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Posted: Mon Jul 12, 2021 8:23 am
The Indians’ future in Cleveland: Relocation questions, ownership status, payroll and more in the spotlight
Zack Meisel, Jason Lloyd, and Bill Shea 1h ago 15
After 120 years on the shores of Lake Erie, the future of Cleveland’s baseball team is at a crossroads. The team’s controversial nickname is about to be retired, payroll has been slashed to its lowest figure in a decade and, most notably, the lease on Progressive Field is set to expire in two years while questions linger about the future ownership of the club.
The looming changes sounded enough alarms that even team employees started to wonder where this was all headed. Finally, the question was posed to owner Paul Dolan over the winter during a regularly scheduled video conference with members of the organization.
What is happening? Is the franchise moving to Nashville? Are our jobs safe? Is the team’s tenure in Cleveland on borrowed time?
Dolan’s answer was resounding: We aren’t leaving.
“The franchise isn’t going anywhere,” a high-ranking team official told The Athletic, an assertion several other sources echoed, and one Dolan has stressed internally. The Indians have no plans to abandon Cleveland.
Nevertheless, drastic change is approaching. Indians officials continue to insist the team operates in the red on a near-annual basis and that it will require several years to recover from the financial damage inflicted by the pandemic. After more than a century with the same nickname, the organization is undertaking a branding overhaul, with a new moniker, logo and uniforms in development.
The team, city and stadium landlord Gateway Corp. are nearing an agreement on an extension on the Progressive Field lease, according to multiple sources. The current pact lapses after the 2023 season, the ballpark’s 30th in the heart of downtown Cleveland.
The franchise also seems to be moving toward change at the top, with Dolan conveying interest in identifying a new minority investor. At least one candidate has emerged: Stanley Middleman, the founder and CEO of New Jersey-based Freedom Mortgage, one of the nation’s largest FHA and VA lenders. Middleman, 67, has discussed purchasing a minority share in the Indians, several sources with knowledge of the talks told The Athletic.
Two sources noted there are other interested suitors and it remains unclear how far along conversations with Middleman or anyone else have progressed. Multiple attempts to reach Middleman were unsuccessful. Dolan declined to comment through a team spokesman when The Athletic presented him with a list of questions. One source indicated Dolan has no immediate plans to sell a majority share of the franchise.
For now, the stake previously belonging to businessman John Sherman, who owned nearly 30 percent of the team, remains in escrow. Sherman purchased a minority interest in the Indians in 2016, with the deal including a path to majority ownership over a period of time left to Dolan’s discretion. A similar arrangement could be reached with Middleman or any other prospective investor. Sherman’s hometown Kansas City Royals became available in 2019, driving him to pivot and leaving all parties involved to hunt for his replacement.
With such uncertainty, The Athletic spent six months assessing the state of the organization, examining the real estate around Progressive Field, speaking to officials in Nashville who dismissed the idea of bringing the Indians to the Music City and diving into the background of the Dolan family to better grasp the team’s financial situation. All roads lead to the same question:
What is the future of baseball in Cleveland?
First baseman Bobby Bradley rounds the bases after hitting a game-winning home run for the Indians against the Royals on Friday night. (Ken Blaze / USA Today)
One source with knowledge of the city’s sports and financial landscape said he has long feared Cleveland can’t sustain three major professional teams, and he stressed the Browns certainly aren’t going anywhere. The Cavaliers are shielded by the NBA’s salary cap and booming television contract, which ease concerns about market size and make its franchises financially viable. The Cavs’ lease on Rocket Mortgage FieldHouse extends through 2034.
That leaves the Indians as perhaps the most vulnerable for now, although a lease extension and infusion of cash from a minority partner, two priorities on ownership’s agenda, would alleviate concerns.
“Something fundamentally has to change,” the source said.
The Dolans are the longest-tenured owners in the history of the franchise, which was a charter member of the American League. They bought the team for $323 million in 1999 following a failed bid to buy the Browns. Forbes estimated in March the franchise is now worth $1.16 billion. When The Athletic asked Dolan during a wide-ranging interview in 2019 why the family owns the team despite its contention of consistent financial pitfalls, Dolan identified the increasing value of the organization.
Dolan, who took over as controller of the organization from his father, Larry, in 2013, routinely cites he is a fifth-generation Cleveland native. Those roots provided the impetus for the family to pursue ownership in the first place, and that serves as motivation for preserving the franchise’s presence in the area.
“I can’t see any chance under a Dolan ownership that the team moves,” said an industry source with intimate knowledge of the Indians’ financials. “One of the reasons they bought it was to impact the community positively.”
But can the family of lawyers maintain stewardship in a league filled with billionaire owners who treat their teams as hobbies? The Dolans run the Indians as a business, and they claim their annual balance sheet typically involves losses in the tens of millions. Of course, that didn’t scare off Sherman, who supplied the Indians with a financial injection from 2016-19 before he returned to Kansas City.
Negotiations on extending the ballpark lease began with regular meetings in September 2019 and have continued for nearly two years.
Progressive Field, which opened in 1994, remains a jewel among MLB stadiums, in part because of a series of privately funded renovations over the last decade. The most recent included $40 million in upgrades in 2015, which included the creation of The Corner, the popular hangout in the right-field grandstands.
All of the updates to this point have been to fan-facing areas: scoreboards, upper-deck seating and suites. Much of the service level, the clubhouses and administrative offices have not been renovated.
Other teams, such as the Rangers and Braves, have abandoned their similarly aged ballparks and constructed new venues. That’s not realistic in Cleveland, where parties on all sides realize that passing legislation for another publicly funded baseball stadium here is a non-starter. Rather, at least a few city leaders believe Progressive Field can join the ranks of Wrigley Field, Fenway Park, Dodger Stadium and other iconic ballparks that endure for generations.
What remains to be seen is how the November elections might impact lease negotiations. A new Cleveland mayor will be elected in four months since Frank Jackson is not seeking a fifth term, while 15 of the 17 City Council seats face opposition this fall. Negotiators are concerned how the political uncertainty could delay any deal getting approved by city legislators.
There has been no indication that lease negotiations have fueled ultimatums or threats of relocation, as was the case with the Indians in 1990 and the Browns a few years later. After Art Modell uprooted Cleveland’s football team and planted it in Baltimore, the state of Ohio enacted the “Modell Law” in June 1996, which complicates the process of moving a franchise. A team receiving taxpayer support cannot relocate without permission from its home city or without granting at least six months’ notice to allow anyone an opportunity to purchase the team and prevent it from moving. That mandate helped to keep the Columbus Crew from moving in 2018, as the Haslams, who own the Browns, bought the soccer team.
Indians superfan John Adams sits alone with his drum in the bleachers during a 2019 game against the Tigers. (David Richard / USA Today)
There is at least one city prowling for a baseball franchise, a city some have speculated could lure the Indians out of Cleveland. John Loar, managing director at Music City Baseball, has envisioned a major-league team called the Nashville Stars, an ode to the Negro League team. The privately funded stadium would seat 42,000, in honor of Jackie Robinson’s number, in the middle of a “world-class entertainment venue,” with retail, development and musical residencies.
“I’ve never had a conversation with anybody about Cleveland regarding Nashville,” Loar said. Multiple sources concurred: The idea of the Indians moving to Nashville has not been discussed.
Employing the most optimistic timeline, Loar said Nashville wouldn’t be ready to receive a franchise until 2025. Loar’s preference is an expansion team, and MLB commissioner Rob Manfred has already acknowledged Nashville is on baseball’s short list of possibilities. Since the Washington Senators relocated to Arlington to become the Texas Rangers a half-century ago, there has been only one case of an MLB team changing cities: The Montreal Expos, owned by the league at the time, moved to D.C. following the 2004 season. Relocation can require the team owner to pay a hefty fee, determined by the league office, and necessitates a three-fourths vote for approval from other team owners.
“There are circumstances and situations that are worse (than Cleveland),” one source said.
Namely, Oakland, which has, for years, engaged in a game of tug-of-war regarding a new stadium, and Tampa, which has hinted at a Montreal timeshare and a new ballpark. Manfred indicated earlier this year the league wouldn’t consider expansion until those two issues are resolved.
Tampa and Oakland have operated with paltry payrolls yet have remained largely competitive for the last decade. The Indians, owners of the sport’s longest title drought, have adopted a similar front-office approach as they have recalibrated their roster over the last few years.
No Cleveland player has a guaranteed salary beyond this season. José Ramírez, Roberto Pérez and Cesar Hernandez have club options for 2022. Ramírez seems certain to have his exercised. Otherwise, there are no financial commitments on the books.
Dolan told the Akron Roundtable in March the club’s $50 million payroll will rise in the coming years, though probably not to the level it reached a few years ago after the team added free-agent slugger Edwin Encarnacion, who signed a franchise-record $60 million deal. At the start of the 2018 season, Cleveland’s payroll peaked at $135 million, which Dolan said was an initiative intended to spark greater attendance gains than they ultimately achieved. That said, Encarnacion had a clause built into his contract that awarded him a $150,000 bonus if the team reached 2 million tickets sold, which it did.
One source suggested the franchise’s targets are 2 million in attendance and a $110 million payroll. Aside from 2017, the team hasn’t drawn 2 million fans since 2008. Dolan told the Akron Roundtable that, based on attendance patterns, the $80-90 million range “is where our breakeven typically is.” In recent years, the Indians have routinely ranked near the top of the league in local TV ratings. Cleveland is the 19th-largest media market in the country, per Nielsen, and the smallest to field an MLB, NFL and NBA team. Pittsburgh, the 26th-largest market, does have MLB, NFL and NHL representation. The Pirates and Indians own MLB’s two lowest payrolls.
As one source noted, the AL Central helps alleviate some of the challenges. It isn’t a division filled with annually competitive, free-spending goliaths. That has aided the front office’s bid to avoid a full tear-down. Instead, they gradually reshaped the roster over the course of several years. They won 90-plus games each season from 2016-19 — and were on pace to reach that total had the pandemic not truncated the 2020 season — though they haven’t won a playoff game since the 2017 ALDS. The declining payroll has contributed to glaring roster weaknesses going unaddressed and the coaching staff and front office operating with razor-thin margins of error.
“The biggest lever,” a source said, “is still and always will be winning. … In reality, (the front office is) operating as well as any human being could ever operate. The danger, or if you’re looking for a warning, is the fact that they’re operating that way and still haven’t drawn that many people. That’s not a criticism of Cleveland. It’s a reflection of the size of the market.”
And that’s what sparked one source’s fear that the Indians could eventually be squeezed out of Cleveland. Dolan insists his franchise isn’t going anywhere, and the organization’s plan to extend the lease and secure a minority investor would pave the way for the team — with its new name and, eventually, perhaps, a healthier payroll — to remain in Cleveland through 2023 and beyond.
Zack Meisel, Jason Lloyd, and Bill Shea 1h ago 15
After 120 years on the shores of Lake Erie, the future of Cleveland’s baseball team is at a crossroads. The team’s controversial nickname is about to be retired, payroll has been slashed to its lowest figure in a decade and, most notably, the lease on Progressive Field is set to expire in two years while questions linger about the future ownership of the club.
The looming changes sounded enough alarms that even team employees started to wonder where this was all headed. Finally, the question was posed to owner Paul Dolan over the winter during a regularly scheduled video conference with members of the organization.
What is happening? Is the franchise moving to Nashville? Are our jobs safe? Is the team’s tenure in Cleveland on borrowed time?
Dolan’s answer was resounding: We aren’t leaving.
“The franchise isn’t going anywhere,” a high-ranking team official told The Athletic, an assertion several other sources echoed, and one Dolan has stressed internally. The Indians have no plans to abandon Cleveland.
Nevertheless, drastic change is approaching. Indians officials continue to insist the team operates in the red on a near-annual basis and that it will require several years to recover from the financial damage inflicted by the pandemic. After more than a century with the same nickname, the organization is undertaking a branding overhaul, with a new moniker, logo and uniforms in development.
The team, city and stadium landlord Gateway Corp. are nearing an agreement on an extension on the Progressive Field lease, according to multiple sources. The current pact lapses after the 2023 season, the ballpark’s 30th in the heart of downtown Cleveland.
The franchise also seems to be moving toward change at the top, with Dolan conveying interest in identifying a new minority investor. At least one candidate has emerged: Stanley Middleman, the founder and CEO of New Jersey-based Freedom Mortgage, one of the nation’s largest FHA and VA lenders. Middleman, 67, has discussed purchasing a minority share in the Indians, several sources with knowledge of the talks told The Athletic.
Two sources noted there are other interested suitors and it remains unclear how far along conversations with Middleman or anyone else have progressed. Multiple attempts to reach Middleman were unsuccessful. Dolan declined to comment through a team spokesman when The Athletic presented him with a list of questions. One source indicated Dolan has no immediate plans to sell a majority share of the franchise.
For now, the stake previously belonging to businessman John Sherman, who owned nearly 30 percent of the team, remains in escrow. Sherman purchased a minority interest in the Indians in 2016, with the deal including a path to majority ownership over a period of time left to Dolan’s discretion. A similar arrangement could be reached with Middleman or any other prospective investor. Sherman’s hometown Kansas City Royals became available in 2019, driving him to pivot and leaving all parties involved to hunt for his replacement.
With such uncertainty, The Athletic spent six months assessing the state of the organization, examining the real estate around Progressive Field, speaking to officials in Nashville who dismissed the idea of bringing the Indians to the Music City and diving into the background of the Dolan family to better grasp the team’s financial situation. All roads lead to the same question:
What is the future of baseball in Cleveland?
First baseman Bobby Bradley rounds the bases after hitting a game-winning home run for the Indians against the Royals on Friday night. (Ken Blaze / USA Today)
One source with knowledge of the city’s sports and financial landscape said he has long feared Cleveland can’t sustain three major professional teams, and he stressed the Browns certainly aren’t going anywhere. The Cavaliers are shielded by the NBA’s salary cap and booming television contract, which ease concerns about market size and make its franchises financially viable. The Cavs’ lease on Rocket Mortgage FieldHouse extends through 2034.
That leaves the Indians as perhaps the most vulnerable for now, although a lease extension and infusion of cash from a minority partner, two priorities on ownership’s agenda, would alleviate concerns.
“Something fundamentally has to change,” the source said.
The Dolans are the longest-tenured owners in the history of the franchise, which was a charter member of the American League. They bought the team for $323 million in 1999 following a failed bid to buy the Browns. Forbes estimated in March the franchise is now worth $1.16 billion. When The Athletic asked Dolan during a wide-ranging interview in 2019 why the family owns the team despite its contention of consistent financial pitfalls, Dolan identified the increasing value of the organization.
Dolan, who took over as controller of the organization from his father, Larry, in 2013, routinely cites he is a fifth-generation Cleveland native. Those roots provided the impetus for the family to pursue ownership in the first place, and that serves as motivation for preserving the franchise’s presence in the area.
“I can’t see any chance under a Dolan ownership that the team moves,” said an industry source with intimate knowledge of the Indians’ financials. “One of the reasons they bought it was to impact the community positively.”
But can the family of lawyers maintain stewardship in a league filled with billionaire owners who treat their teams as hobbies? The Dolans run the Indians as a business, and they claim their annual balance sheet typically involves losses in the tens of millions. Of course, that didn’t scare off Sherman, who supplied the Indians with a financial injection from 2016-19 before he returned to Kansas City.
Negotiations on extending the ballpark lease began with regular meetings in September 2019 and have continued for nearly two years.
Progressive Field, which opened in 1994, remains a jewel among MLB stadiums, in part because of a series of privately funded renovations over the last decade. The most recent included $40 million in upgrades in 2015, which included the creation of The Corner, the popular hangout in the right-field grandstands.
All of the updates to this point have been to fan-facing areas: scoreboards, upper-deck seating and suites. Much of the service level, the clubhouses and administrative offices have not been renovated.
Other teams, such as the Rangers and Braves, have abandoned their similarly aged ballparks and constructed new venues. That’s not realistic in Cleveland, where parties on all sides realize that passing legislation for another publicly funded baseball stadium here is a non-starter. Rather, at least a few city leaders believe Progressive Field can join the ranks of Wrigley Field, Fenway Park, Dodger Stadium and other iconic ballparks that endure for generations.
What remains to be seen is how the November elections might impact lease negotiations. A new Cleveland mayor will be elected in four months since Frank Jackson is not seeking a fifth term, while 15 of the 17 City Council seats face opposition this fall. Negotiators are concerned how the political uncertainty could delay any deal getting approved by city legislators.
There has been no indication that lease negotiations have fueled ultimatums or threats of relocation, as was the case with the Indians in 1990 and the Browns a few years later. After Art Modell uprooted Cleveland’s football team and planted it in Baltimore, the state of Ohio enacted the “Modell Law” in June 1996, which complicates the process of moving a franchise. A team receiving taxpayer support cannot relocate without permission from its home city or without granting at least six months’ notice to allow anyone an opportunity to purchase the team and prevent it from moving. That mandate helped to keep the Columbus Crew from moving in 2018, as the Haslams, who own the Browns, bought the soccer team.
Indians superfan John Adams sits alone with his drum in the bleachers during a 2019 game against the Tigers. (David Richard / USA Today)
There is at least one city prowling for a baseball franchise, a city some have speculated could lure the Indians out of Cleveland. John Loar, managing director at Music City Baseball, has envisioned a major-league team called the Nashville Stars, an ode to the Negro League team. The privately funded stadium would seat 42,000, in honor of Jackie Robinson’s number, in the middle of a “world-class entertainment venue,” with retail, development and musical residencies.
“I’ve never had a conversation with anybody about Cleveland regarding Nashville,” Loar said. Multiple sources concurred: The idea of the Indians moving to Nashville has not been discussed.
Employing the most optimistic timeline, Loar said Nashville wouldn’t be ready to receive a franchise until 2025. Loar’s preference is an expansion team, and MLB commissioner Rob Manfred has already acknowledged Nashville is on baseball’s short list of possibilities. Since the Washington Senators relocated to Arlington to become the Texas Rangers a half-century ago, there has been only one case of an MLB team changing cities: The Montreal Expos, owned by the league at the time, moved to D.C. following the 2004 season. Relocation can require the team owner to pay a hefty fee, determined by the league office, and necessitates a three-fourths vote for approval from other team owners.
“There are circumstances and situations that are worse (than Cleveland),” one source said.
Namely, Oakland, which has, for years, engaged in a game of tug-of-war regarding a new stadium, and Tampa, which has hinted at a Montreal timeshare and a new ballpark. Manfred indicated earlier this year the league wouldn’t consider expansion until those two issues are resolved.
Tampa and Oakland have operated with paltry payrolls yet have remained largely competitive for the last decade. The Indians, owners of the sport’s longest title drought, have adopted a similar front-office approach as they have recalibrated their roster over the last few years.
No Cleveland player has a guaranteed salary beyond this season. José Ramírez, Roberto Pérez and Cesar Hernandez have club options for 2022. Ramírez seems certain to have his exercised. Otherwise, there are no financial commitments on the books.
Dolan told the Akron Roundtable in March the club’s $50 million payroll will rise in the coming years, though probably not to the level it reached a few years ago after the team added free-agent slugger Edwin Encarnacion, who signed a franchise-record $60 million deal. At the start of the 2018 season, Cleveland’s payroll peaked at $135 million, which Dolan said was an initiative intended to spark greater attendance gains than they ultimately achieved. That said, Encarnacion had a clause built into his contract that awarded him a $150,000 bonus if the team reached 2 million tickets sold, which it did.
One source suggested the franchise’s targets are 2 million in attendance and a $110 million payroll. Aside from 2017, the team hasn’t drawn 2 million fans since 2008. Dolan told the Akron Roundtable that, based on attendance patterns, the $80-90 million range “is where our breakeven typically is.” In recent years, the Indians have routinely ranked near the top of the league in local TV ratings. Cleveland is the 19th-largest media market in the country, per Nielsen, and the smallest to field an MLB, NFL and NBA team. Pittsburgh, the 26th-largest market, does have MLB, NFL and NHL representation. The Pirates and Indians own MLB’s two lowest payrolls.
As one source noted, the AL Central helps alleviate some of the challenges. It isn’t a division filled with annually competitive, free-spending goliaths. That has aided the front office’s bid to avoid a full tear-down. Instead, they gradually reshaped the roster over the course of several years. They won 90-plus games each season from 2016-19 — and were on pace to reach that total had the pandemic not truncated the 2020 season — though they haven’t won a playoff game since the 2017 ALDS. The declining payroll has contributed to glaring roster weaknesses going unaddressed and the coaching staff and front office operating with razor-thin margins of error.
“The biggest lever,” a source said, “is still and always will be winning. … In reality, (the front office is) operating as well as any human being could ever operate. The danger, or if you’re looking for a warning, is the fact that they’re operating that way and still haven’t drawn that many people. That’s not a criticism of Cleveland. It’s a reflection of the size of the market.”
And that’s what sparked one source’s fear that the Indians could eventually be squeezed out of Cleveland. Dolan insists his franchise isn’t going anywhere, and the organization’s plan to extend the lease and secure a minority investor would pave the way for the team — with its new name and, eventually, perhaps, a healthier payroll — to remain in Cleveland through 2023 and beyond.