Disney Bid to Buy Angels Falls Apart

The Walt Disney Co.’s proposal to buy controlling interest in the California Angels collapsed Wednesday when the entertainment giant walked away from negotiations with the city over the renovation of Anaheim Stadium and an extended lease for the baseball team.

“This deal is over,” Disney Sports Enterprises President Tony Tavares said. “The negotiations have ended.”

The breakdown came after weeks of round-the-clock negotiations, with an agreement apparently imminent. But both sides confirmed Wednesday in separate news conferences that they had reached an impasse just days before a March 17 deadline that Disney had imposed on the negotiations.

Disney’s surprise announcement, made as the final details of the proposal were being ironed out, stunned disappointed city leaders and forces team owners Gene and Jackie Autry to find a new buyer for the Angels as they ponder whether to keep the franchise in Anaheim past the team’s current lease, which expires in 2001. A deal with Disney would have included a 30-year lease for the team.

“Disney has been a longtime friend and partner of our city, that’s why this is so disappointing,” Mayor Tom Daly said.

Acting baseball Commissioner Bud Selig suggested Wednesday that the Disney deal might not be dead.

“I’ve talked to the Disney people and I’ve talked to Jackie Autry and I think there’s still time to work this out,” he said.

“I felt [Disney and Anaheim] were close to a deal but I also knew there were problems. Some things clearly went backwards in the last 24 hours, but I’m hopeful they can be resolved.”

But Tavares, during a news conference at the Pond of Anaheim, said Disney was not interested in a deadline extension.

“We simply ran out of time in our efforts to close the gap,” Tavares said. “We didn’t want to become involved unless we could have a stadium that everyone could be proud of.”

Still, he did not rule out the possibility of the company being involved in baseball, or even the Angels, sometime in the future.

City Manager James D. Ruth, during a news conference at Anaheim Stadium, said there were several issues that caused the breakdown. The two most crucial were the city’s desire to bring a National Football League team to Anaheim as soon as possible and its proposal to build a sports, entertainment and retail complex around the Big A called Sportstown Anaheim.

The proposed development, which has no known investors, would occupy 159 acres of Anaheim Stadium property--including parts of the parking lot--and eight acres at the southeast corner of State College Boulevard and Katella Avenue. The complex, which would essentially link the Big A to the Pond, would be divided into five districts, one of which would be anchored by a new football stadium and another by a renovated Anaheim Stadium.

Sportstown Anaheim “is our future,” said Ruth, who has steadfastly maintained that private investors can be found for the project. “That’s our economic engine for the future. There was an inability [by Disney] to maintain the flexibility we felt we needed to preserve future development rights.”

Ruth and other city officials stressed their commitment to help the Autrys find another buyer who would keep the team in Anaheim.

“We see baseball being in Anaheim long term,” Ruth said. “There will be other potential buyers out there.”

A source close to former baseball Commissioner Peter Ueberroth, who was negotiating with the Autrys before the deal with Disney was announced, said he is “standing by, ready to go,” with his original group of investors and his previous offer to purchase a minority share of the Angels for about $30 million.

Jackie Autry called Wednesday’s developments “kind of depressing.”

“I think the city, in their focus on Sportstown, have forgotten about the California Angels and trying to satisfy them short term and long term. Without the Angels, the Sportstown they envision won’t exist,” Autry said.

Regarding Ueberroth, she said: “Peter is still available to buy the club as are other people. But it’s premature to talk abut it.

“Peter would be an extraordinary buyer for the city if he can work something out.”

In January, Disney’s bid to purchase 25% and operating interest in the Angels, contingent on an agreement with the city to renovate the stadium, was approved by major league baseball owners. Disney set a 60-day deadline to reach an accord on the renovations to turn Anaheim Stadium back into a more intimate, baseball-only facility.

Tavares said the city was unable to guarantee that there would be adequate parking at the Big A if Sportstown and a new football stadium were built.

“The city was trying to achieve maximum flexibility while we are trying to make sure we protect the interests of our fans,” Tavares said. “There are conflicts in those philosophies.”

Ruth said that with a little more time, Disney’s concerns could have been resolved.

“I think because of the time constraints imposed upon us, it was very difficult to reconcile the differences,” Ruth said.

The city, banking on a renovated stadium as the anchor for the Sportstown project, had tentatively agreed to contribute $30 million toward the estimated $100-million renovation.

Disney was to have assumed day-to-day operations of the stadium and received the bulk of the profits. The team’s name would have been changed to the Anaheim Angels. The deal, however, would have eliminated any possibility of a National Football League team playing in Anaheim in 1996.

Although a majority of the Anaheim City Council was ready to approve major parts of the deal, it was clear by late Tuesday night--when the council rejected Disney’s offer in a closed session--that the deal was off, city and Disney officials said.

Council members said that in the end the Disney proposal presented to them Tuesday night was unacceptable.

“I thought we could do it but Disney was asking for too much,” Councilman Lou Lopez said.

Several council members said they could not commit to a deal unless they were assured of a clear way to make back the city’s $30-million investment. At least $10 million was to have come from stadium advertising revenue. The rest of the money was to have been generated through the development of Sportstown.

Because of damage to the stadium from the Jan. 17, 1994, Northridge earthquake, the city was able to designate the stadium and parking lot a redevelopment project. This enables the city to use any increases in tax revenue to help pay for stadium improvements and developments such as the Sportstown project.

But Disney’s offer would have made it very difficult to move forward with Sportstown and then earn a return on the city’s investment, several sources said.

“Although I wanted to see a deal come together, I couldn’t support one that would not provide repayment of the city’s money,” Councilman Tom Tait said.

Councilman Bob Zemel had been adamantly opposed to making a deal with Disney since early last week, when he said it became apparent that the offer on the table would require the city to sacrifice too much.

“I was, deep down, hoping they would be the operator of both football and Sportstown,” Zemel said. “I thought it would be a great match. But as the deal evolved, I feel a sense of relief that we have our options open to us.”

One of those options is football.

The city has been negotiating with the Seattle Seahawks to use Rams Park for practices beginning this month, with the hope of eventually negotiating to bring the team to Anaheim permanently if the team can resolve its legal issues with the city of Seattle and the state of Washington.

“We want to be able to incorporate Sportstown and football into the mix and accomplish all of our objectives,” Zemel said. “The city remains committed to baseball and this in no way means that baseball is leaving Anaheim or that the city is turning its back on baseball.”

Zemel said that until Seahawks owner Ken Behring is given permission to move his team to Southern California, as Behring has said he wants to do, the city cannot begin negotiations with him.

Still, Zemel said, Behring “could be a great answer to our need. He could do football and he’s also the kind of guy who’s a developer and has friends who could make Sportstown happen.”

Behring said Wednesday he is very interested in becoming involved in the construction of a multipurpose stadium in Anaheim for the Angels and a football team.

“A [multipurpose] stadium in today’s world makes sense,” Behring said. “I don’t think as long as I’m in football I could buy the Angels, but I’d like to find somebody to work with us and go along with a stadium. That would make it twice as easy to get something accomplished. I’m very interested.”

Tavares, who was Disney’s top negotiator, declined to name specific deal-breaking points but he confirmed the company’s reservations about Sportstown.

“It’s tough to endorse something when you don’t know what the end product is going to be,” Tavares said. “We didn’t know how much impact it would have on the fans or the stadium.”

Several sources said Disney was ready to walk away from the negotiations two weeks ago when the city put an offer on the table that would have allowed for the possibility of a football team sharing the Big A on a temporary basis.

Tavares said sharing the stadium with a football team, even on an interim basis, would have made renovations difficult. He said Disney’s opposition to football was more practical, in this instance, than philosophical.

Tavares also said the Sportstown project and a new football stadium would not leave the Big A with adequate parking and would interfere with the Disney “guest experience.”

Resolving the parking issue was considered crucial before an agreement could be signed because the city did not want a repeat of the 12-year legal battle that involved the city, the Angels and the stadium’s former tenant, the Los Angeles Rams.

Last December, the city agreed to pay $13 million to end the dispute over development rights to a portion of the stadium parking lot, which the city granted the Rams as part of a deal to lure them here in 1978.

The proposed project was launched amid much fanfare in January at a news conference not attended by Disney officials. Many had speculated that Disney would eventually jump on board, but sources close to the situation said the company has never expressed much interest in the project and might have been concerned that it would compete with their long-delayed plans to open a second theme park next to Disneyland.

Although the proposal proved a disappointment, Anaheim officials have stood their ground and refused to jeopardize the city’s economic future to advance projects for Disney or any other corporation.

The city refused to build a new stadium for the Los Angeles Rams, who then moved to St. Louis. Anaheim also declined to pay for more of the infrastructure improvements for the $3-billion Disneyland expansion project announced in 1991 and shelved in January. A revised project is scheduled to be unveiled later this year.

Tavares said the baseball situation would not affect the company’s future relationship with the city. He cited the company’s ownership of the Mighty Ducks and Disneyland.

“We remain committed to the city, and our 41-year relationship with Anaheim remains strong,” Tavares said.

“Disney’s current and future activities in Anaheim will not in any way be affected by the outcome of this matter.”

Ruth agreed.

“We stand ready to work with Disney on other projects in the future,” Ruth said. “We do not expect the outcome of these negotiations to have any negative impact on other projects in progress or on those being contemplated in the future.”

Times staff writers Mike Digiovanna, Martin Miller, Ross Newhan and T.J. Simers contributed to this report.

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No Big Deal

The Walt Disney Co.’s dance with Anaheim and California Angels officials regarding the company’s purchase of the team started with a phone call last May. How the negotiations began and came apart:

1995

* May 5: Disney President Michael Eisner calls Jackie Autry to discuss buying percentage of Angels. At the time, the Autrys are negotiating with former baseball Commissioner Peter Ueberroth.

* May 18: Disney announces agreement to purchase 25% of Angels with option to buy rest later.

* Sept. 6: Eisner hints Disney may scrap previous plan for new stadium and instead consider renovating Big A as baseball-only venue.

1996

* Jan. 18: Major league baseball owners approve Disney purchase of 25% share of Angels; Disney sets 60-day deadline to settle issue of stadium renovations with city.

* Jan. 25: Disney, Anaheim officials hold first meeting since setting of 60-day deadline to settle Big A renovation issue.

* March 1: Anaheim presents Disney with renovation cost-sharing offer, but refuses to discuss details.

* March 4: City Council agrees to pay $30 million of stadium’s estimated $100-million renovation cost.

* March 8: Councilman Tom Daly defends agreement giving Disney virtually all stadium revenue and eliminating any chance of bringing football to Anaheim Stadium.

* March 12: City officials and Disney representatives appear discouraged after long sessions to work out terms of agreement.

* March 13: Disney pulls out of negotiations over terms of Angels purchase.

Source: Times reports

Researched by APRIL JACKSON / Los Angeles Times