NFL: Show Us More Public Money

Read his lips: No football team without more of your money.

After two days of owners’ meetings here and presentation of a Los Angeles plan to contribute $150 million in public money to build parking garages in Exposition Park, NFL Commissioner Paul Tagliabue said the NFL will not return to Los Angeles without more of the public’s money.

Cutting through all the happy talk about progress Wednesday, nonbinding letters of intent and unidentified agencies that might be willing to provide bonds for parking facilities, the NFL does not believe a projected annual profit of $25 million to $28 million will be enough to merit the investment required to build a stadium and own an expansion franchise.

“We feel clearly that the current levels of public money being discussed, such as the public bonding with a private payback [for construction of parking garages], are not sufficient to the economics to make the team work,” Tagliabue said. “It wouldn’t work for the owner or the fans because you couldn’t field a competitive team.”

Bill Chadwick, appointed by Gov. Gray Davis to oversee NFL negotiations with the state-owned Coliseum, presented a seven-page nonbinding letter of intent to league owners earlier in the day with a plan to raise $150 million from bonds for the construction of 15,000 parking spaces in Exposition Park.

The bonds would be supplied through various public and nonprofit entities, according to Chadwick’s term sheet, and be repaid either through property taxes derived from the premises, parking revenues, a ticket tax, local taxes generated from the site or from the rent paid by the team owner.

“That solves the parking problem,” said one NFL owner, “but it’s taking money out of the pocket of the owner of the expansion team because the revenue from parking will be used to repay those bonds. Most of the terms we have heard so far take the money out of the owner’s pocket.

“This deal is tough enough without that happening and won’t happen without a major chunk of public money. That’s what L.A. will have to decide in the next few weeks. Is it willing to make the public investment to have an NFL team?”

Billionaire Eli Broad, who recently wrote about the positive effects of using public money to bring football back in a commentary for The Times, said if he had known “how skimpy the returns were going to be on this deal at the start, I would never have gotten involved.”

Broad, sounding the Tagliabue refrain, also made a pitch for public contributions above what have already been discussed.

“Outside of the stadium I believe public entities should have the responsibility for site work, including the demolition of the Sports Arena,” Broad said. “It’s public property and we’re prepared to build a stadium and pay rent for the site, so it should be [a public] responsibility to prepare the site. I don’t know what’s involved [or how much might be asked]. It’s not significant.”

Broad said a new stadium will cost between $400 million and $425 million. Adding the franchise fee that Cleveland paid for an expansion team, Broad said, the owner of L.A.’s new team will have to come up with at least $900 million.

The NFL’s Expansion Committee will recommend in a letter this week that the owners approve a $150-million contribution to the L.A. project, dropping the projected investment by Broad or ownership competitor, Michael Ovitz, from $900 million to $750 million.

Broad said he expects L.A.’s team to generate a profit of $25 million to $28 million a year. Asked if he has ever invested $750 million with the prospects of a less-than 3% return, Broad said, “No. I wouldn’t have the net worth that I do if I did.”

Broad, however, softened his approach here with NFL owners after being criticized in recent weeks for driving too hard a bargain. Behind closed doors he told a story about Hollywood producer David Geffen, who purchased a $20-million painting, indicating now that he might be willing to meet the demands of a $750-million investment.

Broad said he asked Geffen why he would pay $20 million for a painting and was told, “I can appreciate the painting more now [at this stage in his life] than the $20 million.”

In an aside later, he said, “My net worth has gone up since we started this process. I might be more inclined to do something that I wouldn’t have done earlier in the process. I’m emotionally invested now in making this work.”

Ovitz said, “The state is going to have to bring something to the table,” just as the NFL and the owners of the team are. He said he’s unable at this time to specify what the state will need to contribute to make the deal work.

Tagliabue said there was some sentiment in committee meetings to select an ownership group at this time in Los Angeles, which would have had Ovitz emerging with the project, but he said that was rejected because the league had come to these meetings unprepared to make such a significant decision.

Chadwick, praised by the NFL for breathing new life into the L.A. project, received support from Broad and Ovitz at a news conference after his presentation of lease terms for the Coliseum to the owners.

“I presented an exclusive negotiating agreement . . . designed to give structure to conversations of having the Coliseum as the leasing site for the return of the NFL,” said Chadwick, who said he has been asked by Denver owner Pat Bowlen to remain involved in the L.A. project once his responsibilities with the state have been met. “The expansion committee needs to approve the document. We believe in a couple of days they will do that. We expect them to sign off on it by the end of the week.”

Chadwick and Tagliabue, apparently had a failure to communicate. Tagliabue said the NFL has no intention of signing off on Chadwick’s nonbinding letter of intent.

“No, it’s a work in progress,” Tagliabue said. “There are things in there we are in agreement with and things we are not in agreement with. We need further negotiations. I don’t see any need to execute it. There are a number of economic issues that need to be improved in order for the team to be successful.”

The letter of intent calls for $5 million in rent for the new Coliseum, a usage fee attached to tickets that is projected to raise $3.2 million for 47 scheduled events to help pay for the parking garages, naming rights to be sold by the team owner to the football stadium and the awarding of a Super Bowl to Los Angeles by 2006 as long as the new stadium is open by 2003.

Los Angeles City Councilman Mark Ridley-Thomas, here for the NFL meetings, said, “This is a framework for a deal. It’s not a final deal by any means, but it’s progress.”

Despite the positive spin on Chadwick’s presentation, Tagliabue reiterated the league’s position that 49 days from Wednesday, Los Angeles must satisfactorily meet a Sept. 15 deadline or the league will shift attention to Houston.

“What’s likely to happen if this process goes forward as I think it can is that by Sept. 15 we should have in front of us a total package from the various California authorities and ownership groups,” Tagliabue said. “That would include the development of the site plan, how the stadium will be built, the lease for the use of that stadium, the management for the NFL team that will operate in that stadium complex and offers from ownership groups on what they are prepared to pay for the franchise.”

The last item is a significant departure from Tagliabue’s earlier comments in which the NFL said it would set a franchise fee, avoiding an auction and the appearance of being too greedy.

“We’re still not there, but there has been a lot of progress in seeing how this can potentially get done,” Tagliabue said.

The NFL has scheduled a meeting for Sept. 22 to determine if Los Angeles has satisfied its Sept. 15 deadline.

WHAT’S HAPPENED

NFL expects to recommend a plan in which owners will approve $150-million contribution to L.A. stadium construction.

NFL believes parking problems have been solved in Exposition Park with proposed building of 15,000 parking spaces.

NFL will focus exclusively on Coliseum plan until Sept. 15.

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WHAT’S NEXT

L.A.’s ownership groups (Broad / Roski and Ovitz) present figures on what they are willing to pay for a franchise.

State, county and city must decide whether they are willing to commit additional public money to the project.

L.A. group has 49 days to develop the site plan, demonstrate how the stadium will be built and provide a completed lease for the use of that stadium, or the NFL will shift attention to Houston.

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NFL IN L.A.

Days since there was pro football in L.A.: 1,697

Ram’s record since moving: 22-42 (.344)

Raider’s record since moving: 27-37 (.422)