Tiny Irwindale May Score Big With Raiders, Experts Believe

Although the agreement between Irwindale and the Los Angeles Raiders contains some unconventional features, it has definite pluses for the little industrial town, according to stadium managers and consultants around the country.

In recent days, angry and incredulous Los Angeles politicians and members of the Coliseum Commission have described the agreement to build a 65,000-seat stadium in Irwindale as a virtual gift from an unsophisticated small town to the Raiders’ shrewd and wily owner, Al Davis.

Irwindale may have problems fulfilling its end of the bargain--in particular obtaining rights to use 80 acres of federally owned, county-leased land for stadium parking.

The agreement, however, seems to conform to other contracts negotiated between professional football teams and city and state entities, according to stadium managers and consultants in Oakland, New York and New Orleans.

These experts said the most remarkable feature of the Irwindale-Raiders agreement is the city’s decision to forward $10 million of the $115-million loan as a non-refundable cash advance. If the deal suddenly collapses over parking or other problems, that money would be kept by Davis.

If the deal goes through, these experts say, the agreement assures Irwindale a fair share of the stadium revenues and probably enough to service $9 million a year in bond debt.

“It doesn’t sound like Irwindale got taken,” said a New York stadium consultant, who asked not to be named because he is involved in sensitive contract negotiations. “It sounds very reasonable once you get past the $10-million front money. If the deal’s put together, the residents of Irwindale will have reason to be happy.”

Most contracts between professional sports franchises and city or state entities call for sharing revenue from ticket sales. New Orleans, for example, is assured 5% of the Saints’ gross ticket sales at the Louisiana Superdome, a comparatively low figure. The Meadowlands in East Rutherford, N.J., gives the state sports authority 15%, or roughly $2 million a year, in ticket revenue from New York Giants Games.

The agreement between Irwindale and the Raiders excludes the city from sharing revenue from ticket sales. Instead, Irwindale and the Raiders will split 50-50 revenue from luxury suites and stadium club seating, two items that typically are retained solely by the team.

City representatives estimate that Irwindale’s share from luxury suites and club seating could amount to $3 million a year, a figure stadium managers said they think is somewhat optimistic.

‘That Can Add Up’

According to Irwindale spokesman Xavier Hermosillo, the Raiders will absorb the cost of constructing the 80 suites, which will be leased to corporations and individuals for $50,000 a year. That would give the Raiders and the city $2 million each. Club seating--prime seats leased yearlong with special access to concessions and restrooms--would net $1 million a year for the city, Hermosillo said.

“Seldom will you find a football team (willing) to share (revenue from) its luxury suites and club seating,” said Bob Johnson, general manager of the Louisiana Superdome. “That can add up to a lot of money.”

One stadium consultant, who asked not to be identified because he is in the process of renegotiating a contract, said most cities, if given the choice, would take revenue from luxury suites over revenue from ticket sales.

“In a big city like Los Angeles with an abundance of corporations and rich people, your luxury suites are always going to be filled,” he said. “But ticket sales are less stable. They can go up and down according to how the team is doing.”

Bill Cunningham, the former general manager of the Oakland Coliseum, said luxury suites are not a guarantee either.

“Some cities, after the team has done poorly, have had a hard time selling their luxury suites,” he said. “It’s no sure thing.”

Irwindale has agreed to loan the Raiders $115 million to carve a 65,000-seat stadium out of an abandoned rock and gravel quarry along the Foothill Freeway and Irwindale Avenue. The Raiders will own the facility and have promised to stay there at least 15 years. The city, buoyed by $35 million it has banked from industrial redevelopment, will finance the venture chiefly through an $80-million revenue bond.

It will cost the city $9 million a year to pay off the stadium bond debt. Hermosillo said Irwindale anticipates its share of stadium revenue to total about $10 million a year. He provided the following revenue projections based on 11 Raider home games and several outside events, such as concerts:

- $3 million a year from leases of luxury suites and club seating.

- $3 million a year from scoreboard, message board and other stadium advertising. Stadium managers said the figure appears to be high but not unreachable if the city and the Raiders are aggressive in ad sales.

- $2 million a year from stadium rental. City officials say at least one college football team, rumored to be USC, has expressed a strong interest in following Davis to Irwindale.

- $1 million a year from the sale of food and beverages, merchandise and novelties.

- $750,000 a year from parking and a $1 admission tax on tickets.

Stadium managers and consultants, although agreeing for the most part, criticized Irwindale’s decision to give the Raiders $2.5 million a year in operating expenses out of the city’s revenue stream, a figure several said they think is excessive. They also questioned Irwindale’s failure to get a 30-year commitment from the Raiders to match the bond’s 30-year term.

“You always like to have the bond and the lease running the same years,” Oakland’s Cunningham said. “That was one of our problems when Al Davis decided to leave.”

Officials at the Louisiana Superdome, however, which realized only $450,000 last year from its association with the New Orleans Saints, said the Irwindale deal looks pretty good to them.

“We would dance all the way to the bank with a deal like that,” Johnson said. “They’re getting half of most everything, and we get half of basically nothing. That deal is a very good one by today’s standards.”