On This Issue, Moreno Is a Real City Stickler

The people who sell Arte Moreno’s baseball team and the people who defend it in court can recite sober and precise explanations for its controversial name change. Get the marketers and lawyers on a roll, though, and the monotones dissolve into the sounds of childlike enthusiasm: L.A. against New York! L.A. against Boston! That’s excitement! That has a ring to it!

So, tonight at Dodger Stadium, it’s L.A. against L.A., the former Anaheim Angels against the Los Angeles Dodgers. In the four months since Moreno declared his team would henceforth be known as the Los Angeles Angels of Anaheim, he has alienated some of his fan base, endured national ridicule and suffered the wrath of both of the cities in the new name and the state legislature too.

But he has not backed down, and he has not wavered in his conviction that the Los Angeles label will fill his pockets with the cash to pay for a championship team, hold down ticket prices and turn a profit too.

He presents his team as the Angels, no city attached, same as last year. With fans flocking to Angel Stadium and team revenues at record levels, the success raises the question of why he could not have continued to de-emphasize the Anaheim affiliation, market aggressively to Los Angeles and beyond, win, and prosper without the name change.

“I’m not saying it couldn’t happen,” he said. “But we believe there will be a comfort level, both locally and nationally, for people understanding that we are part of the Los Angeles metropolitan area.

“If you are in Mexico or in Toronto, if you are in Kansas City or New York, in Boston or in Chicago, when a fan recognizes where the team is from -- the metropolitan area -- they’re familiar with Los Angeles. In the long term, we’re going to be a stronger economic franchise if we brand there.”

Moreno shrugs off the slings and arrows, at least publicly, and the demands for proof of a payoff. He might be wrong, but he’s willing to risk his money to find out.

“The hard evidence,” he said, “is more of a 20-20 hindsight thing.”

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Never have the Angels been more popular. They sold 95% of their seats last year and a record 27,500 season tickets this year. The name change is not about attracting more patrons, Moreno says, but about persuading broadcasters and advertisers to pay more by reminding them the team plays in the second-largest media market in the country.

Is he right? Too soon to tell, but the sentiments of industry professionals across the country range from curious to skeptical.

“They’re looking for the same thing everybody is looking for -- how many butts you’re putting in the seats and how many eyeballs you’ve got on your broadcasts,” said Rob Gallas, former senior vice president of marketing for the Chicago White Sox. “I don’t know if a name change would have any effect on that.”

The Dodgers will receive about $33 million from Channel 13 and FSN this season, the Angels about $24 million from Channel 9 and FSN. That’s already a boost for the Angels, who reaped a $6-million bonus from FSN -- not because of the name change, but because the cable channel agreed to air 102 games this season instead of the required 50.

The city of Anaheim has sued the Angels, charging the new name violates their stadium lease. Although the Angels and Dodgers won division championships last year, with similar crowds and similar ratings, Angel President Dennis Kuhl testified in court papers that Channel 9 offered $5.5 million a year to renew before signing the Dodgers.

“This is just one example showing that the Angels are severely financially penalized because they are perceived as being in the Anaheim market, not Los Angeles,” Kuhl said in his court declaration.

Channel 9 guaranteed the Angels $5.2 million for 40 games this season, then signed the Dodgers for about $9 million for 56 games, including six exhibitions, next season.

Channel 9 considered its offer an opening bid and expected to go higher, but the Angels never submitted a counteroffer before the station reached agreement with the Dodgers, according to two sources familiar with the negotiations.

The former president of Fox Cable Networks, Jeff Shell, dismisses Kuhl’s claim by pointing to the Clippers, who share the same city name -- and the same arena -- with the Lakers but receive a fraction of their television revenue.

Shell saluted Moreno for fielding a strong team that attracted large audiences in person and on television, but he said the Angels would have to sustain that success over the long term to get deals similar to those of the Dodgers.

“The TV revenue the Angels are receiving vis a vis the Dodgers has nothing to do with the name Anaheim or where they play,” said Shell, now president of programming at cable giant Comcast. “It has to do with the fan base. It has to do with the number of winning seasons. It has to do with tradition.”

Sal Galatioto, a New York investment banker who specializes in sports finance, said the Angels can generate substantially more money by starting their own channel, perhaps in partnership with a cable company, an option Moreno says he is considering. The Angels could join the Mighty Ducks on such a channel in 2008, when the FSN contracts of both teams expire -- or use that leverage to get a better deal from FSN.

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The city of Anaheim has 345,000 people, according to the state department of finance. The five counties of Los Angeles, Orange, Riverside, San Bernardino and Ventura have 18 million. Simple math, Moreno says, explaining why advertisers might not buy the Anaheim Angels, or might pay more to buy the Los Angeles Angels.

“When a TV camera hits your sign, you’re going to a whole metropolitan area,” Moreno said. “It helps brand your product. And, if we’re winning, you get the opportunity to package your product with a winner.”

Since the Angels’ broadcasting outlets already reach the metropolitan area, and the name change does not expand the market size, Moreno’s strategy raises eyebrows within the industry.

“I don’t think it will make a difference from a revenue standpoint,” said Hayes Roth, vice president of worldwide marketing for Landor Associates, a San Francisco-based branding company. “Every media professional in the world knows exactly how many people are in that audience.”

Andy Dolich, former marketing chief for the Oakland Athletics, said he always pitched advertisers on the broader San Francisco Bay Area audience, not the Oakland one.

“That dissolved any reticence about where Oakland was,” said Dolich, now president of business operations for the NBA’s Memphis Grizzlies.

Dolich also said team sponsorships -- as opposed to league-wide sponsorships -- generally are negotiated with regional companies and ad buyers.

“These buys aren’t made in Atlanta, New York or Zurich,” he said.

But Gallas said that teams that once sold ads directly to a local beer distributor, or to a local association of car dealers, might now need additional approvals from corporate headquarters, or from a Madison Avenue ad agency that might equate Southern California with L.A.

Chris Smith, chief strategy officer at the Marketing Arm, a Dallas-based company that matches advertisers with sports and entertainment properties, says his client list includes national corporations who have dismissed the Angels as Anaheim’s team.

“In the past, when they were looking for a presence in Los Angeles, the Angels never came to mind,” he said. “The first consideration was the Dodgers. The second consideration went to other properties,” including the Lakers, Kings, USC, UCLA, Getty Center and Hollywood Bowl.

“When Arte Moreno is targeting national and regional sponsors looking for a presence in that market, it helps to have the L.A. name in there,” he said. “For a long time, the Angels have been left out of that mix.”

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Moreno can’t sell a “Los Angeles Angels” T-shirt without including “of Anaheim” or risking court sanctions, since the suffix enables him to claim compliance with the lease. Even if the Angels clear that legal hurdle, however, he insists he has no plans to slap L.A. across uniforms and merchandise.

Said Roth: “If he believes it’s so important to be associated with Los Angeles, why wouldn’t he want to have the name on everything he does?”

Said Moreno: “We’re branding the haloed A, our colors and Angel baseball, and we’re going to build consistency in our brand.”

Why not Los Angeles?

“You can’t brand everything,” Kuhl said. “Nike brands the word Nike and the swoosh. That’s it. We’ve picked three things we want to brand.”

Moreno said the reaction to the name change is “about what I expected,” but his associates say privately he is stunned -- not by the outrage among some Orange County fans, but by the city’s refusal to yield, by the Dodgers and the Los Angeles City Council lining up to oppose him and by the state legislators threatening to force “this team plays in Anaheim, not Los Angeles” disclaimers upon him.

Numerous fans have sold protest T-shirts, and the city of Anaheim has distributed its own batch. For now, the owner making a few bucks off the name change is not Moreno but the Dodgers’ Frank McCourt, who mocks the Angels by selling “Los Angeles Dodgers of Los Angeles” T-shirts for $25 each.

Moreno vows to stay the course and expects the name change to pay off -- not immediately, but over a period of five to seven years, as the perception of the Angels sways his way with each mention of Los Angeles and as he negotiates new deals with broadcasters and advertisers.

If he can do those deals, he argues, he can field a consistent winner while keeping ticket prices relatively low. The White Sox generated more revenue from ticket sales last season than the Angels, he said, even though the Angels sold 1.5 million more tickets.

The Angels’ average ticket price of $16.60 this season ranks 22nd among the 30 major league teams, according to Team Marketing Report.

“Go ask the fans: Do you want to pay 50% more for tickets?” Moreno said.

Even as some loyal fans object to the name change, Moreno works to attract a new generation of fans from across Southern California, unconcerned about Los Angeles or Anaheim but thrilled by Vladimir Guerrero.

“You basically acquire all your fans by the time they’re 8 years old,” Galatioto said. “It’s very difficult to get a 15-year-old or a 25-year-old to change allegiances.”

For too long, Moreno says, the Angels labeled themselves an Orange County team, artificially limiting the revenue needed to maintain a first-class roster. He loves L.A., even if he alienates some of his customers, political partners and rivals with no guarantee of success.

Said Galatioto: “That’s the beauty of being innovative. You really don’t know until you try.”

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Revenue snaring

If a big-city name alone meant big bucks, then the two New York teams and the two Chicago teams would have generated similar amounts of revenue last season. But according to figures obtained by The Times, the traditional “second” teams in baseball’s biggest markets trailed the market leaders by millions:

*--* Team 2004 revenue* New York Yankees $275 million New York Mets $150 million Chicago Cubs $150 million Chicago White Sox $110 million Los Angeles Dodgers $180 million Anaheim Angels $110 million *-The figures represent approximate local revenue for 2004, including ticket sales, concessions, sponsorships and local television and radio contracts. The figures do not include national revenue--about $30 million per team, mostly from national broadcasting and licensing contracts--and do not account for revenue sharing among teams.

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Source: Los Angeles Times