A Big Hitch in Disney’s Angels Buy

The Walt Disney Co.’s deal to purchase 25% and controlling interest in the Angels could collapse if Disney and the city of Anaheim can’t agree on a plan to renovate Anaheim Stadium.

Though baseball owners are expected to approve Disney as the Angels’ new managing general partner today, Jackie Autry, Angel executive vice president, said Wednesday that if a stadium plan isn’t developed within 60 days, Disney can back out of the deal.

If that happened, Autry said, “we’d go and find another buyer.” Former Baseball Commissioner Peter Ueberroth, who was negotiating to buy the Angels last winter until Gene and Jackie Autry decided in May to sell to Disney, would probably reemerge as the leading candidate to buy the team.

However, an American League source indicated Wednesday that if Disney and the city were making progress toward a stadium agreement by mid-March, an extension would likely be granted.

Disney Sports Enterprises President Tony Tavares, who will run the Mighty Ducks hockey team and the Angels pending ownership approval of the Disney purchase, could not be reached for comment Wednesday night.

Anaheim City Manager James D. Ruth said the city will “have to find a way to fund [stadium renovation]. We’ll do everything we can to make it happen . . . but I wouldn’t say I’m overly optimistic.”

It is unclear how the contingency clause affects Disney’s reported plans to impose sweeping changes in the Angel front office after the owners’ vote.

“This is the last hurdle” to a deal, Jackie Autry said at the annual baseball owners’ meetings. “All the other deal points [with Disney] have been finalized.

“I know Disney wants to work out something with the city because it’s in the city’s best interests to keep the team there. But if they don’t, the current [stadium] lease expires in 2001, and I suspect the Angels will be looking at other locations.”

A renovation of Anaheim Stadium, which would include demolition of the outfield seats to transform it from a 67,000-seat football stadium to a more cozy, 43,000-seat baseball stadium, could cost as much as $100 million.

And that’s a price tag the city of Anaheim, still stinging from the loss of the Rams and Orange County’s bankruptcy, cannot afford.

“I think we can come up with something that is compatible to both sides, but obviously coming up with those resources is the tough thing,” Ruth said.

Serious stadium negotiations won’t begin until Disney receives ownership approval today, but Ruth made it clear that the city, which did not cave in to the Rams’ demands for a new football-only stadium, could not pick up the entire tab.

The renovation project will likely be a joint venture, in which Disney and the city pay for stadium improvements and the city rewrites an antiquated stadium lease Autry calls “the worst in baseball outside of Pittsburgh.” That way, Disney would have the potential to recoup a large portion of its remodeling costs in stadium revenue.

“You’re looking at a substantial investment,” Ruth said. “We’ll do what we can to put this together, but we’re not going to put our general fund at risk. . . . We’re not going to subsidize them.”

Ruth said the city would consider renegotiating the stadium lease only if the Angels were willing to commit to Anaheim for another 30 years. He obviously did not appreciate Autry’s threat that the Angels would consider leaving Anaheim if Disney can’t strike a stadium deal.

“There’s always a chance they could leave, but we don’t respond well to having guns pointed at our head,” Ruth said. “We’ve always been fair negotiators, and we’ve always been supportive of the baseball franchise. We want to move toward a resolution of this situation.

“But I also want to make it clear that this is our stadium, and we will have the final say in what improvements will be made. Disney can make suggestions and we’ll try to be responsive to their needs. . . . This will be difficult, but it’s doable.”

Autry said an outdated stadium lease--it was written in 1964--is one of the main reasons behind what she contends are losses of between $25 million and $30 million in the last five years for the Angels, “and that problem is only going to transfer from Gene Autry to the Walt Disney Co.”

Under its current lease, the Angels and the city split parking revenue 50-50, and the Angels receive 60% of concession revenue. The city charges the Angels rent that amounts to 7.5% of gate revenue for the first 2 million fans and 10% of gate revenue above that mark. The Angels claim to make little money from their luxury suites.

“Something has to be done for the club to remain competitive, no matter who owns the team,” Autry added. “You can’t continue to underwrite those kinds of financial losses. It has become a problem trying to compete with teams that are making four times as much in stadium revenue.”

Whatever problems Disney and Anaheim have in negotiating a stadium agreement, they apparently won’t affect baseball’s stance on the sale. Baseball’s ownership committee met Wednesday and agreed to recommend approval of the Disney sale to fellow owners, who will vote on it today. Angel President Richard Brown said the deal will be approved.

Disney would purchase 25% of the team, with the option to buy the remaining 75% after the death of Gene Autry.

Disney has overcome numerous obstacles during an eight-month negotiation to buy 25% of the team for $30 million. Owners were concerned about Disney’s purchase of Capital Cities/ABC Inc. because of a potential conflict with baseball’s new television relationship with NBC and Fox.

But Disney has agreed to recuse itself from baseball’s future television negotiations, and Tuesday’s decision to sell KCAL-Channel 9 served to further ease owners’ concerns.

“We have guidelines on media-oriented companies getting involved in baseball,” said Atlanta Braves Chairman Bill Bartholomay, who is also chairman of the ownership committee. “This [KCAL sale] puts them a little more at arm’s length [from a potential conflict with those guidelines].”

Disney also had to address issues relating to its ties to cruise ships on which there is gambling, and had to agree to baseball’s policy to share all licensing revenue, unlike its unique arrangement with the National Hockey League, which allows Disney to keep profits from merchandise sold at Disneyland, Disney World and Disney stores.

“Certain areas of the transaction still have to be finalized, but the quality of ownership is fine,” Bartholomay said. “This is one of the great global companies. Their aura of success can only help baseball.”