Anaheim Clears Way for Pro Hockey Team : Agreement: Council vote allows Disney squad to begin play in October. But NHL must sign off on the deal.

Walt Disney Co. can launch its professional hockey team this October in Anaheim’s new $103-million arena under an agreement approved Friday that was cheered by National Hockey League officials, civic boosters and fans alike.

The 3-0 approval by the City Council clears the way for play by the Disney team, nicknamed the Mighty Ducks for now, and could make Anaheim--with professional football, baseball and hockey--one of the nation’s few year-round major league sports cities.

The agreement among Disney, the city and Anaheim Arena manager Ogden Entertainment was reached after days of lengthy bargaining sessions. The negotiators were scrambling to meet an NHL deadline set for Monday to notify the league whether the Anaheim team would compete in the 1993-94 season.

“It was like giving birth to a porcupine,” Anaheim City Manager James D. Ruth said of negotiations.

But after the vote Disney Chairman Michael Eisner signaled a note of caution and said there are are still issues that need to be worked out with the league.

“Everything is resolved with the arena and the city,” Eisner said, but Disney still has to “resolve certain conditions of the league to determine whether we play in 1993 or 1994.”

Eisner did not elaborate on what the issues were, but said that Disney and NHL officials were going to work over the weekend to try to put their plans in place by next week.

But if all goes well, as it is expected to, the NHL will give Disney permission to start competing in the league this year. Ruth said getting the lease agreement nailed down was the biggest obstacle in the way of getting hockey this year.

“It was very difficult,” Ruth said. “But everyone is pleased with the way it worked out. It’s a great business deal for everyone involved.”

That seems especially true for Disney, where the presence of the entertainment giant is felt throughout in the city. In addition to hockey and Disneyland--the so-called “crown jewel” of the company, Disney has plans for a $3-billion expansion project that would bring a second theme park, three resort hotels and a retail shopping district to the city.

Anaheim is one of two expansion teams--Miami is the other--that will be added to the NHL next fall, bringing to 26 the number of teams in the league. Five have joined the NHL in the past two years.

Miami, which is owned by Blockbuster Entertainment Chief Wayne Huizenga, has signed a two-year lease with the Miami Arena to begin play next fall. Huizenga and Eisner had a gentlemen’s agreement to begin play in the same season.

League executives have hailed the addition of Disney and Blockbuster as entities that will increase the prominence of the NHL, which has lagged behind professional football, basketball and baseball in popularity.

“Without regard to whether they come in 1993 or ‘94, we are thrilled to have Disney and Blockbuster as owners in the NHL,” NHL Commissioner Gary Bettman said Friday from New York.

“The opportunities for us to work with two of the greatest marketing companies in the world (are) almost beyond description,” Bettman added. “The fact that these two great companies have taken a look at the NHL and said we want to be part of this speaks very well for the league and its future.”

With a 30-year arena lease agreement signed with Ogden, Disney has met the NHL’s three criteria for entry into the league: an arena lease, commitments for the sale of 10,000 season tickets and the ability to pay $50 million in franchise fees to the NHL. Of the $50 million, $25 million will go to Los Angeles Kings owner Bruce McNall for agreeing to share his exclusive NHL territorial rights to Southern California.

Anaheim Arena General Manager Brad Mayne said the list of people interested in hockey season tickets has grown to 9,000 names, with most hoping to acquire four seats. The arena will seat 17,250 for hockey games.

Among the other highlights in the 54-page lease agreement between Disney and Ogden:

* Disney has the option to terminate the lease after June 30, 1999, with two years’ notice, but will have to pay Ogden at least $12.5 million to do so.

* Disney will pay $8,000 a day to use Anaheim Arena to film a sequel to its recently released hockey movie, “The Mighty Ducks,” this summer.

* The team will have sole control over the pricing, sale and marketing of club seats and luxury boxes but will split the revenue, roughly equally, from those items with Ogden.

* Disney may pick a corporate sponsor who, for a price, can attach its name to the arena, much the way the Target Center has in Minneapolis and the America West Arena has in Phoenix.

An NHL spokesman said Disney will have until June to pay the league’s $25-million expansion fee, but Ogden has agreed to pay $12.5 million of McNall’s payment as part of the lease agreement.

The arena’s lease became valid only after the Anaheim City Council, in a special session Friday, passed a letter of consent, which included amendments of an operating agreement with Ogden, allowing Ogden to fulfill its promises to Disney.

As part of the agreement between the city and Ogden, Ogden added the fees for McNall to the total cost of the arena project, allowing the company to recover the money through future revenue. In return, Ogden reduced the city’s potential financial liability in the project, saving the city as much as $4.5 million over the next three years.

“It made the deal more palatable,” City Manager Ruth said. “It was a major concession by Ogden.”

Under the old agreement, the city owed up to $2.5 million annually for eight years if neither a professional hockey or basketball team played in the arena. With one professional franchise, the debt was reduced to $1.5 million.

Because of the financial exposure to the city, many people in the community criticized the project and its supporters. The large sandstone arena was called “a boondoggle” and “white elephant.” The city’s former mayor and an ex-councilman partly attribute their campaign losses last November to their close association with the project.

But after Disney expressed a desire to put the team in the arena, attitudes changed. And with a new arrangement that absolves the city’s liability for the first three years, there are even more converts.

“We definitely proved all the naysayers wrong,” said Councilman Fred Hunter, who lost his mayoral seat. “I knew all along this would be a benefit for the city.”

After Friday’s vote, Hunter predicted that within three years the city will get a basketball team. “Don’t be surprised if Disney has something to do with it,” he said.

Meanwhile, Disney has enough to worry about just putting its hockey team’s front-office staff together before next season. The new club, however, will benefit from an amateur draft that experts are calling the deepest and most talented in years and liberal expansion draft guidelines, which allow current NHL teams to protect only one goalie.

Many teams, such as the New York Rangers with John Vanbiesbrouck and Mike Richter or the Chicago Blackhawks with Ed Belfour and Jimmy Waite, have two quality goaltenders, so Anaheim will be assured of starting the season with a good goalie, the most important position in hockey.

Both the NHL expansion draft and amateur draft will be held in June in Quebec City.

Bettman said neither Disney nor Blockbuster have informed him of their intentions for 1993 and that an official announcement is expected Monday. Once Miami and Anaheim officially announce their plans to join the league in 1993, the league will begin drafting a schedule and look into realignment.

“We’ve got to deal with alignment, the schedule, the expansion draft, the entry draft, so we’ll have some fun together for the next few months,” said Bettman, who took over as NHL commissioner in early February. “It’s all very exciting if they come in for next year. We won’t know for sure until Monday.”

One of the first steps in putting a team together will be finding a name for it. Under the city’s agreement passed Friday, the name of the team or the arena must include Anaheim.

Eisner has repeatedly said he wants to name the team after Disney’s hit movie, “The Mighty Ducks,” which grossed more than $50 million. But that name has not won over a great deal of support. Many people, including several city councilmen, have publicly groaned at the prospect.

Hockey’s New Home

Walt Disney Co. can bring professional ice hockey to the new Anaheim Arena as early as October if some remaining issues with the National Hockey League are worked out. A look at how the deal developed:

Nov. 14, 1989: City of Anaheim purchases a 7.6-acre parcel of land from the Phoenix Club, a German-American social club. City officials negotiate for an adjacent parcel of land owned by Christian Co. Inc.

November, 1990: Ground is broken on the Katella Avenue and Douglass Road site.

Jan. 9, 1991: Anaheim sells $103 million worth of bonds to cover construction costs of a new sports and entertainment arena. Underwritten by Merrill Lynch & Co. of New York, the bonds are sold in a one-day issuance at an interest rate of 8.625% and in $100,000 denominations.

May 21, 1991: In a 4-1 vote, the Anaheim City Council accepts the $60.55 million bid by Phoenix-based HuntCor Inc. as the general contractor to build the 19,200-seat complex that will cost a total of $103 million.

June, 1991: Construction begins. The arena, scheduled to open in late summer, 1993, doesn’t have a principal tenant yet.

Dec. 10, 1992: Walt Disney Co. wins conditional approval to establish a National Hockey League franchise in Anaheim. Unanimously approved by the NHL Board of Governors, the new franchise depends on Disney’s finding an arena and selling enough season tickets to satisfy league officials.

Feb. 25: Ogden Entertainment and Disney reach agreement on an arena lease contract, paving the way for an expansion team to play at the new arena.

Source: Los Angeles Times reports

REACTION: O.C. hockey fans, other franchises cheer addition. A24

BUDGETS: How will new team feed Anaheim’s city coffers? A25

MORE WORK TO DO: Forming the Anaheim hockey team is next on the agenda. C1