Fourth Down, 3 to Go

Presenting the three finalists in the National Football League’s franchise derby:

Los Angeles offers a grand vision of urban renewal centered on reinventing the venerable Coliseum.

Carson, the small South Bay suburb, is boasting about something brand new--a combination football stadium and shopping mall that’s billed as an entertainment destination along the lines of Universal CityWalk.

In Houston, they intend to build an all-glass stadium with a retractable roof. The plan there begins with something neither Southern California proposal can deliver--$195 million in public funds.

With the NFL playoffs beginning this weekend, competition for the league’s next expansion franchise--the 32nd and the last team to join the lucrative fraternity for years to come--is about to get serious.

The league could award the franchise--and determine the future of professional football in Southern California--as soon as Feb. 16. Although the NFL is known to crave a return to the Los Angeles area, none of the three proposals has a decided edge, league spokesman Greg Aiello said. “It’s still open,” Aiello said. “No decisions have been made.”

League insiders scrutinizing the proposals have identified shortcomings in each. The league, in the words of one insider, is still seeking “modifications” that will “upgrade value.”

That may mean something as relatively simple as restructuring one or more of the proposals, perhaps to include a year-round interactive NFL Experience theme park for fans. Or the league might opt for a more radical approach and front the money needed to build a stadium (or renovate the Coliseum), then auction the franchise to the highest bidder.

According to insiders, the Coliseum deal headed by real estate developer Edward P. Roski Jr. needs more heft in its ownership group. Another issue is that Los Angeles Mayor Richard Riordan has made it evident that the project is not one of his priorities.

The Carson proposal, pushed by famed deal-maker and former Hollywood superagent Michael Ovitz and backed by an enthusiastic City Council, is weakened by its dependence on borrowed money. Ovitz and his partners have declined to say how much equity they intend to put into the project, which he has dubbed the Hacienda.

Houston, meantime, has presented a unified display of politics, fan support and financial wherewithal. Its big problem? The league covets the Southern California market, abandoned by the Rams and Raiders before the 1995 season.

“The NFL would rather get it done in L.A.,” an NFL insider said last week.

As in most big business deals, the motivation is money. Alarmed by declining TV ratings, NFL officials want to position the league for a better television payday after the 2002 season--that is, after the 32nd team begins play.

After that season, the league has the option of tearing up its eight-year, $17.6-billion TV deal, which starts each team each year with a $76-million cash infusion. Adding a local team to the Los Angeles metro area, with its 5 million TV households, would help the NFL stoke competition among the networks.

Los Angeles has 3.4 million more TV households than Houston. Moreover, the NFL simply wants a team back in what league executives often call “the nation’s entertainment capital.” The league is also intrigued by the long-term prospects of boosting the NFL brand among the burgeoning Latino population.

In the near term, the NFL also believes that it can get more in Southern California than elsewhere for naming rights to a stadium, and for luxury boxes, premium seats, advertising and sponsorship fees.

The most potent evidence for that is the Staples Center, the basketball and hockey arena that Roski and Denver businessman Philip Anschutz are building two miles north of the Coliseum. Naming rights alone for the arena, due to open next fall, fetched a record $100 million over 20 years.

By contrast, Michigan’s largest bank, Comerica, said last month that it will pay much less--$66 million for 30 years--to put its name on the Detroit Tigers’ new downtown baseball stadium, due to open in 2000.

The Staples Center also will feature some of the highest-priced luxury boxes and premium seats in any arena in the country. Roski said he expects them all to be sold by March. That adds to his--and Los Angeles’--credibility in NFL circles.

“Houston is still a very viable project for a number of reasons,” Roski said. “But I think it is important we emphasize Los Angeles, its market, its potential, for the NFL.”

Referring to Ovitz, he added: “Michael and ourselves have been a very good team. We have sold L.A. That is very important.”

For his part, Ovitz said: “I think it was great Los Angeles having two groups pursuing a franchise, to let the NFL know how much we care, but now I believe it’s counterproductive and doesn’t help both of us going forward.

“I believe Ed Roski feels the same way,” Ovitz said, adding with a laugh: “So I think they should drop out.”

History: Advantage, Coliseum

It’s what the Coliseum’s got and Carson does not: storied memories of the 1932 and 1984 Olympics, of USC football and the Rams and Raiders.

The Coliseum also comes complete with memories of a different sort: of parking hassles, seats far away from the action and security concerns. Plus, the Coliseum is in Exposition Park--long regarded by many as a tired and run-down venue near a downtown almost devoid of life after dark.

Much of Roski’s job in recent months has been to persuade owners, league officials and others that their perceptions no longer match reality--that, for instance, it really is safe, even for families with young children, to attend a football game at the Coliseum, as LAPD statistics from this year’s USC home football games confirm.

At an Oct. 27 NFL meeting in Kansas City, Mo., Roski made significant progress, according to owners who emerged from behind closed doors to admit that they had changed their opinion of the project. Since then, Roski and City Councilman Mark Ridley-Thomas have managed to do what was once considered nearly impossible: make the Coliseum look good.

In part, that’s because Ridley-Thomas has been an indefatigable promoter of the Coliseum and Roski is an excellent salesman. He’s personable. He’s quick to brag about his daughter the lawyer or about his grandchildren. He enjoys talking about his mountain-climbing adventures.

His office, atop a City of Industry office building, is jampacked with paintings and sculpture that he has collected on his around-the-world travels--as well as kitsch like hockey tickets encased in Lucite.

In addition, Roski is a player in big-time sports and in developing real estate--in particular, the Staples Center. Roski and Anschutz own the NHL Kings; a few weeks ago, they exercised an option to buy 25% of the NBA Lakers.

And, in part, it’s because of what he’s selling:

* The New Coliseum would get a thorough face-lift. The famed peristyle and the outside walls would stay; virtually everything else would be new. The stadium would be remade into a 66,000-seat facility--expandable to 80,000--with two decks, canopies, 15,000 premier seats and 156 suites. A majority of the 92,000 seats now in the Coliseum are in the end zones; in the New Coliseum, four of five seats would be along the sidelines.

* Parking would be adequate. Within Exposition Park, 8,200 spaces are now available, said Pat Lynch, the Coliseum’s general manager. A lot to be built in 1999 just east of the Coliseum will add about 2,400 spaces. Plans include a 4,000-space, four-level parking garage immediately south of the Coliseum. In all, factoring in the loss of some existing spaces because of construction, the park would offer about 12,000 spaces.

USC officials say that another 8,200 parking spaces on or near the campus, a short walk from the Coliseum, would be made available on Sundays to football fans.

The NFL, Lynch said, has asked for 20,000 spaces--which is what the combined total of USC and Exposition Park provides. “When we go across the street to existing lots,” Lynch added, meaning private lots on Figueroa Street, Vermont Avenue and Martin Luther King Jr. Boulevard, “we’re at 23,000 and change.”

* It was remarkably safe to attend a USC football game in 1998. The Trojans played seven home games, four of them at or partly at night. LAPD Sgt. Mike Montgomery, South Bureau special events coordinator, said officers took a grand total of six reports on game days from the area in and around the Coliseum.

Three of those six incidents were not related to the games. While the Trojans were beating Arizona State on Oct. 3, for instance, officers were called to the USC bookstore to investigate what Montgomery called a “shoplift caper.” The other calls involved a fan who allegedly destroyed a Coliseum seat, the theft of a purse and telephone from a parked car, and a reported battery. Rowdy crowds were unique to the Raiders, Roski said.

* Exposition Park is in the midst of a revival. The California Science Center, which opened in February, expects 2 million visitors its first year. The Los Angeles County Museum of Natural History is studying renovation. A children’s playground opened this year in the park’s northwest corner. A tree-dotted promenade now runs down the park’s western boundary, Vermont Avenue. New soccer fields just outside the Coliseum’s western gates have become the site of first-rate club games--as well as the preferred parking spot for USC’s Cardinal-and-Gold boosters.

Over the past few months, the Exposition Boulevard median strip has been landscaped; grass and trees replaced railway tracks. On the north side of the street, USC is putting up two buildings. More projects in Exposition Park are in the works, including replacing the outdoor Olympic swimming stadium with a community center and indoor pool.

And lest Ovitz grab all the Hollywood glitz, the stars came to the Shrine Auditorium--on the other side of the USC campus--for the 1997 and 1998 Oscars and the 1998 Emmys. The 1999 Grammy Awards will be held there too.

“The Coliseum sure has come a long way from what I remember,” New York Giants’ co-owner Bob Tisch, who sits on the NFL’s powerful finance committee, said after touring the neighborhood a few weeks ago.

Roski yearns for that kind of comment so he can stop doing damage control and deliver the message he prefers: that a reinvigorated Coliseum, in conjunction with the Staples Center, would help revitalize the Figueroa corridor south of downtown.

Public Support Varies

If it all works out, he said, the New Coliseum could serve as a glamorous centerpiece for Los Angeles and Southern California at the dawn of the 21st century. It could, he suggested, represent a triumph of vision, chutzpah and civic dedication in supposedly fragmented Los Angeles.

“This thing,” Roski said, “could really make a difference.”

This thing, meantime, has moved forward without much public cheerleading from Mayor Riordan. Instead of appearing in person at the Oct. 27 meeting in Kansas City, Riordan sent videotaped regards; that morning, he stayed in Los Angeles to launch his Read to Me literacy program.

By contrast, Houston’s mayor has been vocal and visible in support of the project there.

Steve Soboroff, a senior Riordan advisor, said, “There are other things to do, like education.” He nonetheless insisted that Riordan has been active behind the scenes and has eschewed more public lobbying for a reason.

Referring to NFL owners, Soboroff said, “With these guys, who are no-b.s. guys, if [Riordan was to] start doing this up-and-down political dance, saying, ‘We need this, we need that,’ they would laugh at him.”

Meantime, the promised economic infusion has reawakened investor interest in the Figueroa corridor, which stretches south from downtown to Martin Luther King Jr. Boulevard.

“People see you can turn the corner on some real estate activity,” real estate analyst Larry Kosmont said. “I’m not sure they know what’s around the corner, but they’re starting to evaluate the potential.

“This is the first step,” Kosmont said, “in making an 18-hour, 20-hour downtown.”

Redoing the Coliseum, according to Roski’s estimates, would cost $357 million. He has told the league that he would borrow $217 million and pay it off with revenue from club seats, luxury boxes, concessions and stadium naming rights.

Another $100 million, he estimated, would come from personal seat licenses and the highest-priced luxury suites in the NFL (average suite: $120,000). The remaining $40 million would be public money--$20 million in redevelopment funds and $20 million in ticket taxes.

As for the franchise fee--which is likely to top the $476 million that Cleveland paid last year to land the 31st team--Roski has told the league that he would borrow $100 million, the maximum that NFL rules permit. The rest would be put up by the ownership group, Roski said.

Responding to the suggestion that the New Coliseum needs more financial clout in its ownership group, Roski said he is close to a deal involving three or four “majority partners.” He said he won’t be ready to identify them until mid-January, after contracts have been signed.

It is known that there have been discussions with, among others, Ed Snider, part owner of the Philadelphia Flyers and 76ers, and Michael Eisner of Disney.

“Minor partners” already committed include lawyer and professional soccer executive Alan Rothenberg; businessman Bill Burke, director of the Los Angeles Marathon and husband of Los Angeles County Supervisor and Coliseum Commissioner Yvonne Brathwaite Burke; and former Ticketmaster executive Fred Rosen.

“I really believe,” Roski said, “that the Coliseum is where [the NFL] should be. From the business side, from the civic side, that’s where it should be. That’s where it’s always been.”

Marketing: Advantage, Carson

It’s what Ovitz has to offer, and what the Coliseum cannot deliver.

He’s a showman with a personal record of successful deals and a who’s-who list of stars behind him, including Tom Cruise and Kevin Costner. Also, he has struck a financial nerve with NFL owners.

“I don’t know of any syndicated TV show ever put together without being anchored in New York, Los Angeles or Chicago,” Ovitz told the league’s owners in his Kansas City presentation. “They don’t go to Houston to start a show. They go to the Big Three, and if you don’t have one of those markets, you don’t start.”

Even if he doesn’t win the day, Ovitz more than anyone else is responsible for putting the Los Angeles region back on the NFL map.

He has impressed the league’s stadium planners with realistic financial assumptions for the sale of $50 million in personal seat licenses, in contrast to the Coliseum’s perhaps optimistic projection of $100 million.

“Michael might sound outlandish at times,” said an NFL insider, “but the numbers he’s talking about are doable. More than that, there is a feeling that you can do [personal seat licenses] at a new site with a new stadium, while the question remains if you can do PSLs at a previously used site like the Coliseum in a renovated stadium.”

Ovitz talks the NFL’s language. He showed league officials a flashy video on branding the NFL trademark with the implied message that his marketing skills could be a valuable resource. He has fed the league’s resolve to expand the sale of its product overseas, giving franchise owners one more reason to consider Ovitz for induction into their fraternity.

“There is no question Michael Ovitz has the marketing skill to not only make Los Angeles successful, but provide innovative ideas elsewhere,” said Roger Goodell, the NFL’s director of league development. “I know there are a lot of people in the league interested in hearing more.”

And, Ovitz contends, he has a lot more to offer:

* His stadium-mall project in Carson at the junction of the San Diego and Harbor freeways could serve as a harbinger of what is to come in the NFL: daylong--and year-round--destinations for football fans. The New England Patriots recently agreed to move to Hartford as part of a $1-billion riverfront development, which will include a hotel, a shopping district and other amenities.

Ovitz’s stadium would cost $350 million to build, the mall an additional $188 million, according to the most recent estimates contained in a Dec. 15 letter that Ovitz sent to Carson officials.

“The mall will be connected with the stadium in a shared concourse,” Ovitz said. “You go to a Laker game and you might get there a few minutes before tip-off and leave the minute it’s over. There’s nothing to do before or after the game, and maybe that’s OK if you’re playing 50 games a year. But we’ll be playing nine games, and if you have your kids with you, we’ll have a mall with a sports theme, restaurants and attractions to make a full day of entertainment for everyone.”

* On the NFL’s recommendation, plans for the Hacienda have been downsized from 77,400 seats to 68,000. “The league wants sellouts,” Ovitz said. “More than that, it wants a backdrop showing a sold-out stadium for the television audiences.”

His stadium, which would have a California mission motif, would include bell towers and six ringing bells every time the home team scores. His plans call for the stadium to open up toward the San Diego Freeway, with Hollywood premiere-like spotlights drawing attention to the show inside. He also promises Super Bowl-like pregame and halftime shows.

“With Universal Studios, Disneyland and all the other attractions up and down the road, we must give the fans a first-class show,” Ovitz said.

Ovitz, who has plans for 20,000 parking spaces, told the league that he would sell luxury suites for about $90,000 in contrast to the Coliseum’s proposed $120,000. His average ticket price for general admission would be $40--almost right on the NFL average--and he intends to ask for an average $1,500 premium on club seats.

“Those numbers are very sound,” said a representative of the rival Houston effort.

* Although competitors have suggested that the attached mall--which would include 1 million square feet of retail and entertainment opportunities--is not financially feasible, thereby making the stadium a losing proposition, Ovitz insists that he has done his homework.

“The success of the mall probably does determine the success of the stadium deal,’ he said. “Although it takes five years to see if a mall is successful or not, we’re confident. We have tons of data on the mall, and remember we were planning on building a mall here before the stadium idea came up. We’re also presently building a similar mall 10 minutes from Manhattan on a reclaimed landfill site in New Jersey, we’re two-thirds along the way, and everything is looking good.”

* Ovitz, responding to Coliseum criticism and NFL skepticism, has satisfied the NFL’s lawyers that the Carson site, used from 1959-64 as a toxic waste dump, can be cleaned up for about $35 million in time to open the stadium for the 2002 season.

“If [the experts] don’t think there’s a problem, I don’t see a reason for it to be my problem,” said Frank Rothman, the league’s lead attorney. “If you say to me, ‘Frank, can we guarantee if they put a stadium up, there will be no problem?’ If you use the word ‘guarantee,’ the answer is no. But if you ask, ‘Do you think there will be a problem?’ the answer is no. Does the state of California think it’s a problem? No.”

At the same time, Ovitz has given the NFL an appearance of public contributions with the promise of up to $180 million, raised primarily through bonds, for the stadium and mall from Carson. The league prefers some form of public contribution.

“We’re right on track with Carson,” Ovitz said.

The 157-acre parcel is being sold for $50 million by the Southern California and Arizona Glaziers, Architectural Metal & Glass Workers Union pension plan. The buyer, Glimcher Realty Trust, intends to join Ovitz in the construction of the mall and stadium. Glimcher, based in Columbus, Ohio, has extensive experience building and running malls.

“I think we’ve met every hurdle we’ve been asked to meet starting with the questions regarding the land,” Ovitz said. “We have the type of site the NFL is looking for--160 flat acres that can accommodate Super Bowls and special events.

“Our financial people have been working right alongside the NFL on almost a daily basis. And we have the right ownership group that brings diversified skills to the project.”

Ovitz, who accepted a $100-million settlement to leave Disney after a short stay as the No. 2 man there, last year bought into Livent, a New York Broadway production company. Livent filed for bankruptcy after charges were made of questionable financial dealings involving the previous owner.

Ovitz, former chairman of Creative Artists Agency, recently opened Artists Management Group in Los Angeles, but his focus for the past year has been on the return of football.

Financing to Be Evaluated

In recent weeks, he has intensified his pitch to NFL owners. League executives have remarked in amazement that it is the old-line owners who have been the most impressed. They feel that Ovitz could give the NFL the benefit of entertainment know-how comparable to that of Disney or Fox without the complication of corporate ownership, which is prohibited by the NFL.

“There’s no getting past the fact that he’s done it before,” said an NFL insider. “Let’s face it, he’s relentless, and it isn’t easy to tell him no.”

Ovitz, who made a brief but unsuccessful bid to help the Seattle Seahawks move to Anaheim three years ago, would own at least 30% of the new franchise, the league minimum. He said Cruise will be another “substantial” investor, but Ovitz has refused to differentiate any further between the major and minor players in his 10-person ownership group.

Ovitz’s chief aide, Peter Levin, said billionaire grocery magnate Ron Burkle would play an “integral” role in the group.

In addition to himself, Burkle, Cruise and Costner, Ovitz said the ownership group would include Magic Johnson, former Laker star; Jerry West, Laker general manager; Gary Wilson, Northwest Airlines chairman; Ted Forstmann, Wall Street investor; Gabriel Brener, who holds interests in supermarkets and airlines in Los Angeles and Mexico; and Shaquille O’Neal, Laker center.

Ovitz’s financial plan calls for $400 million in loans from the Bank of America and another construction loan covering the balance of the costs of the $188-million mall. Funds also would be raised from the anticipated sale of stadium naming rights ($50 million over 10 years), advertising and sponsorship rights ($30 million over 10 years), and personal seat licenses ($50 million, also over 10 years).

Those figures are “conservative,” an Ovitz confidant said, meaning that the group hopes to generate even more money from some sources, such as naming rights.

To date, Ovitz has declined to specify what equity contributions the ownership group would make. At the same time, some in the NFL fear that he will not be able to match the franchise fees demanded in Cleveland and in the forthcoming sale of the Washington Redskins; unlike those two situations, he has said, his stadium would be built primarily with private funds. “It would be a lot easier if we had [greater] public financing,” Ovitz said. “We will pay what we have to pay but not go bankrupt. I can’t tell you now at what point we can no longer go, but we’ll do everything we can to get where the NFL sets the price.”

The NFL, while not doing much since the Kansas City meetings in studying the Los Angeles-area efforts, has hired the developer of the personal seat license concept, Max Muhleman, to evaluate the Coliseum and Carson marketing plans. The league has been working with both groups on their financial plans, and remains concerned because of the amount of debt both groups intend to carry.

In preparation for the Feb. 16 meeting, the league’s stadium and finance committees are due to come together for the first time as the expansion committee a few days before Super Bowl XXXIII in Miami.

“They have promised us a conclusion, and given financial considerations and deadlines for constructing a stadium in time to begin play in 2002, we need a resolution,” Ovitz said.

“I can’t tell you how excited we are at times and how frustrated. At times I feel like a kite, going up and down, but I think we are finally there. I’m looking forward to the day when we have a sold-out stadium, the ball in the air, and football again in Los Angeles.”

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Southern California Finalists

COLISEUM

An ownership group led by real estate developer Edward P. Roski Jr. intends to redo the Coliseum, keeping the famous peristyle and the outside walls while constructing overhanging canopies, replacing the big bowl inside with two decks and adding amenities such as luxury suites. The Roski group says that the Coliseum and the Staples Center, the basketball and hockey arena now under construction just up the street, could help spark a renaissance in downtown Los Angeles.

FEASIBILITY OF THE SITE: Everyone knows you can play football at the Coliseum, but who wants to go there to watch? Surprise--Exposition Park is in the midst of a quiet revival, with freshly landscaped grounds, a children’s park and the addition of the phenomenally successful California Science Center. And LAPD statistics show that the park is safe.

FINANCIAL PLAN: The Coliseum’s make-over would cost $357 million. Roski intends to borrow $217 million and generate $100 million in personal seat licenses and luxury suites. The balance, $40 million, would be public money. As for the franchise fee, Roski intends to borrow $100 million; he and his partners would be on the hook for the remainder, probably $400 million or $500 million.

FINANCIAL REALITY: Roski says he has put together a group of three or four “majority partners.” But he has declined to name them, saying that he can’t do that until after contracts are signed in January.

SALABILITY TO NFL: Roski is credible in league circles because the real estate developer has a proven reputation for getting it done. A prime example: the Staples Center.

MAIN ROADBLOCKS: Lingering images of unruly crowds at Raider games from 1982-94; Mayor Richard Riordan has made it plain that the project is not a priority; it remains unclear who is in Roski’s ownership group and what kind of financial bang they would bring to the table.

****

CARSON

Famous talent agent Michael Ovitz is championing a combination stadium and shopping mall that would be located in Carson, at the intersection of the San Diego and Harbor freeways. He has dubbed his stadium the Hacienda. He and other boosters tout the project as a daylong entertainment destination akin to Universal Citywalk.

FEASIBILITY OF THE SITE: The 157-acre parcel was used as a municipal landfill from 1959-64. Cleaning it up would cost about $35 million; experts say the cleanup is eminently doable.

FINANCIAL PLAN: Costs for land, toxic-waste cleanup, stadium, mall and various fees: at least $625 million. Add to that the franchise fee, expected to be at least $476 million. To pay for it all: $400 million in bank loans; a construction loan; up to $180 million from the city of Carson, mostly from bonds; project-driven revenues such as stadium-naming rights; and, finally, money from the owners themselves.

FINANCIAL REALITY: The plan depends on hundreds of millions of borrowed dollars. Also, Ovitz has raised concerns about the franchise fee; his attorney, James H. Ellis of Munger, Tolles & Olson, says that the ownership group boasts a net worth and commitment to pay “any franchise fee that makes economic sense.”

SALABILITY TO NFL: Among others, the group includes movie stars Tom Cruise and Kevin Costner, Laker executive Jerry West and billionaire grocery magnate Ron Burkle--an intriguing mix of star power and solid financial know-how. Plus, there’s Ovitz, who is relentless and whose marketing acumen and Hollywood glamour appeal to the NFL.

MAIN ROADBLOCKS: At some point, NFL insiders say, Ovitz and his group must put up their own money. Meanwhile, it is still unclear to some whether a structure the size and bulk of a stadium can be built atop a landfill. And, finally--Carson?