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Thursday, January 17, 2013

FirstEnergy Deal Worth $102 Million over 17 Years

Posted By on Thu, Jan 17, 2013 at 1:57 PM

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FirstEnergy Corp.’s stadium naming rights deal with the Cleveland Browns is worth $102 million over 17 years, sources leaked this afternoon.

Chuck Jones, president of FirstEnergy Utilities, had already acknowledged that the naming contract would be for 17 years and would last for the remainder of the lease the Browns have with the city of Cleveland, which owns the stadium. The specific financial details were not revealed in previous interviews.

The $6 million per year that the Browns will receive over the next 17 years puts them in the middle of the pack, as far as naming rights deals go. Others of note, according to Bloomberg Businessweek:

Detroit's Ford Field, 20 years: $40 million ($2 million/year)
Edward Jones Stadium in St. Louis: 12 years, $31.8 million ($2.65 million/year)
Heinz Field in Pittsburgh: $57 million over 20 years ($2.85 million/year)
Baltimore's M&T Stadium: 15 years, $75 million ($4 million/year)
Indianapolis' Lucas Oil Stadium: 20 years, $122 million ($6.1 milllion/year)
Lincoln Financial Stadium in Philadelphia: 21 years, $139 million ($6.6 million/year)

One hundred percent of revenue from the deal will go to the Cleveland Browns, i.e. the city of Cleveland won't get a dime. That annoying stipulation was drawn up in the lease agreement, which favors the franchise in a pretty total way. The lessee is entitled to all revenue from stadium operations excluding city events.

At a meeting of city council's finance committee on Monday, Frank Jackson's finance director Sharon Demas cooly answered questions related to the $135 million that Cleveland still owes on the stadium. For anyone who cares, the remaining debt will be refinanced by Wells-Fargo, according to Demas.

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