Buss, Bank Call Report on Owner’s Debts False

Jerry Buss and Security Pacific Bank denied a report Wednesday by KCBS (Channel 2) that said the Laker owner has missed payments to the bank on loans of more than $100 million, jeopardizing his Los Angeles sports empire.

Buss, who also owns the Kings and the Forum, said that to his knowledge, he is not behind on the repayment of any loans.

“I am solvent and I am not in default on any loan whatsoever,” Buss said.

KCBS reporter Jim Mitchell said that Buss fell behind on his payments on the Security Pacific loans six months ago and that the bank was considering forcing Buss into bankruptcy.

However, a spokeswoman for the bank said that Buss is current with his payments.

“Having just heard the Channel 2 report . . . the loans referred to by Channel 2 or any loans of Mr. Buss are not in default and we have not taken collective action to assume control of any of the collateral,” said Sue Taha of Security Pacific.

Buss said that three years ago he used the Lakers and the Kings as collateral to borrow money from Security Pacific.

Mitchell also said that the bank, while not eager to foreclose on Buss, had contacted Sam Gilbert, a Southern California sports figure and a prominent UCLA booster, about running the Lakers and Kings.

Taha said that report is “not true.”

Gilbert, contacted Wednesday night, also denied any involvement.

“I never talked to Mitchell . . . never talked to any Security Bank officials in regards to this,” Gilbert said.

Buss would not reveal the amount of money he has borrowed from Security Pacific, but said it was “nowhere near $100 million.”

Buss also said that he was not behind in his payments to the bank six months ago, as KCBS reported.

Copies of loan documents were shown in the report. Buss explained they were collateral agreements.

“I know that at least half of the NBA teams are put up for collateral,” Buss said. “That’s standard.”

Buss took out a $28-million loan with State Federal Savings and Loan in Corvallis, Ore., in February, 1984. KCBS said that the collateral for the loan consisted of fixtures and equipment at the Forum, such as seats, the scoreboard and sound equipment.

Buss said that the Oregon loan was a refinanced loan to replace a previous business loan.

“Any loan on an arena lists what’s inside,” he said. “That’s totally standard.”

Buss and Security Pacific officials modified the mortgage, dating to Oct. 15, 1982, to subordinate the debt to the Oregon loan.

The security on the loans was a leasehold interest in the Forum, held by Buss through his California Sports Inc. The Forum is owned by partnerships that include Buss, real estate developer Frank Mariani and others in a number of limited partnerships.

Additional collateral on Security Pacific’s loan to Buss in 1982 was a variety of Buss-owned real estate in Los Angeles, Santa Monica and Beverly Hills.

Security Pacific’s mortgage does not show the amount it loaned to Buss. Bank officials declined in September and October to discuss reports of problems with its loans to Buss.

Last October, a Phoenix television station reported that Buss had undervalued some 1,000 houses he owns in the Phoenix area by some $80 a house over the last three years and that he owes the government $240,000 in back taxes.

At the time, Buss called the story “a cheap shot,” the result of a certain vague tax law. Buss said he is in the process of clearing up the matter.

Buss met with Laker players Wednesday afternoon to inform them of the upcoming KCBS report.

“They’ve all been in the public eye and realize things can be blown out of proportion,” Buss said. “From reading their faces, I think they all empathize with me very deeply.

“I told them I was in a no-win situation,” he said. “I told them I’d come back in six months and say ‘I told you so.’ ”

Laker guard Magic Johnson, in the first year of a 25-year, $25-million contract, said that he would be more concerned if any promises had been broken or payments missed.

“The checks keep rolling in,” Johnson told KCBS.

Laker center Kareem Abdul-Jabbar, who is making $1.5 million this year and will make $2 million next year, told KCBS: “There’s always speculation as to who is doing well and who isn’t in financial matters, and I think that this is just another case of that. There hasn’t been any problems with any of the team members, as far as getting paid. . . . From our vantage point, there is nothing irregular going on.

Buss said he is “hurt” by the KCBS report but would have to “wait and see if any damages surface. I just wish the persons making these accusations would come forth and we could hash it out face to face.”

When asked if Buss would consider legal action, Jerry Fine, Buss’ attorney, said: “We’ll think it over,” adding: “I consider it extraordinary that CBS did not take the time to talk to Jerry about this. At the same time, they came out with so many inaccuracies.”

Asked to explain what inaccuracies, Fine said: “The $100-million loan that doesn’t exist.”

Buss bought the Lakers, the Kings and the Forum for $67.5 million in June, 1979. He was reputed to have built a $500-million fortune buying and selling real estate, mostly on the West Side of Los Angeles.

Buss said initial reports of his financial empire being in trouble surfaced last fall when he was attempting to convert a number of short-term loans and “roll them over” into long-term loans.

Buss said he has been able to convert the loans in that manner.

Also contributing to this story were Times Staff Writers Al Delugach, Larry Stewart and Mal Florence.