Ovitz Back in L.A. Huddle

Two weeks ago it appeared certain the NFL was going to put its ball in play in Houston. But a billion-dollar move by Marvin Davis, although a bluff, ignited interest in Hollywood Park and has set up a late rally by super-agent Michael Ovitz, apparently vaulting Los Angeles back into contention for an expansion franchise.

Hollywood Park gave Ovitz and billionaire grocery magnate Ron Burkle the option on a 97-acre stadium site Wednesday, prompting Ovitz to declare that Los Angeles will now be given the NFL’s 32nd franchise to begin play in 2003 at the league’s meetings in Atlanta next week.

“Based on my conversations with the NFL commissioner and the co-chairman of the expansion committee, I believe we are going to leave Atlanta Wednesday having a football franchise for Los Angeles,” Ovitz said. “It’s been a long process, but we have played the game by the NFL’s rules, and we have also been incredibly flexible in a demanding situation.”

The NFL offered no comments on the record, although it’s known that Ovitz has drawn praise for his staying power in this process and for his marketing savvy. He already has suggested several ways for the league to better market its brand name, and those plans have been circulated to every team in the league.

Several owners familiar with the league sentiment regarding expansion suggested that a decision has not been made. One specifically said, “He’s going to still have to blow our socks off.”

The league, however, has set the stage for such a surprising announcement. It has been conducting extensive background checks on Ovitz and Burkle and has delivered a 42-page document to Ovitz detailing league requirements and policy for new owners about to join their fraternity.

The league also has asked Ovitz’s ownership group, which includes actor Tom Cruise, to deliver a down payment on an expansion franchise in the next few days.

The league suggested Ovitz put up $100 million in earnest money, to be surrendered if he failed to deliver on his promises, but said the final amount probably would be up to Ovitz.

“If it’s a lot, that will be a big sign to everyone that he’s way out there on this and committed to get it done,” an NFL insider said. “Right now it appears he’s going for the gold all the way.”

The Ovitz ownership group has budgeted $375 million to $400 million for a new stadium, and the expectation is it will have to pay more than $500 million in franchise fees to gain the required 24 votes from owners to win the team.

“Our ownership group remains committed to making this happen,” Ovitz said.

The league’s expansion committee will meet the night of Oct. 5 in Atlanta, and it’s expected to study proposals from Houston and Ovitz. The committee’s recommendation probably will determine who wins the expansion derby.

“It’s L.A.’s if Ovitz follows through on everything,” said one NFL owner. “He just has to follow through.”

R.D. Hubbard, chief executive at Hollywood Park, rejected the NFL’s bid to assume Davis’ option Wednesday, but worked out a deal with Burkle, whom he regards as a friend.

Burkle’s interest in pursuing the option was also another positive sign for NFL officials, who consider Burkle’s involvement vital to an expansion franchise succeeding in Los Angeles.

“Hollywood Park has given the option on this land exclusively to Ron and Michael Ovitz until Oct. 8,” Hubbard said. “At that time they have either received the franchise or definitively agreed with us to buy the land, or it will be immediately sold to a third party.

“We’re doing this because I have great respect for Ron, and to give the league one final chance to bring a team to the Los Angeles area. It’s something I would like to do for L.A. and the city of Inglewood.”

The Oakland Raiders also made three calls to Hollywood Park in the last few days seeking the option, according to sources, but were told Hollywood Park had no interest in extending the option and would only entertain an offer to buy the land.

Hubbard agreed to extend the option on a short-term basis with Burkle in exchange for “future consideration” in the event Burkle and Ovitz build a stadium on the Hollywood Park property, rather than demanding the $250,000 Davis would have had to pay to extend his option.

Davis’ interest in building a stadium and owning the expansion team diverted the NFL’s attention from Houston, and reminded them that they had previously approved the Hollywood Park site for a stadium for the Raiders. At the same time it also opened discussions internally within the NFL on the importance of using this expansion opportunity to put a team in Los Angeles.

When it became apparent that Davis was not going to remain in the race, the league formulated the strategy of trying to assume his option on the land and then turn it over to Ovitz.

Hubbard, however, has dealt with the league in the past and didn’t put much stock in getting a quick resolve from the NFL at next week’s meetings in Atlanta. Early Wednesday, Hollywood Park advised the NFL it would have to buy the land, changing its position only when Burkle became involved.

Ovitz believes now the NFL will award a franchise to his group next week with the expectation that a stadium will be built in Los Angeles County, but excluding the possibility of returning to the Coliseum. This would give Ovitz the option of doing a deal at either Hollywood Park or in Carson.

“We’re past the critical moment--that was [Wednesday] when Marvin Davis dropped out and when the option moved to our control, giving us the flexibility now to do a deal with multiple venues,” Ovitz said. “Now we have flexibility in sites, one ownership group and the money to make it all happen.”

The new agreement with Hollywood Park gives the Ovitz group the option of purchasing the land for more than $50 million by the Oct. 8 deadline, but also provides them the opportunity to resell it to one of three groups who have interest in developing the land for business interests unrelated to sports.

Ovitz said he has been led to believe that Commissioner Paul Tagliabue will lead the discussion to swing favor in L.A.’s direction at the owners’ meetings, pointing to the NFL’s need to be represented in the country’s second-largest market as well as its desire to stage Super Bowls in Los Angeles.

Several owners are expected to still lead the charge for Houston, pointing out that an earlier NFL resolution promised the expansion team would be awarded to Houston if Los Angeles failed to make an acceptable offer by Sept. 15.

Ovitz, however, said he believes the league has come to the conclusion that an existing team will be moved to Houston.

“They know Los Angeles will not accept a transfer team,” he said.

To further frustrate Houston, Ovitz said he expects Houston’s franchise fee for an expansion team will be higher than the one presented by his ownership group.

The league might be inclined to accept a lower offer from L.A. because it no longer has plans to contribute $150 million toward the construction of a stadium.

Both Ovitz and Eli Broad, who has been working on behalf of the Coliseum, have asked that the league award the franchise to an owner, then allow him the opportunity to complete a deal in Los Angeles. The league has insisted on a stadium deal first but now appears to have changed its focus as a final decision is about to be made.

“All the talk has had the team headed to Houston now for three years, and had I listened to that, I would be long gone by now,” Ovitz said. “But I’ve always believed it’s not going there. It’s coming to Los Angeles, and we will have it next week.”