entertainment below} because quite frankly there are simply more important things than sports and the unearned money that comes with it. Those in public office who are too stupid and lazy to find other ways to grow a major American city need to resign and leave their self-seeking political ambitions on the scrapheap of history. Don’t ever let it be said that this was time when the tide ran out on Cuyahoga County but rather was the time when the voters rose up to welcome the rising tide of change and rebuked this pathetic paradigm our previous elected leaders embraced. Let the battle be joined.

    And now to the real underlying issue at hand:

    One of the most disturbing facts about our capitalist nation is the misappropriation of funds directed to the salaries of entertainers. Everyone should agree that the value an athlete, movie star, talk-show host, team-owner, etcetera brings to the average citizen is very small. Granted, they do offer a minuscule of diversion from our daily trials and tribulations as did the jesters in the king’s court during the middle ages. But to allow these entertainers to horde such great amounts of wealth at the expense of more benevolent societal programs is unacceptable. They do not provide a product or a service so why are they rewarded as such?

    Our society is also subjected to the “profound wisdom” of these people because it equates wealth with influence. Perhaps a solution to this problem and a alternative to defeated school levies, crumbling infrastructures, as well as all the programs established to help feed, clothe and shelter those who cannot help themselves would be to tax this undeserved wealth. Entertainers could keep 1% of the gross earnings reaped from their endeavor and 99% could be deposited into the public coffers

    The old ideas of the redistribution of wealth have failed, and it is time to adapt to modern-day preferences. People put their money into entertainment above everything else; isn’t it time to tap that wealth? Does anyone think this will reduce the quality of entertainment? It seems to me that when entertainers received less income, the quality was much higher.

    • http://www.clevelandfrowns.com/ Cleveland Frowns

      Got it, Joe.

    • beeej

      I am really looking forward to never seeing this comment again after today.

      • Steve

        That only happens if the issue passes. If it doesn’t, we’re going to have six (or twelve) months of fighting and Bialek-ing on our hands.

        I think I can take Joe for another year if it means this gets voted down three times.

      • bupalos

        While it’s the absurdity of absurdities, I think this thing is a meme now.

        • http://www.clevelandfrowns.com/ Cleveland Frowns

          The absurdity of my absurdity is my friend.

  • http://www.clevelandfrowns.com/ Cleveland Frowns

    Sam Allard at Scene says Make Cleveland Strong by voting NO on Issue 7:

    Excerpt below, read the whole thing it’s well done: http://www.clevescene.com/scene-and-heard/archives/2014/05/06/editorial-make-cleveland-strong-vote-no-on-issue-7

    “HAVING SPOKEN EXTENSIVELY WITH PEOPLE ON BOTH SIDES OF THE ISSUE, let me say publicly and confidently that a NO VOTE constitutes an actual commitment to Cleveland. A NO vote is an essential early step not in “keeping” Cleveland strong, but MAKING her strong. I know this sounds dramatic, but as a reporter on this I’ve been in the weeds, and the people in power (at the GCP, at the Cavs, at the Indians, at the Browns, at — regrettably — City Hall) aren’t even aware how deeply entrenched they are in their ways. They don’t even recognize this as greed. They are confused by the opposition, unwilling to engage in constructive discussions (farming out their legwork to strategy groups and PR firms), and so distantly out-of-touch with actual residents in Cleveland’s urban neighborhoods that they literally put “poor people” in quotation marks.

    “The publicity campaigns? The “tourism sector”? The non-stop assertions that by financing facilities and services for upper middle class folks and visitors we are creating an atmosphere of vibrancy and strength? The evidence is quite to the contrary. These “leaders” are Keeping Cleveland Weak, and the cognitive disconnects are so baffling and Orwellian it’s enough to make a journalist throw up his hands.”

    • Hopwin

      In the spirit of Joe:

      Maybe the people of Cleveland could make it strong by not voting for the same “leaders” over and over again? Perhaps the cause of the problem he alludes to in his op-ed is that the citizens of Cleveland keep voting the same lines without recognizing that the line keep moving farther and farther away from them and their needs.

  • bupalos

    We lost that round and its depressing that the hostage economy gets another shot in the arm and the city another shot in the nuts. But man, I can hardly express how impressed I am with how hard you pushed that…and how sleazy the other side had to go. Listening to 92.3 around 4-6 they were breaking in every 20 minutes with the “news” that there were just a few hours left to vote on whether to extend the sin tax to “pay for arena and stadium REPAIRS that were obligated in the existing lease…” Then they actually ran audio from the cavs CEO guy. This was a continual “news update.” Pretty sick shit. Now let’s just watch how fast the words “repairs” and “crumbling” are now replaced with “upgrades” and “state of the art.”

    I’m sure it feels pretty shitty tonight but everything that is done to help expose this racket moves us in the right direction. Seriously thankful for the work you did here.

    • NeedsFoodBadly

      Me too.

      I’m glad that people were/are putting up the fight in Cleveland against this sort of thing. A similar deal was passed in Indianapolis for the Pacers, and I don’t recall anyone saying boo about it. It wasn’t even put up for a vote.

      Keep fighting it!

    • Hopwin

      I heard them play Pete’s argumetn in the updates. Do we have different radio stations?

    • Chris Mc

      The sheeple have spoken.

  • Warburton MacKinnon

    Frowns,don’t get me wrong you are right on the trends and people paying more attention to these things,but that is on the long term scale,not the short run that seems to be how poloticians and buisiness folk work on. You also somewhat misinterperet I think WHY folks are willing to give these breaks to sports owners, since the 80′s around the great lakes,the rust belt, people equate keeping teams the same way they equate tax breaks to other big corperations. That is it means we won’t lose MORE jobs….to many voters one is the same as another,and if we can tax someone doing something we don’t like and we don’t do to pay for it awsome. Others might remember that Art was resposible for upkeep at Munincipal,and we saw how that worked for the city. Just unsure as of yet there are enough voters not scarred by job and team loss in Cleveland for the support you need to oppose the sin tax. thenaga in I didn’t think back in the 80′s Cleveland would refuse funds to Art,but we did….maybe common sense will prevail,but that common sense was always something Art pointed at for why he did what he did. Completely agree with you but I think for many cities in and around the great lakes it is a lot deeper that what’s right or wrong.

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