Steve Ballmer could buy his way out of his Clippers arena problems
For years, the company owning one Inglewood arena and a group proposing to build another have waged a bitter, expensive legal battle.
The cost of the litigation between Madison Square Garden Co., which owns the Forum, and Murphy’s Bowl LLC, the Clippers-controlled company developing a proposed billion-dollar stadium less than two miles away, has cost both sides millions in legal fees each month, according to a person not authorized to speak publicly.
And in recent months, neither side appeared ready to blink.
“I’m not sure they understand what they’ve gotten themselves into, from my perspective,” Clippers owner Steve Ballmer said in October, “in the sense that we’ll just keep going.”
Clippers owner Steve Ballmer is in negotiations with the owner of the Forum to purchase the Inglewood arena, according to a person familiar with the talks.
Earlier this winter, however, as the Clippers’ project gathered momentum, the sides began discussing a resolution. Negotiations for Ballmer to buy the Forum have taken place since at least early February and a deal is close to completion, a second person with knowledge of the discussions said.
By effectively buying out MSG’s opposition, Ballmer, the wealthiest owner of a North American professional sports franchise, would clear a significant obstacle in the path of starting construction on the privately financed Inglewood Basketball and Entertainment Center by July 2021 in order to open on time for the 2024-25 NBA season.
Though the Inglewood stalemate is not the first high-profile dispute between owners of existing stadiums and others backing a new, competing venue, it has been unique in its vitriol and length, said Marc Ganis, the founder of Sportscorp Ltd, a Chicago-based sports business consulting firm with experience in Los Angeles.
Bringing the two sides together, he speculated, could have been common ground of the high cost of continuing that fight. The Clippers’ lease to play at Staples Center, its home since 1999, ends in 2024.
“Ballmer very much wants to build a new arena and would like to do so sooner rather than later and the Forum owners believe one of two things,” Ganis said. “They believe they can’t stop it but can only delay it, or two, Ballmer is offering such a sweet price that they can basically cash out and earn roughly what they would have earned had they kept operating it.”
MSG decline to comment on the potential sale.
In a statement released Sunday, the Clippers said they “continue to pursue plans to build a state-of-the-art, 18,000-seat basketball arena and entertainment complex in Inglewood and are currently working with the city to successfully complete the comprehensive Environmental Impact Report. We are examining every possible way to resolve our differences with Madison Square Garden Co. regarding our new arena.”
Those differences involved three ongoing lawsuits by the Madison Square Garden Co. In addition, a community group whose legal fees are being paid by MSG also has one pending suit and another it is appealing. Murphy’s Bowl countersued MSG last year.
The Federal Aviation Administration determined last month that much of the Clippers proposed arena development poses no threat to aviation.
Built in 1967, the Forum was purchased by MSG for $23.5 million in 2012 and underwent $100 million in renovations one year later to transform the former home of the Lakers and Kings into what the company predicted would become “the largest and most important indoor performance venue in the country.”
How Ballmer would use such a venue, which was added to the National Register of Historic Places in 2014, is unclear, but the renovations that made the Forum a top concert space also left it with a configuration unusable for NBA and NHL games. There are no plans to knock down the venue, according to a person briefed on the potential use.
In recent months, Ballmer’s proposed arena received several proverbial green lights. In October, the Federal Aviation Administration determined that 37 applications related to the project posed no hazard to air navigation. In November, a Los Angeles Superior Court judge ruled the 28-acre complex did not violate the state’s Surplus Land Act. That ruling followed a lawsuit from a community group that alleged the exclusive negotiating agreement between Inglewood and Murphy’s Bowl LLC breached the act that requires public agencies to give first preference to using extra land for housing, recreation and schools.
Using legislation passed in 2018, Gov. Gavin Newsom in December certified the project to shield it from extended environmental litigation. One month later, MSG sued Newsom and the state’s Joint Legislative Budget Committee, saying the legislation violates the state constitution.
The Inglewood City Council is not expected to certify the environmental impact report, which was released in December, until late spring or early summer. That would open a 270-day window for legal challenges to be adjudicated, a process that could end only a few months before construction is set to begin.
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