Owner Buss Negotiating Forum Sale : Finance: McNall and prospective majority partners would build new arena on site.

Jerry Buss, owner of the Lakers and the Forum, is negotiating with Bruce McNall and the Kings’ prospective majority partners to sell the arena, the property on which it sits and the building’s leases with the Kings and Lakers for about $200 million, sources close to the talks said.

The purchasers--McNall, Jeffrey Sudikoff and Joseph Cohen--would build a new arena if the deal is completed. But first, the trio and their lawyers must close a $60-million transaction that gives Sudikoff and Cohen majority control of the Kings.

Should that happen, there is optimism that the Forum deal can be completed within 30 days, although terms of the agreement might change.

“That’s partial information,” Sudikoff said of the arena deal, “but it’s not the whole picture. . . . There are still several economic models.

“The bottom line is that there’s current and cooperative meetings between ourselves and Dr. Buss. It’s no secret that a major motivating factor is to develop a new building. And the path of least resistance is to involve the purchase of the existing Forum.”

One unknown factor is whether Bank of America would own a small interest in the new arena. Under one scenario confirmed by a McNall lawyer, the bank would receive part ownership in an effort to pay off the bank.

McNall is selling a majority of the Kings largely so he can pay off the bank, which had extended him up to $90 million in loans and credit.

Whatever the final agreement, the one constant is the desired result of these talks--a new state-of-the-art arena, complete with luxury boxes, to be erected on the Forum site in Inglewood within three years.

Under the proposed plan, Buss would receive $100 million up front and another $100 million upon completion of the arena. He would continue to own the Lakers.

Buss paid $67.5 million in 1979 for the Forum, the Lakers and the Kings. McNall bought into the Kings in 1986 and took control from Buss two years later.

“We’re still negotiating, we’re still working, we’re still discussing,” McNall said. “Sudikoff and Cohen are really spearheading this.”

Sudikoff and Cohen hope to finalize the $60-million agreement by the end of March. Once that happens and they own 65% of the team, Sudikoff and Cohen will have the final say in terms of the arena project.

Asked about the possible sale of the Forum, Buss replied, “There are so many rumors that we feel our best position is no comment.”

If current negotiations are completed within a month, groundbreaking, according to the McNall forces, could happen within a year. Construction would take 18 to 24 months, which would, if all goes according to the current timetable, make the arena available for the 1997-98 season.

Buss, however, does not see a new arena arising that quickly.

“I’ve always thought that was five to seven years off,” he said. “It takes time to develop the plans and financing and everything. . . . If Bruce brings somebody by who gives us a good deal on a new arena, I’m highly likely to do that. If he doesn’t, then I’ll probably build a new arena myself in five or six years.”

On one matter, there is no dispute. The Forum, which opened its doors on Dec. 30, 1967, isn’t so fabulous anymore, partially because of its age and partially because of its lack of luxury boxes.

“It’s strange the Forum wasn’t built with luxury boxes,” Buss said. “I didn’t always think luxury boxes were the greatest in the world because they were always sky boxes. But with the advent of the Palace in Detroit bringing the boxes down lower, that has developed a lot of appeal.”

If negotiations between Buss and the Kings’ owners are successfully completed, the most likely plan would be to build the new arena on the same property, perhaps in one corner, leaving the Forum operable while construction proceeds. Upon completion of the new building, the Forum would be demolished and the parking lot would form a semi-circle around the new arena.

Another less likely possibility is to build on a new site and leave the Forum standing for concerts and other events.

The key for Sudikoff, Cohen and McNall is to buy the leases of the Kings and Lakers, thus guaranteeing they will play in the new arena.

There has been friction between Buss and the Kings for some time over the amount paid by the hockey team under the terms of its lease, which runs until July of 2018.

Figuring rent, the cost of changing the playing surface from wood to ice, staffing, parking, concessions, advertising and Senate seat revenue, the Kings pay about $10 million a year.

“One could argue there should be a million-dollar-a-year reduction in the lease,” Buss said, “and I’ve certainly told Bruce I’m willing to sit down at any time he has the time and negotiate that.

“Let me say that the lease arrangement with the Kings was one that was established 27 years ago. And only in the last 12 months has there been a complaint about it. It’s the same lease, you know. I wonder if that isn’t a smoke screen to just put the blame on something else.

“The lease is 12.5% of the gross, which is less than the Lakers pay, as an example. But at the time it was signed, the lease was the standard thing around the league. Because of the success of the Kings and the high ticket prices, that 12.5% has become very valuable.”

According to King sources, Buss has privately agreed to take $2 million a year off the lease.

But even that is not enough, according to Suzan A. Waks, vice chairman of the Kings’ executive board.

“We’ve been negotiating with Jerry since 1988 to try and share in some of the revenue streams created when we brought Wayne Gretzky to Los Angeles,” Waks said.

The sale of the lease would, of course, end that dispute.

In the meantime, the friction between the camps has been lessened by the arrival of Sudikoff and Cohen.

“Jerry’s not a bad guy,” Sudikoff said. “He’s been very helpful to me and Joe to accomplish the goal. He and Bruce might have too much history. We’re fresh faces with him.

“I think everybody’s agendas are pretty much in sync. There’s been a good spirit of cooperation between myself, Joe and Jerry. I’m encouraged we’ll see something come together in line with the end of the Kings transaction.”

At first, McNall attempted to bring in an affiliate of the Sony Corporation as a financial partner in the arena project. Sony, however, also wanted to buy a minority share of both the Kings and the Lakers.

That deal never materialized. Was the problem, from Buss’ standpoint, the requirement of parting with a share of his team?

“Kind of something like that,” he said. “There were other considerations, too, but that certainly was one of them. I don’t want to sell the Lakers, period.”

Buss says he’s sorry he sold the Kings. Six years later, he’s attempting to get an expansion team for San Diego, where he might be involved in another arena project.

There were two reasons Buss said he sold the Kings to McNall:

--Buss thought he could get a pro football team.

--He couldn’t get Wayne Gretzky.

Wrong on both counts. Buss’ attempts to buy a football team have never come to fruition and Gretzky was traded to the Kings soon after McNall took over.

“I had negotiated to get Gretzky a year earlier than he came here,” Buss said. “But the negotiations fell apart and I got turned down. So part of my reason for the sale was my disappointment at not getting him. . . . I miss the hockey. I really do. It’s just a great game. I really gave up the hockey with the thought of getting football. And then, when football went bye-bye on me, I kind of got left without any hockey.”

Yet Buss still harbors a desire to also get a football team, ideally the Rams, although owner Georgia Frontiere recently said she was not interested in selling.

“I have publicly said I would entertain buying the Rams if they ever were for sale,” Buss said. “And I’ve said that for over 10 years. There’s always been rumors they are for sale, but nothing ever happens.

“When she decides to sell them, I’m sure I’ll be aware of it and, at that time, we’ll negotiate.”

Times staff writer Lisa Dillman contributed to this story.