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What does $57 Million mean in Corporate America?

August 03, 2001 by Steel Hammer

What $57 million means in Corporate America

Apparently $57 million means a lot to the Steelers as they have definitely shelled out more in signing bonuses this off season than at any other time; however, questions remain. Were they swindled? Should they have gotten more? Sure it�s greedy, but as Michael Douglas said in Wall Street, �Greed is good.� At least greed would be good for the Steelers if it means having the cash to re-sign key players and upgrade a few positions with solid veterans. At any rate, it is safe to say that $57 million is a big deal to the Steelers, but that $157 Million would have been a lot bigger. The Steelers, however, weren�t greedy. They were more concerned with finding a Pittsburgh company and a deal that wouldn�t create any financial hardship for that company. How noble.


So what does $57 million mean to corporate America? It�s about the cost of a thirty-second television ad during the Super Bowl. Sure that might have bankrupt some of those dot com companies a few years back, but is it really enough to break a Fortune 500 company? Is it enough to break Heinz? Hardly. Rather the 30 year deal has been explained by Heinz�s C.E.O. as breaking down to an annual cost of $2.85 million dollars, which is less than 1% of Heinz�s annual advertising budget. Yes, their advertising budget, not their operating budget.�� The C.E.O. has even been quoted as saying that the deal is �not a real burden� on their budget.


Less than 1%! That mean another $100 million would still have been under 3%, and $157 million would have been more on par with what stadium naming rights are going for these days. I guess the Steelers accomplished their mission. This deal certainly won�t cause Heinz any financial hardship. It doesn�t even sound like it will cause them to flinch and in exchange, for the next 30 years they get exclusive rights to sell their products in the stadium, their name broadcast to millions of listeners every time the Steelers play at home, and signs with the Heinz name so large that they tick off homeowners near the stadium. Perhaps the Steeler�s mission parameters were too limited, too constricting, and lacking in vision. Maybe they just though the deal had to come in under the salary cap. Whatever the reason, it definitely leaves the impression that the men of steel were just out of their league when negotiating such a huge deal with the sharks of corporate America who close big deals on a regular basis and know that greed is good.

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