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Anaheim in Danger of Losing Game : Pro sports: Rams’ suitors offer deals like the one that lured team here. City says it wants to compete but can’t.

TIMES STAFF WRITERS

Fifteen years ago, the city of Anaheim lured the Los Angeles Rams to Orange County with promises of more money, a better stadium and tens of thousands of adoring fans. With the team coming off a Super Bowl appearance, plus a long tradition of solid support in Southern California, both sides were riding high and full of expectations.

Now, after four consecutive losing seasons and with attendance sagging, the relationship between the Rams and Anaheim is crumbling. And on Tuesday, the National Football League team will take the first formal step toward possibly leaving town.

“As far as I’m concerned, they’re out of here,” said Councilman Irv Pickler, who for some time says he has seen irreconcilable differences. “Let them go.”

Led by a determined team executive, the Rams have fought with city officials over issues big and small, and owner Georgia Frontiere recently told The Times that leaving Anaheim is indeed an option. City officials reply equivocally, saying they love the Rams, but not at any price.

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So Tuesday, the Rams will activate an escape clause in their Anaheim Stadium lease that allows them to leave town in 15 months.

In an ironic twist that has come to typify big-time sports, cities such as Baltimore, St. Louis and Memphis, Tenn., will offer the Rams the same sort of enticements that lured them to Orange County. And Anaheim, where grand dreams miraculously seem to come true, faces the competition with a wavering will and a reluctance to spend.

“We can’t end up in a free-for-all bidding war with entire states and expect to come out a winner for the taxpayers,” City Atty. Jack L. White said. “I think if we keep the Rams, we’re going to have to consummate a marriage with the county and state and bring their economic forces into play.”

Many factors contribute to a professional sports organization’s desire to move. Team and city officials agree that the main motivation for the Rams is money.

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“We feel the stadium is economically obsolete,” said Rams Executive Vice President John Shaw. ". . . In order to compete in this era of free agency, we have to find a way to increase our stadium revenue. The escape clause gives us the opportunity.”

Economics aside, team and city officials acknowledge that the Rams at times have been dissatisfied in Anaheim, and Tuesday’s notice culminates years of discontent.

“I guess it was to be expected,” Councilman Bob D. Simpson said of the threat to move. “The handwriting has been on the wall for some time now.”

The discord between the Rams and city has resulted in lawsuits and several threats by the team to leave. As recently as two weeks ago, the Rams were facing eviction from their practice facility.

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On-the-field performance and fan support have soured as well. The team has won only 19 of 64 games in the past four seasons. Attendance was fourth-lowest in the National Football League last year, and season ticket sales are down 13% from a year ago.

An April 23 rally at Anaheim Stadium, organized to show how much the Rams’ fans loved them, drew 200 to 250 die-hards.

Despite losing seasons and the apparent drop in popularity, most city officials say Anaheim still wants to keep the team. Mayor Tom Daly says he is “optimistic” that something can be done. But the question is whether the city can muster a financial package enticing enough to compete with offers elsewhere and satisfy the Rams.

To the Rams, this week’s action is a strategic move that the times both allow and demand.

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The NFL recently awarded expansion franchises to Charlotte, N.C., and Jacksonville, Fla., and while the selections disappointed a number of other cities that had been willing to pay dearly for pro football, a window of opportunity opened for existing franchises trying to improve their situations.

For a team such as the Rams, which has had a $5-million increase in player payroll, a $2-million loss in radio rights revenue and a 40% drop in attendance over the last three years, the financial boon being offered is hard to resist.

Say goodby to Anaheim?

“I think there’s a way, with some creative thinking, to make Anaheim a viable candidate,” Shaw said. " . . . The city was very creative when it had to move the team from the Los Angeles Coliseum. . . . I feel, given the same type of situation, they could be creative enough to keep the team right now.”

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But to do so, Shaw suggested, Anaheim’s only solution might be to build a state-of-the-art, football-only stadium or substantially renovate the existing one.

The likelihood of that, however, is considered remote for a city that is facing a $9-million budget deficit next year and could be stretched further by financial commitments for a proposed $3-billion expansion of Disneyland.

“We’re going to be diligent in our efforts to keep the Rams, but there are limits,” City Manager James D. Ruth said. “It was never intended for the city to subsidize the Rams.”

The city’s motivation to keep the team will not be so much financial as to maintain civic pride and prestige. Local businesses certainly benefit from the Rams’ presence, but Ruth said the city, which earned about $2.9 million in revenue from the team in 1993, just about breaks even after expenses.

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“From an economic standpoint, I don’t think (the Rams leaving) is a loss,” Ruth said. “If it is, it’s very minimal.”

Most city officials say they want the Rams to stay and are willing to try and sweeten the team’s lease. But they also complain that they are unable to compete with the financial packages being cobbled together in other cities, counties and states.

“It’s a totally different economic climate today than it was when they first came here,” Anaheim Councilman Simpson said. “There’s a different approach in getting, keeping and luring teams. There are communities willing to throw millions of dollars at teams. We just can’t do that.”

The Rams have listened to such offers but say they have declined to enter specific negotiations before Tuesday. They point to the four months that have passed since they first indicated they would invoke the escape clause in their lease, giving Anaheim a chance to woo the team without competition. Even if Anaheim had made an offer, though, the Rams signaled they had every intention of declaring the franchise a free agent.

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The stage for a move was set in 1990 after years of deteriorating relations.

The city granted the Rams the right to build office buildings on 68 acres of the stadium parking lot as part of the original 1979 agreement that brought the team to Anaheim. When the Rams were ready to break ground on the project in 1983, the baseball California Angels sued to halt the development, complaining that it would eliminate parking, inconvenience fans and diminish the value of their own lease.

That lawsuit continues to languish in the courts, blocking any parking lot development.

“John Shaw indicated (six years ago) that the Rams could leave at any time with impunity . . . because of the failure of the city to deliver on the parking lot development,” City Atty. White said.

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Although city officials did not believe the Rams’ threat would stand up in court, they were concerned nonetheless. If the team did win and move, it would leave the city with no way to pay off debts on more than $30 million in stadium improvements that were made to lure the Rams.

Already irritated with one unfulfilled promise, the Rams became further rankled when the city purchased land across from the stadium for the development of the Anaheim Arena, now known as The Pond.

“The city told us they didn’t have any money to address some of the issues that we felt were important at the time,” Shaw said. “But they found a way to purchase a couple acres of land to build a new facility for two tenants, two potential tenants that weren’t even identified at the time in basketball and hockey.”

The Rams attempted to block the arena, prompting the city to reopen negotiations on the stadium lease. The Rams’ escape clause was born.

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“We wanted to put to rest the (parking lot) issue,” White said.

A tentative deal was worked out in 1990: The Rams agreed to no longer insist on their real estate development rights; the city granted the escape clause, allowing the Rams to leave with 15 months’ notice as long as they paid off the remaining stadium expansion debt.

“Our general feeling was that if they wanted to leave they would find some way to leave,” Ruth said. “This way we covered our financial exposure.”

When city officials approved the escape clause, they knew the team might leave but didn’t think it would ever come to that.

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“When they started asking for things like a 15-month escape clause, an antenna should have gone up,” said Simpson, who was involved in the initial negotiations as city manager but resigned that office before they were completed.

Shaw believed that the city was shortsighted and now thinks it’s fooling itself if it expects to land another professional football franchise.

“At the time when we negotiated the escape clause, the city view was that $30 million would be a prohibitive price for a club to move out of the city,” Shaw said. “I think the present view would be that it wouldn’t be prohibitive.”

City officials defend the action.

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“If we knew then what we know today, I still think it was the right thing to do,” White said. “The entire stadium debt will be paid for.”

After listening to city officials, the Rams recognize that Anaheim may do nothing to keep them.

“Several members of the City Council have made it clear they have no interest in having the taxpayers subsidize a football team,” Shaw said. “We’re sensitive to that point of view. . . . I’m not sure with that view they could compete with some of the other cities that are using state and local money to deliver to a potential football tenant a brand-new facility.”

Baltimore, the leading candidate to lure away the Rams, for example, would build a $160-million, 72,000-seat stadium with bonds backed by special lotteries and stadium revenue. It would include 108 sky boxes and 7,500 club seats. All revenues from tickets, sky boxes, club seats, parking and concessions would go to the team, which would pay only $1 rent per game.

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The Rams pay 60 cents per admission, not to exceed $400,000 a year, to rent Anaheim Stadium, and share in half of the parking and concession revenues. The team also gives up 20% of luxury box revenue and 7.5% of ticket revenue.

The team made a profit of about $3.5 million last year, but Shaw said this year the team projects a substantial loss.

City officials say the Rams would be more profitable if they put a winning team on the field. Shaw, while acknowledging the team’s recent poor play, says the burden of winning every year to remain economically sound in a saturated sports market is unfair and that teams in other cities are supported, win or lose.

Shaw will spend the next few months sifting through offers with a goal of making a final decision by mid-February, when the team will be required to notify the league of any intention to play elsewhere in 1995.

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One strategy being contemplated is to sell 40% of the team to an aggressive leader such as Baltimore Oriole CEO Peter Angelos, who would spearhead the Rams’ move and deflect criticism from Frontiere, who is sensitive to negative media attention.

The Rams intend to follow NFL guidelines if they elect to move and will seek approval from three-fourths of the league ownership. In fact, the Rams used a recent lease dispute with Anaheim over their practice facility to demonstrate to other NFL owners that they had serious difficulties operating here.

There has also been talk about a corporation such as the Walt Disney Co. stepping in and buying the Rams to keep them here. Disney has made overtures, but Shaw said league rules that prohibit corporate ownership aren’t likely to be changed before the Rams decide whether to move.

Nothing will happen without Frontiere’s approval and, to date, she has disavowed any interest in selling her team or part of it. She also has expressed an aversion to extended litigation, which contributed to the Rams’ sudden capitulation last month to Anaheim when it was threatened with eviction from its practice site.

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The team reserves the right to revoke its termination notice and remain here, but it will lose the $2 million it must post on Tuesday in order to exercise its escape clause.

If recent negotiations over the Rams’ lease for their practice facility are any indication, the prospect of retaining the team does not look good. It took the city about nine months, an eviction threat and several financial concessions to resolve that dispute. When it was over, the Rams, still dissatisfied with the lease, said they deserved a more modern practice facility.

Councilman Pickler, who opposed the agreement, said he hopes the city doesn’t continue making concessions just to keep the Rams. But subsidies, it appears, are what the Rams are looking for.

Mayor Daly, for one, has been trying to find ways to accommodate the Rams while protecting the city’s bank account. He has met with county and business leaders to solicit support.

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Daly also has proposed joining with private investors to build a massive retail center and possibly a new football stadium as a way of enticing the team to stay. But Daly’s proposals have found little enthusiasm on a council that remains divided on how to keep the Rams.

“Can it be done?” asked White, the city attorney. “I guess we have 15 months to find out.”

Rams Coverage

* MORE LUCRATIVE OFFERS -- Baltimore, St. Louis and Memphis are among the football-hungry cities seeking to lure the Rams to relocate. Though a long shot, even Los Angeles is a contender. A16

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* MAN ON A MISSION -- Peter G. Angelos has cultivated quite a following in Baltimore after buying the baseball Orioles. Landing the Rams or another NFL franchise would cement his status. A16

* LITTLE INCENTIVE -- Grass-root efforts to encourage the Rams to stay in Anaheim have been mostly symbolic and “disappointing,” a Rams booster says.. A17

* MIKE PENNER -- Imagine Anaheim and Los Angeles without the Rams and the Raiders. Imagine Sundays as a day of rest instead of a day of NFL. It could happen. C1

Key Players in the Rams Saga

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Georgia Frontiere

Position: Rams owner and president

Role: Will decide if team moves. Fondest football memories include early Baltimore days, when then-husband Carroll Rosenbloom owned Colts. Doesn’t want legal fight; has no wish to sell. But will she sell minority interest, allow partner to spearhead move, keep her name out of it?

John Shaw

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Position: Rams executive vice president

Role: One thing keeps him from moving: He’s not the owner. Began plotting six years ago, knowing NFL expansion losers would want teams, and got escape clause in lease with Anaheim. Paid to give advice and make Frontiere money; believes staying is a losing proposition.

Tom Daly

Position: Anaheim mayor

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Role: Most active member of the City Council in trying to keep the Rams; has met often with county and business leaders to get their help. Recently floated grand proposal, including retail and entertainment center and possible new stadium, to get team to stay, but received little support from rest of council.

James D. Ruth

Position: Anaheim city manager

Role: City’s lead negotiator on the issue. Responsible for drafting a package designed to keep the Rams here and submitting it to the City Council for approval. Still waiting for some directions from the council on what inducements the city might be willing to offer to entice the team to stay.

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Jack L. White

Position: Anaheim city attorney

Role: Advises City Council on legal obligations and potential liabilities. Helped draft the 1990 Anaheim Stadium lease escape clause, which allows the Rams to leave with 15 months’ notice provided they pay off debt on about $30 million in stadium improvements, to clear way for construction of The Pond.

Peter G. Angelos

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Position: Baltimore Orioles CEO

Role: Led group that purchased Orioles for $173 million last year. The labor lawyer, at the request of Maryland Gov. William Donald Schaefer, now wants to bring NFL football back to Baltimore. Nationally recognized litigator on behalf of clients harmed by asbestos-related disease.

George (Buzz) Westfall

Position: St. Louis County executive

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Role: Neutral party trying to resolve sticky stadium-lease situation that doomed St. Louis’ efforts to lure New England Patriots in January and has paralyzed city’s efforts to lure Rams. Formed FANS Inc. (Football At the New Stadium) to help settle dispute.

William B. (Billy) Dunavant

Position: Dunavant Enterprises, Inc. CEO, Memphis

Role: World’s largest cotton merchant assembled impressive ownership group including Fred Smith, Federal Express chairman, and Paul Tudor Jones, Wall Street money manager, but failed to bring expansion team to Memphis. Now hopes to buy all or part of NFL team and move it.

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Position: McCombs Enterprises CEO, San Antonio

Role: Owner of 40 automobile franchises in South Texas and co-founder of a $600-million broadcast company; wants to make San Antonio a major league sports town. Bringing pro basketball Spurs 22 years ago was first step. Set to intensify efforts to land Rams for Alamodome.

Lowell P. Weicker Jr.

Position: Connecticut governor

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Role: Former U.S. senator wants to lure NFL to Hartford in final year as governor. Nearly snagged New England Patriots with lucrative offer in January before they were sold to the owner of their stadium, who then stayed put. Hartford ownership group has reportedly talked to Rams and Raiders.

Researched by T.J SIMERS, MATT LAIT, MIKE DiGIOVANNA / Los Angeles Times

What’s Your Opinion?

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