The City of Anaheim and its visitors and convention bureau pledged Tuesday to bail out the debt-plagued Freedom Bowl with up to $250,000 in an interest-free loan after bowl officials warned that without the loan--in hand before the end of the week--the postseason football game would be canceled.
Six days before facing a June 30 deadline to pay the universities of Washington and Colorado a combined $527,000 for their participation in last year's game, Freedom Bowl President Kevin Forth went before the Anaheim City Council and said, "We are not asking for a handout. We are not asking for a freebie. We are asking for a loan--pure and simple. . . . Without the loan we are requesting today, the Freedom Bowl cannot proceed."
After almost two hours of discussion--including whether the loan to a private corporation was appropriate use of taxpayers' money--the council unanimously agreed to the loan, due to be paid in full by 1994, with the first of three payments due in 1992.
Two of the five-member council sit either on the 1986 Freedom Bowl Board of Directors or the list of Advisers.
"Every bowl, at one time, has gone to its respective city for assistance," said Tom Starr, executive director of the Freedom Bowl. "This is not without precedent. We finally had to ask for help as well.
"But our case is different in at least one aspect. In the past, there was no such thing as a minimum team payment for bowl games. But we were locked into one from the start and were never able to build up a reserve for funds. It's been a tougher struggle for us."
According to NCAA guidelines, the Freedom Bowl had to pay Colorado and Washington $500,000 apiece, the minimum for bowl awards in 1985. Original deadline for payments was April 1, but when the Freedom and Cherry bowls were unable to meet it, they petitioned for, and received, an extension until June 30.
Starr said the Freedom Bowl made initial payments to Colorado and Washington on March 30 of approximately $250,000 apiece. "We paid about half of it," Starr said.
The remainder of the balance must be paid by Monday or, as Starr put it, "the door would be closed."
Mike Lude, Washington athletic director, confirmed his school received a partial payment from the Freedom Bowl. "I don't know the exact figure, but if (Starr) said it was half, he ought to know," Lude said. "I talked to Tom (Monday) and he said he would be going before the city council. He assured me that the balance of the bill would be sent by the deadline."
Colorado Athletic Director Bill Marolt was unavailable for comment but David Plati, the school's sports information director, said, "I don't believe we've seen anything other than what they gave us at the time of the game (i.e. money from advance ticket sales)." However, Plati said any revenue Colorado would receive from the Freedom Bowl would first be collected and distributed by the Big Eight Conference.
"In the Big Eight, all bowl and TV revenues go the conference and they divide it among the eight schools," Plati said. "The payment should work out to about $100,000 per school, plus our travel expenses to the bowl game (an additional $300,000). One of the things holding up the check is the Freedom Bowl."
The Freedom Bowl's financial woes began with its first game in 1984 between the universities of Texas and Iowa. A cold downpour kept rain-wary fans away from the stadium and two contracts--a television agreement and another regarding game programs--were not honored, leaving Freedom Bowl Inc. more than $450,000 in the red, according to Forth.
MetroSports/TCS, the independent network contracted to televise Freedom Bowl I, declared bankruptcy in early 1985, thus leaving the Freedom Bowl out $340,000.
"Our No. 1 problem was that we didn't get any of our TV money the first year," Starr said. "We are using the money from our 1985 proceeds to pay our 1984 debts . . . We've always kind of robbed Peter to pay Paul."
Starr said more than $100,000 has been raised for the 1986 game and commitments for 19,000 tickets to Freedom Bowl III already have been received. "If we could start right now, we'd be in great shape," Starr said. "But we're still haunted by that first year."
Tuesday's City Council vote went against City Manager William O. Talley's recommendation that Anaheim grant a loan only if an interest rate is attached. Talley noted that the relatively young Freedom Bowl got a break in its original agreement with the city regarding ticket and television revenues.
But City Council members, saying the Freedom Bowl is a big boost to tourist-oriented Anaheim, approved the loan in concept. Now, City Atty. Jack White has three days to write an agreement and council members will have to hold a special meeting Friday to give final approval to the written document.
Meanwhile, Anaheim Visitors and Convention Bureau President Bill Snyder, who urged the council to approve the loan, spent the afternoon calling his members to request authorization for the bureau to foot half of the city loan. By 5 p.m., they got permission and were ready to write out the check Friday, Talley said.
Two members of the City Council, Mayor Don Roth and Mayor Pro Tem Irv Pickler, are Freedom Bowl officials. Roth, as mayor, is automatically listed as a Freedom Bowl adviser and Pickler serves on the bowl's board of directors. The city attorney said both Roth and Pickler could vote on the issue and did not have to declare a conflict-of-interest despite their involvement because of the corporation's non-profit status.
Talley also is listed as an ex-officio member because of his membership with the Patriot Club, a booster organization.
Should the agreement with the city hit a snag before final approval Friday, the ramifications could be felt not only among football fans and Anaheim's tourism industry, but it would also impact 27 guarantors--mostly corporations--who co-signed a $519,000 loan for the Bowl following its first game in 1984, said Mel Miller, Pacific Inland Bank board chairman and also a Bowl Board of Directors member.
Without a 1986 game, Freedom Bowl Inc. would default on its loan with Pacific Inland, making its guarantors pay the debt, Forth said.
Asked why bowl officials waited until Tuesday to ask the city for money, Forth said he and his colleagues were clinging to hopes of attracting a major national sponsor before the payment deadline. Forth and Starr both said they still hope to attract such a sponsor.