FINANCIAL DATA ON GATEWAY FACILITIES

It may be hard to believe but the Cleveland Indians, not the Gateway Economic Development Corp., will be paying for current improvement at Progressive Field. That’s what Gateway says.

Here’s what Gateway says the major capital improvement at Progressive Field are:

– Sound System – $4,760,000.
– High Structural Steel – from $725,000 to $2,184,230.
– Concrete resurfacing – $3,000,000.

For a total of some $9,944,230, according to an e-mail from Brian Kelly, Gateway’s financial official.

“They are paying for this,” he writes in an e-mail. The Gateway web site is probably the worse you would ever see from any organization. It doesn’t even list its officials or board members.

Quicken Loans Arena will have the following major capital improvements made:

– Roofing (flat & curved) $4,174,050.
– Safety & Security Systems $3,090,000.
– Scoreboard & Digital Display $9,357,611.
– Video Production $4,645,828.
– Bowl and Sound Amplifiers $1,800,000.

A total of $23,067,489, according to Gateway. I was unable to find out as this article was being done whether Gilbert will pay for all this. Kelly was out of the office and director Todd Greathouse was unavailable.

However, it appears that rent for both the Indians and the Cleveland Cavaliers – Larry Dolan and Dan Gilbert – has disappeared.

My question about the portion of the price of an Indians and Cavs seating ticket presently paid to Gateway, says Kelly, is ZERO.

My question of the portion of the loge seating income from both Progressive Field and Quicken Arena paid Gateway for use of the two sports facilities is ZERO.
Previously, the teams paid according to sales of tickets, loges and other premium seating.
When Gateway was established the rental charges were as follows:
For the baseball stadium:

Not a cent paid until 1,850,000 seats were sold. From that figure to 2,250,000 the team had to pay a meager 75 cents per ticket sold; above that figure Gateway was to receive a slight increase to $1.25 per ticket.

The Cavaliers similarly would pay nothing until attendance reached 1,850,000 and then 75 cents per ticket over that figure to 2.5 million attendance and a meager $l.00 per ticket sales of more than 2.5 million.

These figures were taken from Mark Rosentraub’s 1997 “Major League Lo$ers – The Real Cost of Sports and Who’s Paying for it.”

Rosentraub, who later became a Gateway board member, also published in the book “estimated payments of the Cleveland Indians to Gateway” from 1994 to 2024.
Using estimates that certainly won’t be achieved at Progressive Field without a significant change. For 2014 he estimated 3 million in attendance and a $1.49 million rent based on attendance.

For Quicken Arena, Rosentraub estimated suite sales at a consistent $10.5 million annually with Gateway receiving $2,887,500 annually and club seat sales of $6.079 million with Gateway receiving annually almost an additional $3 million.

The new deal calls for no payment at all at any attendance.

The teams also have use of the facilities for other than the team events.
For example, Quick Loans Arena calls itself the host of “world-class shows and events.” Gilbert takes all the dough.

  • It lists on its web site the following events, money-makers for Gilbert’s operation last year:
    16 Disney on Ice shows; 4 Monster Jam shows; the Moondog Coronation Ball; 10 circus shows; the WWE Raw (whatever that is) 2 Trans-Siberian Orchestra shows; Scott Hamilton & Friends.
  • And concerts: Muse; Bon Jovi; Taylor Swift; New Kids on the Block; Fleetwood Mac; Eagles; Justin Bieber; Michael Buble; Chris Tomlin; Pink; Justin Timberlake; Donny and Marie.

Thank you taxpayers of Cuyahoga County.

A major problem with Gateway, a non-profit set up largely with public funding since the early 1990s, rarely gives public reports of its financial dealing with the two sports teams.
You would think that the Gateway board, typically made up of appointees of the City of Cleveland and Cuyahoga County, would make the public aware of what it is doing. It rarely holds public meetings and they are typically devoid of real public information.

You might also think that the major media – the Plain Dealer and television news, both providing huge amount of coverage to the two teams, would assign reporters to let the public know what it is paying and what it is getting from these two major sports facilities they essentially own. Silly you.

But there’s almost total silence on the business end of reporting by any portion of the news media – from the weak public radio and TV to the nearly totally negligent mainstream media.

They simply don’t care. The Pee Dee provides ample proof of that.

It is rather amazing that in the last three Sunday Plain Dealer edition 68 pages – 68 full newspaper pages of our skimpy newspaper – have been devoted to sports, more than 7,000 inches of editorial space for essentially sports propaganda. The ads to support that amount of space – a measly 456 inches. That doesn’t include, for example, front page sports articles. It doesn’t even include a front page puff piece of 56 inches on the front page and 120 (full page) run-over inches by Terry Pluto last week on the Cleveland Cavalier boss Gilbert and LeBron. Stuff we’ve read over and over.

This occurs when newspapers are struggling financially to stay afloat. It’s amazingly bad business.

Finally, we still don’t know why – if the teams are paying for capital improvements – we passed a 20-year extended sin tax that should raise at least $260 million starting sometime next year.

And strangely, the present sin tax, which continues collection into 2015, no longer accounts for its income, according to County officials. I have not gotten a promised explanation for this change in monthly reports.

The last report I received from Cuyahoga County listed collections from August 2005 when the 10-year extended sin tax was June 2014 when Cuyahoga County taxpayers paid $120,384,955 in sin taxes for the Browns stadium. This is added to the $240 million paid previously and more than $100 million paid for extra bonds let by the County.

I was told by a County official she was looking into why the reports have stopped being made public.

Assuredly, you will find coverage of the coming basketball season here in Cleveland to be more obnoxious than the political TV ads that upset your stomach but will soon end.

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