Wednesday, November 03, 2010

The National Football League – will the league head back to Los Angeles?


What do Magic Johnson, Ari Gold and a California city called Industry all have in common? In the last five months all three (Gold a fictional character played by actor Jeremy Piven on the HBO series Entourage) have been linked to helping bring a National Football League franchise back to Los Angeles. At the end of the 1994 season, the Los Angeles Rams moved to St. Louis and the Los Angeles Raiders headed back to Oakland. Amazing as it may seem at times, it has been 16 NFL seasons since an NFL franchise called Los Angeles home.

It was during former commissioner Paul Tagliabue’s watch as Los Angeles lost the Rams and the Raiders. As history showed, Tagliabue regretted losing America’s second largest city and the center of the entertainment universe as a home to an NFL franchise.

The St. Louis Rams won the NFL championship in 1946, moved to Los Angeles and became the Los Angeles Rams. On April 2, 1979 Rams owner Carroll Rosenbloom died and ownership of the Rams was turned over to his widow Georgia Frontiere.

On Christmas Eve, in 1994, less than 30,000 fans showed up as the Rams lost their final game at Anaheim Stadium 24-21 to the Washington Redskins. After some initial resistance the move would not be approved by NFL owners, ending the Rams 49-year history in Los Angeles. Frontiere, a St. Louis native, moved the Rams back to St. Louis.

Al Davis successfully brought a suit against the National Football League and won the right to move the Raiders from Oakland to Los Angeles in 1982. The National Football League lost its legal battle for the right to prevent member teams from moving from city to city on November 6, 1981.

The Supreme Court refused to hear the N.F.L.'s appeal from a lower court’s ruling that the leagues effort to block the Oakland Raiders from moving, to Los Angeles in 1980, violated Federal antitrust law. After the owners of the N.F.L.’s 27 other teams had barred that move, the Raiders brought a successful antitrust suit against the N.F.L. at the Federal District Court in Los Angeles. A jury agreed with the Raiders and the Los Angeles Memorial Coliseum, also a plaintiff in the suit, that the ''location agreement'' in the N.F.L.'s bylaws was a conspiracy among economic competitors to restrain trade, in violation of the Sherman Antitrust Act.

A dozen years later, on June 23, 1995, Davis signed a letter of intent to move the Raiders back to Oakland. This time the NFL didn’t fight Davis’ decision.

In less than six months, the City of Los Angeles went from being home to two NFL franchises to not having an NFL franchise. The challenges that drove the Rams and the Raiders from Southern California were not only questionable fan support, but that Davis and Frontiere believed the stadiums were not good enough for their NFL teams. Davis’ Raiders played their home games in the Los Angeles Coliseum, initially built for the 1932 Olympics and then renovated for the 1984 Games. The Coliseum is in a terrible area and fans became afraid to attend games. The Rams played their games at Angels Stadium in Anaheim, a terrible facility for football located 45 miles from downtown Los Angeles.

As early as 1996, then NFL commissioner Paul Tagliabue addressing the media at his Super Bowl press conference made it clear - Los Angeles was very much in the picture when it came to NFL expansion.

''I've said several times already we have to take a hard look at expansion to deal among other things with Cleveland and Los Angeles,'' Tagliabue said, emphasizing he doesn't consider moving current franchises to those cities as an acceptable option.

''Our first goal, and one I think we made a lot of progress on, is team stability. We solved very difficult problems in the last 12 months in Tampa and Cincinnati and Detroit and we made a considerable amount of progress in Seattle . We accomplished our goals in Cleveland under the agreement we struck early last year.

''Hopefully, we can accomplish the two goals together: team stability, no more moves, and teams in Cleveland and Los Angeles.

''Earlier this week, Mayor Thomas White announced all the goals have been met, that the Browns will be in a new stadium on the lake front playing as the Browns in Cleveland in 1999. That plus the LA situation requires us to look at expansion.''

The NFL awarded an expansion franchise to Al Lerner in September 1998. Lerner paid $540 million. That left the NFL with 31 franchises. Historically the NFL doesn’t like to have an odd number of franchises. While the league has continued bye weekends for teams (initially created when the Cleveland Browns returned to the league in 2000), the NFL wants every team to play the first few and last few weekends of each years’ NFL schedule.

After awarding Cleveland the league’s 31st franchise, the league made it clear it wanted to award their 32nd franchise to Los Angeles. The NFL considered the Coliseum in 1998 and stadium projects in Hollywood Park and Carson. At the time, California Governor Gray Davis, opted not to deploy $150 million in taxpayer money to build new parking garages, suggesting taxpayers had more important priorities. The NFL’s plans to expand to Los Angeles began to fall by the way side and the NFL’s Los Angeles stadium plans died on September 15, 1999.

Former Disney president Michael Ovitz and the grocery chain executive Ron Burkle emerged as the leading candidates interested in owning an NFL team using land around Hollywood Park. Six weeks later Ovitz and Burkle were on the outside looking in, as was billionaire Marvin Davis who did not believe he could make it work.

It was only then; the NFL began to seriously consider Bob McNair. McNair was ready to pay an expansion fee and had a $310 million stadium plan in place for Houston. He was ready, Los Angeles was not.

''We should give Houston the team, and look forward to another day in Los Angeles,’’ the late Robert Tisch, co-owner of the Giants and a member of the league's finance committee told The New York Times on September 29, 1999.

Greg Aiello, a league spokesman, told The Times only expansion would be discussed at a meeting the following week in Atlanta . ''We're looking at the possibility of expanding by a 32nd team,'' he said. ''But long term, we'd like to be in both cities.''

The NFL awarded their 32nd franchise to Bob McNair for a then record expansion fee of $700 million the following week at meetings in Atlanta. At the dawn of a new century, the NFL accepted that America’s most important entertainment center would be without an NFL franchise for the foreseeable future.

Not a great deal happened, until retired NFL commissioner Paul Tagliabue met with California Governor Arnold Schwarzenegger in November 2005. The two focused their discussions on being able to bring an NFL expansion plan to NFL owners in March of 2006.

At his last Super Bowl press conference on February 3, 2006 Tagliabue addressed where the league was as far as expanding back to Los Angeles.

“I think we're making the kind of progress that I anticipated in November when I was out there to meet with the mayor and the governor. At that time I said we were looking to have two clear-cut alternatives, focused on the Coliseum and Anaheim to bring to our membership at the March meeting and I think we're on track to do that. As to which one is in the lead, I think is something we'll be talking about at our March meeting,” Tagliabue answered that day as part of his state of the NFL question and answer period.

On March 28, 2006 NFL staff offered the league’s 32 owners a 30 minute presentation regarding two potential locations for an NFL Los Angeles expansion franchise. A new stadium beside the Coliseum and a new stadium in Anaheim, located near Angels Stadium. Each facility would cost more then $800 million to build.

"My guess is that we will be going forward with those presentations on behalf of the Coliseum and Anaheim so that we can make some decisions in Denver," Tagliabue told The Los Angeles Times, referring to the league's spring meetings May 21 to 24.

Asked what those decisions would entail, Tagliabue said, "To select one of the stadium projects and to go forward with the process of identifying a team and building a stadium."

Tagliabue led the 11-member Los Angeles Stadium Working Group to California for a series of meetings in early May. The end result – the league announced they would invest $10 million in feasibility studies for both ($5 million for each) interested locations.

"I do believe the sooner we do it, the better," said the New England Patriots' owner, Robert K. Kraft, a member of the 11-member Los Angeles Stadium Working Group in a New York Times report a week before the NFL’s May meetings. "We all realize this is important for our future. In the end, we need to have a team there."

Steve Tisch, the Giants' chairman and executive vice president and a member of the Los Angeles working group, told The New York Times, "We think it is important to have a team in Los Angeles, but the conditions have to be right, the economics have to work, and the business community has to be strongly involved."

As for interest in Los Angeles, it was lukewarm at best, when the New York Times spoke to several Los Angeles based business people to gauge the level of interest.

"It's not a mandatory part of the culture here, like it is in other places where it's the dominant part of civic pride," said Kevin Roderick, a lifelong Angeleno and the editor of LAObserved, a Web site about life in Los Angeles. "You have an entire generation of kids growing up without football."

Of the new team, Roderick added: "They just better win. They better have a charismatic person on the team, a Kobe or Shaq or a Sandy Koufax, who can be the face of the team."

"It's like your wife left and 12 years later you say, 'I don't care,' " Jack McGrath, a Los Angeles based public relations executive told the New York Times. "We're getting along quite well without them. What are you going to do, keep crying? They left.

"But that gets rekindled again. If you know you have a stadium and you know you'll have a team, you'll start getting pretty excited."

Ten days later, the NFL moving at a snail’s pace had not ‘tabled’ any definitive plans to expand to Los Angeles. The owners met on May 23, 2006 and quickly realized putting a team back in Los Angeles was a political and economic minefield. A stadium had to be built. An expansion fee had to be paid. And whoever owned the team had to have the capital to operate the franchise. If you take a moment to consider all of the financial obligations the owner of an NFL franchise could be expected to secure, it easily tops $2 billion, an impossible financial number for anyone to seriously consider.

"The L.A. thing is hard to get your hands around," Dallas Cowboys owner Jerry Jones said in a Los Angeles Times report. "We don't have an owner. We don't have a team. We've got some leadership that we haven't had before. We've got a L.A. market that's better than it's been the last seven years. We got viability out there."

"Every constituent involved has to be willing to overdo here and be willing to have an area where you don't have the answers," Jones said. "That's why I use the example of buying the Cowboys. When I bought them, I did not have all the answers. I thought I had all the answers. I thought I had a way to keep from going broke, but I wasn't sure. I don't know an owner who has come into this league knowing he's is going to come into this league thinking he's going to make money owning a football team."

"We are looking at an investment of multiple hundreds of millions of dollars and a partnership that hopefully will extend over most of the next century. The emphasis is to do it right and do it thoroughly and not set deadlines that turn out to be meaningless," Tagliabue told The Orange County Register.

"We need to be a lot more reliant on something called value engineering, and to understand what are the best ways of monitoring stadium construction costs," Tagliabue said. "We've got to work really hard on the costs. There is not money to be wasted there. I think the committee and I emphasized to the membership that we have to be looking in the analysis of each of the new stadiums to be looking for two teams."

As The Washington Post suggested in a report two years ago, the NFL still does not understand how Californians feel about paying for sports facilities frequented by members of the Billionaire Boys Club.

Ever since state California Proposition 13 passed in 1978, changing how taxpayer money is spent, California cities have regularly rejected attempts to extract public funds for new stadiums. This is why three of what are widely considered to be the worst stadiums in the NFL are in San Diego, San Francisco and Oakland .

"It's impossible," said Bernard Parks, the city's former police chief who is now a City Council member representing the 8th District, which includes the Memorial Coliseum. "There is no stomach here to change and cave on public funds."

"The voters have made it clear they are very suspicious of how public officials spend their money," Parks said.

"I've never been involved in a deal like this," said Mark Ridley-Thomas, a member of the state assembly from Los Angeles who used to represent Parks' district and is a long time advocate of bringing football back to the Coliseum. "Periodically they create competition -- Carson one day and Pasadena the next. They tell us Carson is the first choice and then it's Pasadena, they're constantly moving the ball on us. They're always trying to leverage one venue against the next. There's something about Los Angeles that makes them drive up the price and that impedes the deal."

As successful as Paul Tagliabue was in nearly every facet of the NFL’s business affairs during his 17 years as NFL commissioner, it was under his watch that two NFL franchises left Los Angeles. Tagliabue put a great deal of effort into trying not once, not twice, but three times to bring the NFL back to Los Angeles before he retired. Unfortunately, he just could not make it work. That could have been the end of the story for Tagliabue, the NFL and Los Angeles but the story was not quite done.

In April 2008, Developer Edward P. Roski Jr., a part owner of the Kings and Lakers, proposed a stadium in the City of Industry, a proposal the NFL has never seriously considered, but one Roski has been talking about for two and a half years.

“Los Angeles Stadium is the project that will bring the NFL -- and the Super Bowl -- back to Southern California,'' said Roski when he made his 2008 announcement. “It is time to put the stadium debate behind us. We have a great stadium site that can serve the entire region, and we have the ability to get this done. This project is exciting, viable and in process.''

“We're aware of it and we will monitor developments,'' Greg Aiello, a spokesman for the NFL, said of Roski's plan.

The NFL.com’s Jason La Canfora, remarked in June that Industry remained very interested in the NFL dream.

The effort to put a team in the City of Industry -- about 25 miles east of L.A. -- remains ongoing and officials of Majestic Realty Co. contend they remain prepared to have a team in the L.A. area by 2011 (that depends on if there is football in 2011) and in their new facility by 2013. NFL insiders caution that in the current economic climate and with so much uncertainty regarding the CBA -- to say nothing of lingering questions regarding both efforts to bring a team to L.A. -- that timetable might prove to be overly ambitious.

"We've met with some owners and their lawyers and representatives at their place," John Semcken, vice president of Roski's company, Majestic Realty told NFL.com, "and some of them have come to us to see our presentation, and we've met some at a neutral location. The process is certainly moving along, and we've had some significant discussions.

"As soon as we get a team we can put a shovel in the ground," he said. "The upfront financing is already in place, and we could start construction while we wait for the final financing.

"We're meeting with teams, and we continue to move forward," Semcken said. "We are ahead of every other stadium project, including San Francisco's, in terms of design. We are ready to go. All we need is a team."

When Magic Johnson sold his shares in Starbucks and his minority interests in the Los Angeles Lakers last month, he suggested he would be very interested in being a part of any ownership group if the NFL returned to Los Angeles. The NFL’s fictional return to Los Angeles was an ongoing storyline throughout HBO’s Entourage latest season, but as an NFL source told NFL.com “I don't think moving to L.A. is on any team's fast track at this point,"

While Tagliabue did not succeed in his goal of seeing the NFL return to Los Angeles, by all appearances current NFL commissioner Roger Goodell has not made it a priority for himself. One has to believe it is inevitable Los Angeles will be home, in the not too distant future, to not one but two NFL teams. But remember this; USC and UCLA play between 10 and 12 homes games each year collectively offering great NCAA football for those interested. And without a team based in Los Angeles the NFL never has to worry about blackouts in the Los Angeles market (which is a growing concern).

At the end of the day it is easy to imagine Goodell will focus his efforts on NFL expansion and on the Los Angeles market once a new collective agreement is reached.

For SportsBusinessNews.com this is Howard Bloom. Sources cited and used in this Insider Report: NFL.com

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