Panel OKs 5-Year Pact With MCA to Manage Coliseum and Arena

A five-year agreement giving MCA Inc.’s Music Entertainment Group and Spectacor Management rights to manage the Los Angeles Coliseum and Sports Arena, while the Coliseum Commission retains broad powers to approve what they do, was ratified by an 8-1 commission vote Wednesday.

Although final contract language must still be written, authority to approve the language was given to a commission subcommittee, and representatives of both the commission and the business partnership said they saw no obstacles to private management beginning July 1. A detailed outline of the contract has already been developed.

The commission voted 5 to 4 for a more comprehensive 10-year agreement with the same partnership that would have given it much more freedom to try to negotiate on its own a continuance of the Los Angeles Raiders tenancy in the Coliseum and would have entailed $10 million in repayable investments in Coliseum and Sports Arena improvements by the partnership. But a two-thirds margin was required, so this proposal failed.

Commission to Invest $10 Million

The agreement as approved Wednesday--after six months of negotiations and considerable internal strife on the commission--calls for $10 million in investments by the Coliseum Commission of its own money, primarily for such Sports Arena improvements as new locker rooms, a practice facility, dining facilities, seating improvements and general repair of a facility which has grown rather dilapidated.

Under the agreement the MCA/Spectacor partnership will receive a basic $300,000 annual management fee, plus 30% of the first $500,000 in revenue over an annual $1.2 million, 35% of the next $500,000, 40% of the next $500,000, 45% of the next $500,000 and 50% of anything realized over that.

A second-stage improvement plan for the Sports Arena--which would be contingent on new, more lucrative leases with USC and the Los Angeles Clippers--calls for eventually adding 1,100 more seats in the arena as well as luxury “sky suites.”

The agreement calls for the private managers to obtain commission approval for all facility improvements, contracts, leases or licenses in excess of one year, all contracts involving unbudgeted expenditures, any changes of foliage or advertising inside or outside of the facilities and any loan the managers may enter into.

The commission also would be allowed to disapprove any bookings occurring more than a year before the actual event, and any agreements for events that last more than a week within a one-month period.

Schabarum Provides Swing Vote

Los Angeles County Supervisor Pete Schabarum, the swing vote on the commission against approving more freedom for the private managers, had insisted on retaining these commission prerogatives, and he prevailed in Wednesday’s voting.

Irving Azoff, chief of MCA Inc.’s Music Entertainment Group, said the terms Schabarum insisted upon keep the business managers on a very tight leash as far as negotiating continued tenancy with the Raiders, should the football team’s deal to construct a new stadium and move to Irwindale collapse.

Azoff told the commission that from the partnership’s standpoint, the agreement approved Wednesday “is a better business deal, involving less risk for us.” But, he said, it reduces the chance of the private managers attracting tenants such as the Raiders.

Los Angeles County Supervisor Mike Antonovich, who chairs the commission, tried to get it to adopt the original form of the private management agreement giving MCA/Spectacor a much freer hand. But negative votes by the state representatives on the commission, Alexander Haagen, Fred Riedman and Matthew Grossman, and Schabarum, representing the county, blocked this.

The commission then voted for the less sweeping management plan, with only one county member, Supervisor Deane Dana, voting no. He said the loss of the investment money from the private managers would mean inadequate renovation of the facilities.

However, Haagen and Schabarum challenged this. They said the fees paid to the private manager would be less under the pact approved Wednesday and that ultimately more revenue would be available to the commission to spend on improvements.