Stadium May Be Built by NFL

Commissioner Paul Tagliabue confirmed for the first time Friday, after his annual Super Bowl address, that the NFL is considering funding a new football stadium in Los Angeles that would clear the way for the league’s return in 2002.

“It was discussed [this week] and we will continue to consider it as an alternative and bring it up again at our Feb. 16 meeting,” Tagliabue said.

Earlier, during his one-hour question-answer session with reporters, Tagliabue said he expects the owners to choose between Houston and Los Angeles in March, but instead of awarding the 32nd expansion franchise to a particular owner or site, it would go to the winning city.

“We may have to make this a two-step process, where we select a city first, either Houston or Los Angeles, then deal with the ownership issues,” Tagliabue said.

He also indicated that Los Angeles would be in the running for the 2003 Super Bowl if, as expected, San Francisco loses it.

Even the folks from Houston, who are unified behind prospective owner Robert McNair, interpreted Tagliabue’s address as a clear sign the NFL has made its return to Los Angeles all but official.

Los Angeles has two ownership groups vying for attention, and while they have impressed the owners with their work, their efforts also have convinced some NFL owners that there might be a bigger payday if they open the bidding to others.

That would allow the NFL to follow the expansion model it used in Cleveland. There, the league put up $75 million toward the construction of a new stadium and the purchase of a practice facility before considering who would own the franchise.

“The league funds the money for the construction of the stadium, stepping in for the team owner, who will be picked at a later time,” an NFL official said. “Then the league sells off that commitment when the owner is selected, the new owner paying for both the stadium and the expansion franchise.”

Those familiar with the Cleveland model expect the NFL to award the expansion franchise to Los Angeles conditionally, demanding that certain luxury-suite and club-seat sales be met before the league advances any money for the construction of a new stadium. The money raised from the sale of luxury suites and club seats also would go toward the construction of the stadium, thereby reducing the amount owners have to come up with.

The NFL, which wrote the terms of the lease for Cleveland’s new stadium, gave the city a deadline of Jan. 31, 1997, to sell $9.4 million in annual luxury-suite and club-seat leases, a difficult task at the time because that was 15 months before the league was required to announce whether it would be putting an existing team or an expansion franchise there.

Cleveland met the goals, however, and sold more than 50,000 permanent seat licenses. The success of the Staples Center in downtown Los Angeles in selling luxury suites and club seats at higher prices than anywhere else in the country has convinced the NFL that it could double the figure raised in Cleveland.

The key to the Cleveland deal was the partnership struck between city politicians and local businessmen, who worked with the NFL’s marketing team in meeting sales projections.

Cleveland businessman Al Lerner, who immediately bought four luxury boxes and worked with Mayor Michael White in raising interest in the business community, later earned White’s endorsement as the team’s owner.

After a bidding process that drew seven prospective owners, the NFL, as expected, approved Lerner’s bid of $530 million, which included his repaying the league the nearly $75 million it had advanced for stadium construction.

If the NFL follows that plan, Eli Broad and the New Coliseum partners, and Michael Ovitz and his Carson group will be waiting in line like any other billionaires bidding for the opportunity to buy both the stadium and franchise.

“Our interest will continue unabated,” Broad said. “I’m gung-ho. This does not turn me off. That’s their call, and if they have another plan that they think is better, then I will be a bidder for it. We have the best location and we’re going to bring football back to the new Coliseum.”

Ovitz was unavailable for comment.

There is still a chance that the NFL’s Expansion Committee, at its meeting Feb. 16 in Atlanta, will set a franchise sales price and allow Houston to compete against both Los Angeles groups to meet it. But the NFL’s recent experiences in Cleveland and Washington, where auctions were conducted, resulted in higher franchise fees than expected.