Issa, Brown and California’s Stadium Problem
By Evan Weiner
November 10, 2010
(New York, N. Y.) --Sometime in January, perhaps Darrell Issa will find time in his busy schedule as a Congressman in Washington and start a recall campaign of the new California Governor Jerry Brown. Congressman Issa, a Republican from Southern California, probably will head up the House Committee on Oversight and Government Reform -- a fitting committee for someone who has had a couple of brushes with the law in the past -- and his plans are to call members of the Obama Administration to discuss all possible areas of corruption during the first two years of the Obama presidency.
Issa was one of the architects of the 2003 recall of California Governor Gray Davis. He contributed $1.6 million to get enough names on a petition that ultimately forced the recall of Davis and forced an election. The former body builder and actor Arnold Schwarzenegger won a special election in 2003 and California voters returned Schwarzenegger to Sacramento in 2006.
The Schwarzenegger years didn't exactly turn out well and the state is still grappling with massive debt. Jerry Brown now has to deal with California fiscal problems. Meanwhile Issa will probably go about calling people before his committee, wasting time and money in the process because that is what politicians do so well in Washington.
Brown's priority will be to get California back to fiscal solvency and more than likely that means that Ed Roski and AEG will not get that much help from the state in their attempts to build new football facilities in the City of Industry and Los Angeles. Brown's record as California governor from 1976 through 1982 is empty when it comes to the stadium game although Los Angeles Rams owner Carroll Rosenbloom took his team south to Anaheim and Raiders owner Al Davis also went south from Oakland to Los Angeles. As Oakland mayor between 1999 and 2007, Brown did little to help of two Oakland A's ownership groups who were looking for a publicly funded baseball park.
Brown was governor when Los Angeles landed the 1984 Summer Olympics but that was more Peter Ueberroth's baby and Ueberroth did not depend on the state to build facilities for the Games although the Coliseum did get a facelift.
Schwarzenegger was in favor of building a Los Angeles football stadium and had hoped to attract two franchises in that facility.
In sports, the National Football League has a California problem. The football facilities in San Francisco, Oakland and Sand Diego need to be replaced. The league has not had a team in the Los Angeles area since 1994. Georgia Frontiere moved her Anaheim-based Los Angeles Rams to St. Louis and Raiders owner Al Davis left the Los Angeles Memorial Coliseum for Oakland.
Davis might have remained in Los Angeles had the NFL not changed the terms of a deal that would have seen Davis moved his team from the Coliseum to a stadium in the parking lot of the Hollywood Park racetrack in Inglewood. The details of the broken down agreement have come out over the past 15 years although Los Angeles reporters never really report how the deal fell apart.
Davis and the NFL were going to put up money to erect the facility. Davis was promised that five Super Bowls would be played in the building over a 10 year period to help pay down the debt and his team was going to be the only franchise in the facility which meant that Davis would have been able to get lucrative revenue streams like luxury boxes and club seat sales. But the NFL started changing the details of the contract. The promise of five Super Bowls in the facility was gone; the NFL offered three in a ten year period, then one. Davis also found out that his team would share the facility with another NFL team one year after the stadium opened and while he would sell the luxury boxes and club seats, he would have to start sharing revenues with another franchise.
The proposed deal became untenable and Davis took an offer from Oakland and left Los Angeles in the spring of 1995.
The National Football League gave Los Angeles a conditional expansion franchise in 1999 but the state didn't have the money to build a facility on a toxic waste site in Carson and lost an opportunity to secure the team. Houston, whose voters approved a referendum to build a stadium after Bud Adams took his Houston Oilers to Nashville, ended up with the franchise.
Phil Anschutz's AEG eventually built a soccer stadium in the Carson area.
While Los Angeles business people like Roski and the Anschutz Entertainment Group scramble to get financing for a facility, the state of California is cutting back on sports. The University of California, Berkeley will drop five of its intercollegiate sports programs, baseball, men's and women's gymnastics, women's lacrosse and rugby at the end of the 2011 academic year with the hope of saving $4 million annually. Cal's athletic program has been losing more than $10 million annually over the past few years. Sports losses though a just part of California's large fiscal problems.
Roski is hoping to build his $ 800 million stadium along with a retail facility with private money. The project appears to be dormant at the moment. Roski's group claims that seven NFL franchises have been targeted as potential tenants in his stadium including Zygi Wilf's Minnesota Vikings, Ralph Wilson's Buffalo Bills, Wayne Weaver's Jacksonville Jaguars, the York family's San Francisco 49ers, Stan Kroenke's St. Louis Rams, the Spanos family’s San Diego Chargers and Davis' Oakland Raiders. Roski's $800 million price tag may be just a dream considering the cost of the new stadiums in East Rutherford, New Jersey and Arlington, Texas, the New Meadowlands Stadium and Cowboys Stadium cost well over a billion dollars.
The Spanos family has been seeking a new facility in San Diego since 2000 and could leave San Diego at any moment if someone had a new stadium ready somewhere else. That has not happened. Wilf's lease in Minnesota ends after 2011. Wilson's lease in Orchard Park expires in 2012. Jacksonville's business community has offered the Jaguars franchise lukewarm support partially because the Jacksonville business community is not very big. Davis' Oakland lease ends in 2013. Kroenke's St. Louis lease ends in 2014. The York family has an agreement to move to Santa Clara but no one knows when a stadium will be built there. Denise York's brother Eddie DeBartolo had an agreement to build a new San Francisco stadium in 1997 when he ran the 49ers. The facility was never built. DeBartolo lost control of the franchise and the York family is running things. The franchise remains in Candlestick Park.
AEG wants to build a football stadium near the arena-entertainment-hotel complex that the company has built in downtown Los Angeles.
Schwarzenegger, in October 2009, signed an environmental exemption bill that waived an environment study of the project. One of California's major obstacles in building stadiums has been environmental studies. One question that should be explored though, can California justify sports spending when the California education system is scaling back?
While business titans in the Los Angeles areas figure out a way to build an NFL facility, up the 101 freeway in Santa Clara is supposed to build a private-publicly funded stadium in that city after voters last June approved by referendum. But the project seemingly has been halted until NFL owners and the National Football League Players Association sign off on a new Collective Bargaining Agreement. Santa Clara has committed $444 million dollars to the stadium, the York family is supposed to provide the rest of the funding. Here is a question that should be asked. Do the Yorks have that money which might be more than $500 million to get the construction started?
Any delays in stadium building will hike the construction cost.
The NFL wants stadiums built in San Diego, Los Angeles, Santa Clara and Oakland. The National Basketball Association Commissioner David Stern allegedly is washing his hands of trying to build a new basketball arena in Sacramento for the Maloof brothers' Kings franchise after striking out repeated in the Sacramento arena game since 2006. Stern has put contraction on the table as a negotiating point in the NBA owners-players association on-going collective bargaining agreement talks. Stern's ploy gets the players attention as the association doesn't want to lose jobs and also puts cities like Sacramento on notice that they better play ball with him or the league will take the franchise away without a new arena.
Oakland A's owner Lewis Wolff has struck out in his attempts to get a new baseball stadium built in Oakland (Brown apparently didn't pursue that with any vigor while he was Oakland's mayor) and down the I-880 in Fremont. There may be a deal in the works for Wolff to move his A's to San Jose but Major League Baseball Commissioner Bud Selig's crack committee on the A's relocation to San Jose and how that might impact the San Francisco Giants franchise has still not reporting the results of the study.
San Francisco ownership may have territorial rights to San Jose despite the fact that two referendums to build stadiums in the South Bay failed and the distance between San Jose and San Francisco is considerably larger than the distance between the two ball parks in San Francisco and Oakland. The two baseball teams share the over-the-air and cable TV market where big money is made. Wolff is getting a San Jose stadium for his Major League Soccer franchise in the city.
Oakland is looking into building a football stadium that would host Davis' Raiders and perhaps the York family's 49ers if the Santa Clara option fails.
Issa may be too busy to start a Jerry Brown recall drive in January considering how many investigations he wants to start on the Hill. Brown may have other more important items on his desk than supporting a Los Angeles area stadium and National Football League Commissioner Roger Goodell may not care about getting stadiums built until the league gets an agreement with the players on a new collective bargaining deal and that may not be easy. The players association might disband and head to the National Labor Relations Board, a group that is friendlier to workers with a Democrat sitting in the White House, and that is a messy process that could take a while to settle down.
All of this means that it might be another five to eight years before the National Football League plays another game in Los Angeles or stadiums are built in Santa Clara or Oakland or San Diego. The California problem is not going away anytime soon.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at www.bickley.com or amazonkindle. He can be reached at email@example.com