Sport: Marshmallow Empire

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He wasted no time wooing investors. "It's nothing for me to take somebody's money," Mileti says. "They give me money and I do the work." It is not that simple. Mileti has an infectious enthusiasm about his chosen field. "Sport is a common denominator that transcends even broads," he says. "Here we were, the eighth largest market in the country," Mileti recalls. "Yet we didn't have any major-league hockey or basketball, and the Indians were about to leave town." To a potential investor like Bruce Fine, that pitch made sense. "Maybe professional sports will help dispel some of Cleveland's negative image," says Firie. It is not all fun and altruism, of course. These days even losing teams are glamour properties that can usually be resold for a profit. And while franchises are in the red, owners who have other profitable enterprises get convenient tax losses.

Playing on all such attractions, Mileti in 1970 bought an expansion franchise in the National Basketball Association. To finance the $3.7 million cost, he collected hundreds of thousands of dollars from investors like Fine, Bonda and Miller. He raised the rest by going public, selling shares in the basketball club, the Cleveland Cavaliers, at $5 apiece. Ohio residents plunged in by the thousands.

Local Celebrity. Infatuated with his new business-and with his new status as a local celebrity-Mileti bought the debt-ridden Cleveland Indians. The asking price was about $10 million. When Mileti arrived at an American League owners meeting in 1972 with an offer that included only $1 million in cash, he was nearly thrown out. So he rounded up two new investors who kicked in another $1 million apiece and bought the club. Further rapid money raising bought him the World Hockey Association Cleveland Crusaders.

With the Crusaders, Mileti's empire became one of the biggest sport conglomerates in the U.S. Except for the Crusaders, though, who are showing some life this season, none of Mileti's teams have broken even in competition. Without exception, they do miserably at the box office. Last year alone Mileti's franchises lost $3.5 million.

For a while, Mileti tried to run all his shows singlehanded. "This is an empire built on marshmallows," admits Bonda. "Nick doesn't have his feet on the ground. He has diluted himself." At the behest of increasingly nervous stockholders, Bonda took over administration of the Indians last year. At the same time, Mileti was forced to appoint general managers for his other teams.

Whatever the problems he faces, Mileti has no intention of giving up. Indeed, he is pushing ahead with a project that he thinks will save his entire operation: construction of a new $ 18 million coliseum in a cornfield between Cleveland and Akron. It will be home to his hockey and basketball clubs and, he hopes, a regional entertainment complex. Mileti, however, has no assurance that Ohioans will use precious gasoline for a trip to watch mediocre teams or the circus. Nonetheless, he insists that "I don't even consider the possibility that the coliseum won't work."