Board Gets Static Over TV Rights to Parade : Business: KTLA receives a five-year renewal for the annual Thanksgiving weekend event. Rival stations object because the Chamber of Commerce solicited no other bids.

The Hollywood Chamber of Commerce, which recently settled its differences with the state attorney general over money from the Hollywood sign and the Hollywood Walk of Fame, now faces complaints about how it negotiated a contract to broadcast the Hollywood Christmas Parade.

The agreement for KTLA (Channel 5) to air the parade for the next five years was approved last month by an overwhelming majority of the board of directors even though no other bids were solicited.

Details, including how much money the chamber stands to make from the agreement, were kept secret from all but a handful of members, and a negotiating committee closed the deal after a telephone vote authorized them to finalize the agreement.

Chamber leaders defended the contract and the way it was reached, saying that the organization stands to make a substantially larger amount of money than in previous years and that it would lose out in future negotiations if details were revealed.

“I feel in all honesty that the chamber probably got the best deal they could get regardless of who they were negotiating with,” said board member Michael C. Dubin, a real estate developer who was appointed to the negotiating committee after he criticized the chamber’s long-standing relationship with KTLA. The station has aired the parade since 1978.

But dissident board members were outraged, including a representative of the Walt Disney Co., whose station, KCAL (Channel 9), offered to bid on the contract.

“How can you possibly make a statement like that when nobody else was allowed to make a deal?” asked T. J. Baptie, a board member and director of corporate relations for Disney. “How do they know they got the best deal when nobody else was bidding?”

She said Thursday that her company had hoped to air the Thanksgiving weekend festivities as a profitable special event that also yielded good public relations.

“I think it (would be) be very profitable,” said Randy Reiss, executive vice president of Walt Disney Studios and president of its network television division. “We never got as far as to discuss any of the terms. (KTLA’s) ratings on the show have been very good. It has even been syndicated to other markets. I think it’s a very viable product.”

As for Baptie, she said she is now thinking about quitting the board of the troubled chamber, whose president, Brooke Knapp, was recently fired after allegations of bad management.

The parade, first staged in 1928, will be held for the 61st time this fall, said Johnny Grant, executive producer of the event and vice president for public affairs at KTLA.

The parade generally leads TV ratings for its time period in Los Angeles, he said, and it is also seen on 152 stations across the country. The new agreement calls for increased marketing for possible broadcast overseas.

Although Grant is a longtime member of the chamber board, chairman Chris P. Baumgart said that Grant was cut out of negotiations because of “the obvious conflict of interest.” Grant was the one abstention in the vote, which was 35-2 to endorse the agreement.

“It is part of my fiduciary responsibility not to give you specific numbers, but I can tell you this will have a positive impact on the community in that good money will come out of this and go back to the community,” Baumgart said.

In addition to Baptie, representatives of other local TV stations also complained about the agreement, which came three years after the contract was opened for bids, only to be awarded to KTLA yet again.

“We were given an opportunity last time, and I thought it was more of a charade than anything else,” said Rick Feldman, vice president and station manager of KCOP (Channel 13). “I think there is a special relationship between the parade and KTLA, and any station coming from outside has a disadvantage.”

Former chamber vice chair John Ferris agreed with the complaints, noting that Disney puts on “spectacular parades every night in California, Florida, France and Japan.”

Craig Darian, owner of several entertainment businesses, said he was also upset about the negotiating process. Also a former vice chair, Darian had suggested that KCAL bid for the contract this year. He noted that he has had business contacts with both Disney and KTLA.

“There’s no doubt that KTLA has done a fine job . . . and has always had a good relationship with the chamber,” he said. But he added that it was “fundamentally improper” for a chamber of commerce to “inhibit an open bidding process” or deprive any of its members of business opportunities.

Though they understood those concerns, two experts on the management of nonprofit organizations said that the board’s decision to negotiate with just one bidder did not seem to be illegal or improper.

“If you were looking for a nanny for your children, you wouldn’t necessarily put it up for bid,” said Catharine Wells, a law professor at USC. “You might value an existing relationship enough that you wouldn’t go out for bid to other nannies.”

“You always have the possibility of corruption and favoritism and you have to weigh to what extent that clouds the judgment,” said James M. Ferris, associate professor of public administration at USC. “Sometimes there’s a lot of cost of learning in a new relationship.”

But both Wells and Ferris questioned the decision of board members to authorize the negotiating committee to strike a deal in advance.

“The board has the responsibility to oversee the organization, and it’s very hard to be an effective steward for an organization without having all the information,” Wells said.

“If the board agrees . . . that’s fine,” Ferris said. “But if there are dissidents, that creates a lot of tension and mistrust.”

He said that the release of the contract’s details could well benefit the chamber by making it easier for rival stations to put together a better package.

Otherwise, he said, other stations are likely to become discouraged and lose interest in competing.

The chamber’s Dubin, who helped negotiate the deal, used a poker analogy to disagree. “You don’t show your cards if you’re trying to get a better deal from another player,” he said.

“Let’s assume the KCAL contract was $100 and somebody offered $50, we could just say thanks but it’s substantially lower than what we have now,” Dubin said. “If they came back and offered $200 not knowing where KCAL was, then there’s some substance to it. If they knew it was $100, would they offer $200? Absolutely not.”

Because of personnel changes at the station, no one from KTLA was available to comment about the negotiations.

The chamber, which has an annual budget of about $1 million, relies “significantly” on parade revenues, according to Baumgart, who is in his second year as chairman.

He said that he expects revenues from the Hollywood sign and the Walk of Fame to play a larger part than before under an agreement reached with the attorney general in March.

Under the settlement, which was also approved by the Los Angeles City Council, the chamber effectively keeps control of revenues from the sale of trademark rights to the two landmarks.

State investigators said earlier that several hundred thousand dollars had been taken improperly from a pair of trusts set up to fund the maintenance of the two famous sites and used to help the financially strapped chamber.

The chamber agreed to repay $224,464 over the next 10 years and to allow the city of Los Angeles to appoint its own representatives to the boards that supervise the trusts.