Sport: Marshmallow Empire

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The products are mediocre or worse, management is inexperienced, and it comes as no surprise that the balance sheets are a study in red. Hardheaded investors might be expected to take one look at the enterprise and run in the opposite direction. Right? Wrong. The money-losing operation happens to involve big-time sport, and the locale happens to be Cleveland, where an athletic franchise is almost guaranteed to bring out the small boy and large civic booster hidden in many businessmen.

Banker Bruce Fine, Businessman Alva T. Bonda, Lawyer Richard Miller and Mogul Corp. President C. Carlisle Tippit seem to abandon all fiscal caution when it comes to Cleveland's basketball, baseball and hockey clubs. In the past five years each man has invested from $200,000 to $1 million in one or more of the teams. And they are not alone. "Anybody who invests in sports for profit is out of his head," says Bonda. He should know, having once lost $400,000 in a now defunct soccer team. "The only reason to do it," he says, "is for the fun, for the connection with a sport and the people in it. Maybe it's bringing Walter Mitty up close."

"It's the superfan idea," says Fine. "Seats in the press box, chatting with the general manager or the farm-system director." Miller was a college fullback (Notre Dame) until he was sidelined by an injury; his father, Ray T. Miller, was one of the organizers of the Cleveland Browns. "I've always wanted to be an owner like my father," he says. Tippit was a boyhood baseball freak who wanted to keep Cleveland a major-league city. With the authority of a $250,000 in vestment, he helps run the town's base ball team, the Indians.

Borrow and Buy. Such sports-struck businessmen, and other Clevelanders like them, did not get together by accident. They were mobilized by Nick James Mileti, 42, son of Sicilian immigrants, who has traded his attorney's narrow lapels for the velour suits and mink coat of a promoter. He makes a business of turning rich fans -and ordinary folk as well -into investors. Since he made sport a career six years ago, the former suburban prosecutor, Jaycee BOUTELLE president and housing consultant has created an athletic empire worth $40 million.

In the process of taking over three major-league profes sional teams, an arena and a radio station to broadcast games, Nick Mileti has put up only $1.2 million himself, and most of that has been borrowed from banks.

Mileti's use of investor syndicates to buy teams sets him apart from most owners in big-time sport. Even at a time of explosive growth in professional athletics, most front offices have remained a stamping ground for rich in dividuals or families. Mileti is a wheeler-dealer who must borrow before he can buy.

He stumbled on his new career one night in 1967 when he filled the Cleveland Arena for a benefit basketball game between his alma mater Bowling Green and Niagara University. "I figured if I could get 1 1,000 fans one night, night." I Soon could get Mileti 8,000 made every a $1.9 million deal to buy the arena and the minor-league hockey team that played there.