Disney, Anaheim Make Stadium Pact Official

The California Angels will stay in Anaheim for at least 23 more years and play in a refurbished Anaheim Stadium under an agreement reached between Walt Disney Co. and the city on Wednesday. The accord paves the way for the company to buy the ballclub, which next year will be renamed the Anaheim Angels.

Ending weeks of painstaking, on-and-off negotiations, the city and entertainment giant announced Wednesday that they had reached agreement on all major issues concerning the stadium and an extended lease for the Angels. The deal will be finalized in mid-May, officials said.

“Everyone is a winner today,” said American League President Gene Budig, who joined city, Disney and Angels officials at a news conference at Anaheim City Hall. “This agreement will be good for the city, Disney and major league baseball.”

Gene Autry, who founded the team 36 years ago, did not attend the news conference. He and his wife, Jackie, have long sought a buyer to take over day-to-day operation of the team and ultimately the whole franchise.

Anaheim Mayor Tom Daly was ecstatic over the deal and relieved after the City Council voted 3 to 2 to endorse the plan, which calls for the city to fund $30 million of an estimated $100-million remodeling of the stadium. Disney will pay the rest and keep most of the revenue from the facility too.

“This is an agreement that is in the best tradition of our city,” said Daly, who continued to push for a resolution even after Disney broke off talks last month. “It is a step forward, an investment in our community.”

Tony Tavares, Disney Sports Enterprises president and the company’s top negotiator, said, “We are very happy with the outcome. We think the city should be happy with the outcome. This is a unique opportunity here to create a private-public partnership.”

To the delight of civic, tourism and sports leaders, the company is expected to lend its famed marketing and financial acumen to a club overshadowed by other professional sports teams in Southern California.

The deal completes another giant step into the professional sports world for Disney, which put Anaheim on the map when it opened Disneyland in 1955. The company already owns the Mighty Ducks professional hockey team, which plays at the Pond in Anaheim.

Baseball owners approved Disney’s purchase of 25% and managing control of the team in January, but the company added a last-minute condition that it would not go forward with the purchase until it resolved stadium renovation and lease issues with the city. Disney set a March 17 deadline for the deal but talks broke off days before it was met.

The negotiations stalled on many issues, chief among them the city’s goal to build Sportstown Anaheim, a huge entertainment, retail and sports complex proposed for Anaheim Stadium property. Under the new deal, Disney will not seek to block the project, but the city scaled it back to placate the company.

Disney will not assume official operational control of the team until October but will act as unofficial advisors until then. Renovations on the stadium will not begin until September, Tavares said.

Sources put the price of the Angels at about $120 million, putting Disney’s 25% share at $30 million, close to the start-up costs of the Mighty Ducks.

Aside from funding $70 million of the renovation, Disney would keep most of the revenue from the venue until certain thresholds of attendance and parking income are met.

The Angels will enter into a 33-year lease with the city, although Disney has the option of breaking the agreement 20 years after renovations to turn the stadium into a smaller, baseball-only facility are completed in three years.

“We look forward to playing baseball here for the next 33 years at least,” Tavares said. “I know that [Disney Chief Executive Officer] Michael Eisner has no intention of moving the team from here.”

The team’s name will be changed in 1997 because Eisner, who released a statement expressing his pleasure that negotiations were completed, believed the team’s host city deserved a boost.

Although the agreement was lauded by city and Disney leaders, it was criticized by two members of the City Council who believe it will financially burden the city.

According to the city, $10 million of its investment into stadium renovations would come from stadium advertising revenue, $10 million would come from the city’s hotel bed tax that had previously been earmarked for the Pond and the remaining $10 million will come from the city’s reserves.

“This is a great deal for Orange County and California but it’s on the backs of the Anaheim taxpayers,” said Councilman Bob Zemel, who blasted city officials for what he considered “back-room negotiations.”

Zemel publicly asked each of his colleagues if they had read the two 52-page documents, outlining the deal points and other issues, given to the council Wednesday afternoon shortly before the meeting.

“We’re rushing this process,” Zemel said. “It’s been railroaded and it’s very upsetting to me.”

Councilman Tom Tait called his vote against the deal “a tough decision. I’m a big baseball fan. But I don’t sit up here as a baseball fan, I sit up here as a representative of the citizens of Anaheim. I see the benefits of Disney running the team, but at what cost? This $30 million comes out of the city of Anaheim.”

Despite the objections of Tait and Zemel, the deal was greeted with enthusiasm and relief by a majority of the council and city staff members, particularly by those who took part in the recent negotiations. Those talks moved with remarkable swiftness once they were renewed.

Both sides lauded the assistance of the American League, Angels Executive Vice President Jackie Autry and Chapman University President James Doti for the parts they played in helping bring the parties back together.

Doti was called in to help with the negotiations last week and gathered both parties in his offices last Friday to help broker a deal. He had volunteered his services to the city and Disney in a letter last month.

“Even then, the deal was still in the air and could have gone either way,” Doti said Wednesday.

In order to reach agreement, the two parties said, they compromised on some key issues: Sportstown Anaheim, the length of the team’s new lease and sports taxes.

Sportstown Anaheim will be scaled back to accommodate Disney’s demand for 12,500 ground-level parking spaces at the stadium. The complex will now be pared to about 40 acres of new development but city officials said 83% of the original building area for the project will be retained.

Disney also will not try to block the city’s efforts to land a National Football League team, although a team would have to play in a new, separate stadium built next to the Big A and will not have the option of sharing the venue, as the Los Angeles Rams did for many years.

In earlier talks, Disney had expressed reservations about how both Sportstown and a football team would affect its baseball plans.

“We don’t know what Sportstown is going to look like and we don’t know when the NFL will relocate to Anaheim,” Tavares said. “With those kind of uncertainties, we needed an escape valve.”

Disney will also pay for stadium maintenance, allow the city to hold 10 events in the stadium parking lot each year and will back off its earlier demand of sharing revenues from a football stadium if one is built in the future.

Other deal points favor Disney.

The city had wanted to retain the right to impose a sports tax in the future, as many cities have done. Disney has been historically opposed to such taxes. Under the terms of the deal, if a tax is imposed at some point on admission tickets to sporting events, any money collected from a Disney sports enterprise would go to the company in the form of stadium rent.

Anaheim will also remain responsible for the $9.3-million stadium debt, which is now mainly covered by stadium revenue. The annual payment on the debt is $1.2 million.

Disney will take over operations of the city-owned stadium in October; the fate of the stadium’s 40 full-time employees is unknown. City Manager James D. Ruth said the city would attempt to reassign any employees Disney lays off.

Wednesday’s deal marked another step in the divesting of 88-year-old Gene Autry’s holdings. Autry sold KTLA-Channel 5 and KMPC-710, Los Angeles-based television and radio stations, in recent years.

Gene Autry, the team’s founder, bought the expansion franchise for about $2.45 million in 1960. The team first played in Los Angeles until 1966, when it moved to Anaheim to play in the newly constructed Big A.

The Autrys have long hoped to rid themselves of the burden of day-to-day operations of the Angels, while retaining majority ownership. Disney will have the option of buying the remainder of the team upon Gene Autry’s death.

Although Disney announced its plans to buy the team from the Autrys last May, finalizing the deal has taken more than 10 months.

The accord was reached exactly three weeks after Disney had declared the baseball deal dead, unable break an impasse with the city after several weeks of around-the-clock negotiations.

The deal, negotiated in private meetings, closed with remarkable swiftness. Until last Friday, neither side would admit negotiations were taking place--even though a new proposal was floated to Disney by the city March 22.

Peter V. Ueberroth, who had formed a group of investors ready to buy the team before Disney stepped in last May, was waiting in the wings to try again when the Disney deal collapsed. But Ueberroth confirmed March 18 that the two sides were still involved in discussions.

When Disney walked away from the negotiating table on March 13, an irate Jackie Autry blamed the city for the collapse of the deal and vowed to move the team from Anaheim when its current lease expired in 2001. It was a threat the city took seriously, sources said.

Although Jackie Autry said there were other buyers interested--most prominently Ueberroth’s group--it was clear that she wanted Disney to be the new minority owner and applied heavy pressure on city officials to make a deal with Disney.

Initial negotiations grew complicated in February when Seattle Seahawks owner Ken Behring announced that he planned to relocate his team to Southern California, possibly Anaheim, just as the two sides were trying to close the baseball deal.

Autry accused city officials of putting their desire to build Sportstown and land a new professional football team--the Rams left Anaheim last year for St. Louis--in front of the needs of the Angels, which city officials steadfastly denied.

Disney was opposed to the idea of sharing Anaheim Stadium with a football team. Behring had brought his team to Rams Park in Anaheim last month for practices and city officials had hoped to begin official negotiations with him in the future.

But Behring returned the team to Seattle after a short stay under the threat of fines by the NFL, which is blocking the move.

With football now out of the picture for next fall, Tavares said the company looks forward to the start of renovations to the 30-year-old stadium, whose seating capacity will drop from about 65,000 to about 47,000.

Mayor Daly, too, looked forward to the future. “Now that we have resolved the business side of baseball, we can enjoy the game of baseball during the season ahead.”

Times staff writers Chris Foster and Mark Platte and correspondent Alan Eyerly contributed to this report.

* SPORTSBURG? At Disney’s demand, the city dramatically scales back its big Sportstown plans. A10

* MIXED REACTION: Business community elated at news, but homeowners group is crying foul. A10

* CLAUSE FOR PAUSE: The small print exposes big loopholes in the deal, writes columnist Mike Penner. C1

* PLAYER PERSPECTIVE: Several Angels say they don’t expect new ownership to change things on field. C6

* IMMEDIATE DIVIDEND: The team quickly signs three key young players to lucrative long-term contracts. C7

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How Deal Was Made

The negotiations that led to Disney’s agreement to purchase controlling interest in the Angels and renovate Anaheim Stadium started with a phone call in May 1995 but seemed to fall apart in March. On Wednesday, the entertainment giant and city of Anaheim announced a lease agreement that paved the way for Disney to buy the team. How the negotiations began and finally came to a close:

1995

* May 5: Disney President Michael Eisner calls Jackie Autry to discuss buying percentage of Angels; 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 after deadline is set to resolve Big A renovation question.

* 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: Mayor 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.

* March 14: Jackie Autry blames city officials for deal’s collapse, threatens to relocate team when stadium lease expires in 2001.

* March 18: Investors including Ueberroth say they are considering purchasing Angels.

* March 19: Ueberroth says he can’t proceed with talks to buy Angels because Disney and Anaheim have quietly resumed discussion; Disney executives, however, deny it.

* March 26: City officials meet with American League officials to examine why Disney deal collapsed; speculation arises that league officials are pushing city to return to bargaining table.

* March 29: Disney and Anaheim acknowledge they have reopened talks that could lead to Disney buying controlling interest in Angels.

* April 1: Anaheim offers Disney a new proposal for Angels that calls for scaling back city’s plans for a giant sports/entertainment complex called Sportstown.

* April 2: Anaheim and Disney reach tentative agreement paving way for Disney partial ownership, operational control of Angels and requiring Disney to fund most of Big A’s renovations.

* April 3: Anaheim City Council approves deal with Disney on 3-2 vote. Disney takes control of Angels; city agrees to pay $30 million of a $100-million refurbishment of Big A, scales back plans for Sportstown.

Source: Times reports

Researched by MARTIN MILLER / Los Angeles Times