Anaheim’s Challenge

The disclosure that the Walt Disney Co. is considering selling the Angels and Mighty Ducks sent shock waves through the host city of Anaheim in recent days. It may have seemed unthinkable that a company with such a local stake might divest itself of the sports properties, but it is clear that Disney believes that the reason for owning the teams--to secure the basic company franchise in Orange County--has been achieved. Now Anaheim, with a stake in both the Pond and Edison International Field, needs to guard its financial interest and preserve the “synergy” constructed by Disney, which, significantly, also works for the city’s interest.

A sale of the franchises does not appear to be imminent, but whatever happens it is important that the city bolster its position as a major entertainment destination for Orange County and Southern California.

Keeping the sports franchises in town will be part of the task. Anaheim has a $30-million investment in the renovation of Anaheim Stadium, now Edison Field, and its financial obligation for the Pond is considerable. In the latter case, the arrival of Disney as owner of the Mighty Ducks spared the city an even higher cost for the facility. Disney provided one crucial tenancy, but the city still has to pay the operator of the Pond because no professional basketball franchise yet has come to the building. This multimillion-dollar obligation was part of the original terms of the development of the Pond.

In the recent discussion of Disney’s objectives, the term “synergy” as it applies to the interaction of various corporate properties came up as a way of explaining why the company might be interested in selling the sports teams. One reason explored was the inability of the company to get a regional cable sports channel to provide a secure broadcast outlet for sports programming. But “synergy” operates on two levels, and it is the second of these that has special significance for Anaheim.

Long a host town for Disneyland, the manner in which the convention center and Disney businesses are part of a mix shapes the city as a destination both for tourists and locals. The idea is that various kinds of entertainment attractions work together within the city limits. This concept was critical in Orlando, Fla., where several theme park attractions were a way of capturing a chunk of people’s vacation time.

Earlier in the decade, Disney explored a range of second theme park ideas for Southern California in Long Beach and elsewhere. At times, it seemed as if there were a proposal du jour, with various ideas floated and then suddenly altered or rejected.

In the end, the decision to go forward with a second theme park in Anaheim turned in part on the idea of how attractions serve one another. The idea was that it would be possible to capture and keep tourists interested in things locally.

When Disney entered the major league sports arena, this notion of providing a range of places to go was at play. We now know from Disney chief Michael Eisner’s recent statements that part of the company strategy was defensive, namely keeping the Angels from leaving town. This rationale that the teams matter for the entertainment attractions now has a second life, in a different sense. With a second theme park slated to come on line, Disney has an interest in the sports teams’ welfare even if it divests entirely or owns only part of them.

When Disney entered the sports business, the city also had reason for concern about a deteriorating environment. It was faced with the departure of the football Rams, an obsolete football-baseball hulk at Anaheim Stadium, and its gamble of city money at the Pond.

In its own thinking about downtown, transportation and the convention center, the city has tried with reasonable success to advance its concept of synergy. Through the 1990s, it has wanted to have tourism and sporting elements that worked together to complement each other and kept people coming.

But through all this, it has been clear that while the city can help shape its destiny, it is in many ways dependent on the decisions of others. So for the city the challenge remains leveraging its success at conventions and hosting theme parks to maintain and improve its own position with any new franchise owners who may come on the scene.

It should protect the financial interests it already has in the two major sports facilities, and it should work to keep the two major sports franchises in town. It also must be ready to work with a new array of players to enhance its own standing as a leading tourism center.