‘93 Super Bowl Loser Was Pasadena--by $800,000 : Business: Organizing group pledged $1 million from ticket markups. City questions sale of many at face value.

It was three weeks before the Dallas Cowboys kicked off to the Buffalo Bills at Super Bowl XXVII in January, and the Pasadena City Council was troubled. Although the game’s host group had promised the city $1 million for use of the Rose Bowl, little more than a handshake backed it up.

“I see Murphy stepping in here,” said Councilman Isaac Richard, referring to Murphy’s Law, which dictates that things that can go wrong will go wrong. But the Super Bowl steamroller was so close you could feel the heat. Hotels were booked solid. And equipment, motors revving, was already at the Rose Bowl, preparing to turn nearby Brookside Park into a festive tent city.

“Let’s get on with it,” chided Councilman Jess Hughston. The council finalized an agreement giving use of the 101,000-seat stadium to the NFL.

Then Murphy stepped in--and the city did not get its $1 million.

As NFL team owners meet in Chicago today to consider a bid from Pasadena and Los Angeles for the 1998 Super Bowl, the unusual 1993 shortfall offers a case study of the pitfalls of the high-stakes deal-making that accompanies this sporting spectacle.

Every year, localities and businesses ante up millions of dollars in the hopes of attracting a one-shot “economic impact” in the nine-digit range. According to a UCLA study, the Los Angeles region got $183 million in new business last January, mostly from visitors spending money at hotels, restaurants and entertainment venues.

But for the city of Pasadena--which had built an $11.5-million luxury press box at the Rose Bowl to meet NFL requirements and expected a big chunk of money to help pay off a bond issue--the Super Bowl experience has been a frustrating exercise in bill collecting.

The deal to bring Super Bowl XXVII to the Los Angeles area was an attractive one for the NFL, which got the Rose Bowl rent free, as well as novelty and concession profits and parking fees.

The coordinating group was the nonprofit Los Angeles Sports Council, whose 49-member board of directors includes professional team owners, prominent lawyers and entertainment and sports celebrities, such as Earvin (Magic) Johnson and producer David Wolper.

They staged one of the most expensive Super Bowls ever. To cover costs of more than $4 million, they relied on a special deal with the NFL--2,500 game tickets could be purchased at their face value of $175, then sold for as much as $1,750 apiece as part of hospitality packages.

But four days before game time, nearly 700 of these tickets remained unsold, and the Sports Council unloaded them at face value. Commercial ticket agencies were selling equivalent tickets for $600 to $1,100 each.

Now, 10 months after the final gun, Pasadena stands to get only $200,000. And some officials have raised questions about the circumstances surrounding the ticket sales, in part because the revenue shortage is almost exactly the city’s shortfall.

They have demanded to know who was permitted to purchase the coveted tickets at face value.

“They released those tickets at face value when sports fans all over the country were willing to sell their souls in order to come to the game,” Councilman William Paparian said.

Assistant City Manager Edmund Sotelo said he believes many tickets were sold through word of mouth to businesses with connections to the Sports Council and the city of Pasadena. “To tell you the truth, I bought a couple of them myself,” said Sotelo, the city’s liaison to the group.

Sports Council officials said they took the only legal course when ticket sales came to a halt. They said the NFL had prohibited the council from selling tickets for higher than their face value except through the hospitality packages.

They have refused to provide the names of the purchasers to the city or The Times and would not describe how they marketed the tickets. They note that the organization is a private, nonprofit corporation and is not required to open its books to the public.

“If people buy something from us, they don’t expect to see their names in the papers,” said Sports Council President David Simon. “Publishing a list of the names could compromise our ability to market tickets in the future.”

Simon said that a list of the ticket recipients was provided to the NFL under a prior agreement, but that the Sports Council kept no copy of the list. An NFL spokesman said the league may have received a synopsis of ticket sales but has not received a full accounting from the Sports Council.

In the 10 months after the event, Pasadena officials clung to faint hopes that the city would receive the $1 million. Earlier this month, the Sports Council, which came out of the Super Bowl with a $217,000 budget surplus, offered to settle for $200,000.

“We’ve smelled this coming for a long time,” Mayor Rick Cole said. “The Sports Council has been less than forthcoming about what they spent the money on and where they spent it. Here we are in October, asking questions about something that happened in January.”

Sports Council officials said they are proud of their efforts to stage Super Bowl XXVII, which Jim Steeg, NFL executive director for special events, recently called “the best we ever had in L.A. and one of the best ever, period.”

“It was done with totally private money,” Simon said, “and we pulled it off with a surplus.”

He pointed out that the Sports Council expected to have $1 million in surplus funds to give to Pasadena but never guaranteed that amount to the city.

This time, as Pasadena and Los Angeles team up for a new Super Bowl bid, the Sports Council is not involved.

The cities and their convention and visitors bureaus are proposing a pared-down version of the Super Bowl XXVII bid, offering the Rose Bowl rent-free again but keeping concession profits and parking fees for Pasadena. They propose a special 8% surtax on hotel rooms during the weekend. And they are seeking 1,000 tickets to sell with hospitality packages in hopes of defraying more than $2 million in expenses.

Under the circumstances, why would Pasadena do it again?

Because the Super Bowl has the potential to bring the kind of profits that make municipal fiscal officers rejoice. Only once before has a locality gotten shortchanged, said the NFL’s Steeg. That was Super Bowl XXIII in Miami, when rioting in Miami’s Overtown area a week before the game cut ticket sales.

Local team owners eventually covered Dade County’s $400,000 shortfall, Steeg said.

In most cases, the game has proved so lucrative that would-be Super Bowl cities practically tie themselves into pretzels to accommodate the NFL.

When the league declared last year that it would try to bring the Super Bowl to a Northern city every seven to 10 years, boosters in Phoenix claimed that if the Mason-Dixon Line were extended to Arizona their city would lie above it. Think of Phoenix--160 miles from the Mexican border--as a Northern city, they said.

Cities that once demanded big payments to stage the game now court the NFL with rent-free stadiums, profits from sales of novelties and game-day concessions, parking fees and rich bouquets of perquisites and privileges.

This year’s Super Bowl had a budget of about $4 million--higher than the $2.9 million spent by Minneapolis last year and the $2.7 million Atlanta expects to spend next year.

Super Bowl XXVII was the fifth at the Rose Bowl. It was billed as the one that would make Pasadena at last a full partner in the festivities. Earlier Super Bowls were widely perceived as Los Angeles events--with ticket-holders, sated by days of partying in Los Angeles and Orange County, repairing to the Rose Bowl for the game alone.

“There was all this snickering about Pasadena’s little old lady image and about the football game invading this quiet little town,” Mayor Cole said.

Nowadays the NFL wants the stadium to be the focus of pregame hoopla. “The NFL wants to feel this is a big deal,” Simon said.

To attract this year’s event, the Sports Council agreed to transform the area around the Rose Bowl into a colorful fairgrounds--with a 700,000-square-foot football theme park, party tents and media headquarters.

Pasadena officials promised to build the press box, including 45 luxury suites and 1,087 media seats, in time for the game. In fact, the city--spurred by the promise of $1 million from the Sports Council, officials say--had the press box ready in time for the UCLA 1992 football season, five months before Super Bowl XXVII.

Pasadena had another advantage: The Rose Bowl had almost 30,000 more seats than its nearest competitor, meaning more revenue for the NFL.

The Sports Council was able to persuade the NFL to grant it an unprecedented number of tickets to sell, in part because the league wanted to make a special gesture to the area after the riots of 1992.

“We said, ‘Why not sell those seats to us at face value, and we could put them together in a package, with hospitality and gifts, and mark them up?’ ” said Sports Council Chairman John Argue. “We felt it was kind of resourceful.”

In addition to the potential $1 million from ticket sales, Pasadena stood to gain about $65,000 worth of NFL-paid improvements to the city-owned Rose Bowl, $100,000 in NFL donations to local charities, as well as $100,000 in increased sales and hotel taxes.

The ticket packages appealed to the well-to-do football fanatic. For $1,750, the buyer of a Gold package got a pregame celebrity brunch, a “chalk talk” with an NFL coach, an entree to a special hospitality tent, a postgame VIP dinner, souvenirs and a ticket near the center of the field.

Those sold out quickly, Sports Council officials said.

Platinum packages of 10 choice tickets did not sell very well at $100,000 per package. Only Atlantic Richfield Corp. purchased one.

Most of the end zone seats in Bronze packages sold for $995.

But sales of the $1,250 Silver packages--offering a pregame lunch, a souvenir and a ticket between the 20 yard lines and the end zones--were slow. Those were the tickets sold at face value four days before the game.

If they could not sell them for $1,250, city officials asked, why not try lowering the price to $800 or even $400? “There are significant judgment questions raised by their failure to reprice the package,” Paparian said.

City officials said they were not warned that the city’s $1 million in profits was in serious jeopardy. They noted that Simon wrote City Manager Philip Hawkey five days before the game, saying he was “pleased to report” that 1,700 ticket packages had been sold.

Simon said the Sports Council’s optimism about ticket sales stemmed from the hope that the NFL playoffs prior to the Super Bowl would jolt buyers’ interest. “There was a flurry of interest after the two teams (Buffalo and Dallas) were identified,” he said. “But we only sold another 100 or 150 packages in the final two weeks.”

Simon said the city was well aware that the $1 million was not guaranteed, and it did nothing to strengthen its agreement with the Sports Council. In May, 1991, Simon wrote to Hawkey saying that the $1 million was “an estimate and not a guarantee of any kind.”

“If they had tried to negotiate an agreement in late 1991 or even early 1992, I don’t know if we would have been able to reach a different outcome,” Simon said. “But it would have crystallized the issues. We interpreted the silence to mean we were all on the same wavelength.”

City officials said they repeatedly tried to get a guarantee from the Sports Council but were rebuffed. “We were constantly reminding them that we expected $1 million and we saw that as a commitment,” Assistant City Manager Sotelo said. “Their constant response was, ‘We never guaranteed it.’ ”

Some City Council members said they are disturbed that the Sports Council has declined to provide documentation regarding the tickets sold at face value.

The organization submitted a computer printout documenting the sales of all 2,500 tickets to the NFL but did not make a copy of it, Simon said in an interview. “It’s thick and voluminous and it doesn’t lend itself to copying,” he said.

The NFL’s Steeg said the league did not receive the detailed documentation, although the Sports Council may have submitted a brief synopsis of ticket sales. “We’ll eventually want to see it, but it’s nothing we’ve pushed for yet,” he said.

Pasadena City Council member William E. Thomson said his colleagues should not second-guess the handling of tickets. Noting that the Sports Council had strong incentives to bring in as much revenue as possible, he said: “They had no reason to cut deals with anybody. They expected more revenue to use for other activities.”

The sticking point for some city officials is that the Sports Council, although it played an integral role in a major public event, is not required to open its books to public scrutiny. Said one official who spoke on condition of anonymity, “We’re always being Mr. Nice Guy while they’re doing everything behind closed doors.”

The organization provided Pasadena with a copy of an accounting firm’s review of the Super Bowl finances and permitted city accountants to examine some records.

“Our position is that, as a private organization, unless we’re obligated by contract to reveal certain things, we don’t want to set a precedent by allowing a third party to review our books,” Simon said.

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