Running the business would not be an easy assignment upon David Modell’s entry into Baltimore.
Virtually everything about the business was in chaos when the team arrived.
They had a small staff of people whom they trusted to make the transition from Cleveland, but no salespeople or office staff. Hell, they didn’t even have an office!
They had no logo. They had no letterhead. They weren’t even allowed to do business right away for nearly three months.
Memorial Stadium, where they were forced to play for two seasons, was in the final stages of decay. The state of Maryland was leaning on them regarding stadium funding for what would become PSI Net Stadium. Cleveland and its citizens were suing their ass off at every turn. The NFL brass and competing owners were steamed that the family moved to Baltimore and were in no hurry to aid the Modells.
David, who by his own admittance was “basically thrown out of college,” had most of the mess fall into his lap. He didn’t truly know what to do or what he was doing, but he took charge and learned along the way. He asked good questions and got good answers.
“Of course there is no advice in the world that will replace experience,” he now says.
8
Modell acquired a competent staff of trustworthy people, mainly with Baltimore roots, and together with his new employees immediately made a sound list of corporate values, goals and a mission statement that the new Baltimore Ravens would abide by.
If you walk up to him today, he’ll hand you a laminated business card with the following statements:
VALUES
WE WILL ACHIEVE OUR MISSION THROUGH:
- 100% COMMITMENT TO TEAM
- ACCEPTANCE OF ROLES AND ACCOUNTABILITY
- THOUGHTFUL AND THOROUGH PREPARATION
- ATTENTION TO DETAIL
- EFFICIENT EXECUTION
- THOUGHTFUL COMMUNICATION
- RESPECTING STAKEHOLDERS CONTRIBUTIONS (TEAMMATES, CUSTOMERS AND COMMUNITY)
- SACRIFICING FOR SUCCESS
- INNOVATION
ORGANIZATIONAL GOALS
- GO TO AND WIN SUPER BOWL
- BE RECOGNIZED AS A MODEL ORGANIZATION
- CREATE AND MAXIMIZE INVESTMENT TO WIN
- WORK VIGOROUSLY TO CREATE, PROTECT AND APPROPRIATELY ALLOCATE RESOURCES
- MAKE CUSTOMERS ECSTATIC
- MAKE A CONTRIBUTION TO OUR COMMUNITY
- REPRESENT COMMUNITY DIVERSITY
- HAVE FUN!!!!!!!!!!!!!!!!
ART’S WAY
“IF YOU ARE GOING TO GO, GO FIRST CLASS”
“COMPASSION IS THE GREATEST GIFT”
MISSION
8THE BALTIMORE RAVENS’ MISSION IS TO WIN FOOTBALL GAMES. WE CAN ONLY ACHIEVE OUR MISSION IF WE ARE A TEAM OF PEOPLE ASPIRING TO BE THE LEADING PROFESSIONAL SPORTS AND ENTERTAINMENT COMPANY. SETTING THE STANDARD IN COMPETITION, CUSTOMER SATISFACTION AND BUSINESS PRACTICES IS OUR IMPERATIVE. HERE, THE EXTRAORDINARY MUST BE COMMONPLACE.
Despite the younger Modell’s clear vision and the elder Modell’s decision to move the team to the greener pastures of Baltimore, the same old demon of the Cleveland Browns haunted the family in Baltimore: money problems.
Modell might have escaped the money pit of Cleveland Stadium and the Cleveland Stadium Corporation, but the further debt he incurred with the move and the eventual buyout of his two partners from Cleveland, Robert Gries and Al Lerner, left him with precious little breathing space despite the maximized, publicly financed facility and rabid fan base he found in Baltimore.
The team was still swimming in debt totaling nearly $300 million.
“It would be accurate to say that financially the move was more challenging than we anticipated,” David Modell told me.
Between paying off half of Cleveland, the general expenses of moving a business and playing the first two seasons of their tenure in Baltimore at antiquated Memorial Stadium – where their revenue stream was actually less than it was in Cleveland – they were barely making enough money as a business to pay off the interest, which was in excess of $20 million per year alone. There was just no way possible that the Modells were not going to be forced to find at least a minority partner. That much was inevitable.
The NFL became gravely concerned during the 1998 season and gave Modell several soft deadlines to find some ancillary funding and equity investors. The league had cure rights on the debt that the team had incurred. The biggest factor on the debt was a technical default that the team had against its borrowed money. The banks became nervous, which in turn made the league nervous. Although the team was never late or missed on any actual payments, when it comes to big business and banking, certain complicated ratios need to be maintained in order for the lender to feel good about its creditors’ ability to continue paying the note. The Ravens fell below that margin and were forced to take almost immediate action to find money within a six-month window, beginning in the spring of 1999, right after the hiring of Brian Billick.
8The type of money necessary to become solvent – somewhere in the range of $300 million – would only bring one type of investor: the kind who wanted control, either now or in the future.
John Moag, who had by then left the Maryland Stadium Authority for a job in the private sector with Legg Mason, a brokerage in Baltimore, found the perfect candidate for the Modells in a local boy who made good: businessman Steve Bisciotti.
Bisciotti, just 39 at the time and a media reluctant billionaire, could often be seen courtside at University of Maryland basketball games and was a renowned entrepreneur in Maryland with the advent and emergence of a staffing company called Aerotek. Bisciotti not only wanted to be a silent partner on the front end, he wanted to quietly learn the business of the NFL while partnering with the Modells and utilizing their years of experience.
Early in the 1999 season, Bisciotti agreed to buy a 49 percent stake in the team for $275 million and an option to purchase the remaining shares in 2004 for $300 million more, allowing the Modells to grandfather their way out of the NFL after more than 40 years. Bisciotti was allowing the Modells a few more chances to win a Super Bowl and to potentially go out of the football business with dignity. More importantly, Bisciotti immediately delayed a 7 percent return on his investment in equity, allowing the team the proper cash flow to pursue free agents like Shannon Sharpe, Trent Dilfer and Sam Adams during the spring of 2000, as well as ink long-term deals with Jonathan Ogden and the team’s 2000 draft picks.
Virtually every individual in the know in the Ravens’ brass would tell you that without the presence of Bisciotti – and more specifically the money he fronted the team by becoming a partner – the Ravens wouldn’t have had a prayer of winning the Super Bowl.
Again, it was David Modell who got the deal done. And this was a deal more about heart and family than it was about money.
