Cleveland Browns Relocation Controversy - Early Stages of The Move

Early Stages of The Move

In 1973, then-Browns owner Art Modell signed a 25-year lease to operate Cleveland Stadium. Modell's newly formed company, Stadium Corporation, assumed the expenses of operations from the city, freeing up tax dollars for other purposes. Also, Modell would pay an annual rent of $150,000 for the first five years and $200,000 afterwards to the city. In exchange, Modell would receive all revenue generated by the stadium. Stadium Corp invested in improvements, including new electronic scoreboards and luxury suites. Renting the suites and the scoreboard advertising generated substantial revenue for Stadium Corp and Modell.

However, Modell refused to share the suite revenue with the Cleveland Indians Major League Baseball team (which also played at Cleveland Stadium), even though much of the revenues were generated during baseball games as well as football games.

Financial problems eventually led to Modell moving the Browns. In 1994, the Indians prevailed upon the local governments and voters and convinced them to build them their own facility where they controlled the suite revenue. Modell, mistakenly believing that his revenues were not endangered, refused to participate in the Gateway Project that built Jacobs Field for the Indians and Gund Arena for the NBA's Cleveland Cavaliers. Modell's assumptions proved incorrect, and Stadium Corp's suite revenues declined sharply when the Indians moved from the stadium to Jacobs Field in 1994. Soaring player costs and deficits also contributed to Modell's financial losses. Modell lost $21 million between 1993 and 1994.