Akron-based FirstEnergy Corp.’s stadium naming rights deal with the Browns is worth $6 million a year, sources told the Beacon Journal on Thursday.
The sources spoke on condition of anonymity, because FirstEnergy and the Browns agreed the terms of the deal would remain private.
Chuck Jones, president of FirstEnergy Utilities, acknowledged in an interview Wednesday with the Beacon Journal that the contract is for 17 years — the remainder of the 30-year lease the Browns have with the city of Cleveland, which owns the stadium.
That makes the contract, which changes the name of Cleveland Browns Stadium to FirstEnergy Stadium: Home of the Cleveland Browns, a $102 million deal.
Cleveland City Council must approve the name change, but the city will not get any money from the deal. In the lease with the Browns, the football team may sell naming rights and keep the money.
Browns officials have said the NFL does not need to approve the deal or name.
FirstEnergy is one of the nation’s largest investor-owned electric systems. It serves more than 6 million customers through its operating companies in a five-state footprint: Ohio, Pennsylvania and parts of New Jersey, West Virginia and western Maryland.
It is also the parent company of FirstEnergy Utilities, which operates the regulated electricity distribution units of Ohio Edison, Cleveland Illuminating Co. and Toledo Edison, and of FirstEnergy Solutions, which offers electricity contracts.
In reacting to news this week about FirstEnergy’s deal with the Browns, some employees expressed unhappiness about their employer’s spending.
Herman Marshman Jr., president of one of FirstEnergy’s unions representing about 300 workers in Pennsylvania — the International Brotherhood of Electrical Workers Local 272 — said his co-workers are highly upset.
“As of 2014, they’re eliminating retirees’ subsidies for health care, but at the same time, they’ve got money to give to the Cleveland Browns Stadium,” said Marshman, who added that workers last fall were given an early retirement offer that he did not feel was fair.
In responding, FirstEnergy spokesman Todd Schneider said the company “has made changes in its benefits for represented employees in accordance with the terms of those contracts. Those benefits remain competitive.”
He said, “There may be some employees that are concerned, but I think the majority of employees are excited about it.”
Schneider said the deal has generated excitement within the company.
“Ultimately the Cleveland Browns deal will benefit the company. The company will do better, and that means the employees will do better,” he said.
Schneider also reiterated that FirstEnergy customers, or ratepayers, will not be paying for the stadium costs.
“It’s a corporate expense. Our sponsorship will not be reflected in rates. Period,” he said.
In the utility’s last financial statement for the full year for 2011, dating back to last February, FirstEnergy Corp. reported net income of $869 million and revenue of $16.3 billion.
Meanwhile, the utility’s stock fell to a 52-week low Wednesday to close at $39.37, down from a $50.87 on July 30, 2012. The stock closed Thursday up 4 cents.
The Browns become the 23rd NFL stadium with a named sponsor among 31 facilities. (The New York Jets and Giants play at the same New Jersey site, MetLife Stadium.)
FirstEnergy’s deal includes exclusive rights for the company to be the only electric energy provider to place signage in and around the stadium. Other terms include: an illuminated exterior sign and internal signs, among them a FirstEnergy Stadium sign at the 50-yard line on each side of the stadium; a certain percentage of time on LED screens; tickets for employees to use; providing a certain number of Browns players and coaches to attend FirstEnergy promotional events; and a rooftop sign visible from aerial views.
FirstEnergy already owns a suite at the stadium.
The deal also precludes the Browns from separately selling the naming rights to the football field itself.
The Browns’ stadium situation could be compared with rival teams in Pittsburgh and Baltimore.
The Steelers are in the midst of a 20-year deal with Pittsburgh-based Heinz foods, signed in 2001 for $57 million. In 2003, the Ravens entered a 15-year deal with M&T Bank at $75 million. The Cincinnati Bengals are one of eight NFL franchises that play in a stadium without corporate naming rights.
Nate Ulrich can be reached at email@example.com. Read the Browns blog at http://www.ohio.com/browns. Follow him on Twitter at www.twitter.com/NateUlrichABJ. Betty Lin-Fisher can be reached at 330-996-3724 or firstname.lastname@example.org. Follow her on Twitter at www.twitter.com/blinfisher.