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Magic Johnson talks about possibly owning an NFL team or the Dodgers

Mark Medina, LA Times
July 31, 2011 | 12:31 pm
Video: http://lakersblog.latimes.com/lakersblog/2011/07/magic-johnson-on-possibly-owning-an-nfl-team-or-the-dodgers.html


Magic Johnson's boisterous laugh and filibustering masked his interest in possibly purchasing the Dodgers: "If the Dodgers ever came up for sale, would I take a look at it with some other people? Of course you would look at it. The brand is so strong. But as we speak today, they do have an owner."

Johnson's smile and recollection as a Rams and Raiders season ticket holder when they played in L.A. revealed his outward interest in being part of AEG's ownership group should an NFL team return to the City of Angels: "Yes, because I'm such a big football fan."

In a one-on-one discussion Saturday at Loyola Marymount University with Times columnist Bill Plaschke, it became clear that Johnson's cemented legacy with Los Angeles will go beyond his storied Lakers career. It could be connected to Dodger blue, whom he recalled commanded more city and media attention than the Lakers did even during the Showtime Era. It could also be connected to a future NFL team in Los Angeles, with plans to build Farmers Field near L.A. Live possibly becoming a reality. As indicated by his various business ventures, ranging from movie theaters, Starbucks franchises and, most recently, with Detroit Venture Partners, Johnson's involvement with any either organization would bolster immediate credibility, with his previous business involvements adding substance to his already strong name in L.A.

It remains to be seen how events unfold.

The Dodgers have soon plummeted in Major League Baseball, as Frank McCourt's dragged-out divorce case exacerbates concerns on whether it has the resources to field a contending team, let alone making payroll. As soon as Johnson reminded everyone that McCourt still owns the Dodgers, everyone at the event Saturday at Loyola Marymount University booed, a sound that became even louder when Johnson reminded the crowd, "as we much as we might not like him, we do have an owner."

"It's never good to talk about an organization that already has an owner," Johnson said. "But I will say this, the Dodger brand is a amazing. What the O'Malley family used to do they were great owners."

Talk over an NFL team returning to Los Angeles had long been considered a pipe dream. But it's appeared to be more than wishful thinking, as AEG's Tim Lieweke will find out by the end of the month whether the L.A. City Council will issue roughly $300 million in bonds and approve the just-completed memorandum of understanding for a stadium deal. Johnson acknowledged being a part of L.A.'s future NFL team should it happen remains a bigger priority than purchasing the Dodgers.

"I am working hard with Tim Leiweke and AEG to bring football and the NFL back to our city," Johnson said. "I'm hoping that will happen. I would love to be a part of the ownership group with Tim. Right now, first we got to get the city council to vote to approve. If that happens, I will look to be a part of the ownership group."

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AEG football stadium could be win-win — if L.A. plays it smart

Michael Hiltzik, LA TIMES
July 31, 2011

Take it from me: If you attend a City Hall hearing on the proposed downtown pro football stadium/convention center project, you better be spry enough to keep out of the way of the stampede.

I refer to the stampede by downtown politicians, business groups and construction unions to drape the proposal with the label of that elusive municipal quarry, the "win-win." That was the case at a hearing last week of the Los Angeles City Council's ad hoc committee on the downtown project, which convened to consider the tentative memorandum of understanding, or MOU, negotiated by city officials with AEG, the operator of Staples Center and the L.A. Live entertainment complex.

AEG, which is owned by Denver billionaire Phil Anschutz, is the promoter of the project, which would be wedged next to Staples Center, L.A. Live and the existing convention center. AEG's president, Tim Leiweke, has displayed a deft touch for making urban commercial developments work. He's also a master salesman. Under his leadership, AEG has built up a reservoir of good will in the city, not least by spreading around millions in political contributions. At the public event where AEG unveiled its proposal in February, the slobbering by L.A. Mayor Antonio Villaraigosa and other politicos was so copious you needed scuba gear to breathe.

So it's perhaps encouraging to see that the city has refashioned AEG's original proposal to shift more financial risk off the taxpayers' shoulders and onto the company. The council even refused Leiweke's demand that it meet a spurious deadline of Monday to approve the tentative MOU, which in any case would still be subject to final revisions. The ad hoc committee will meet again this week, followed by another session of the full council a few days later, presumably for a vote.

AEG has put the council under the gun to approve the tentative MOU before it takes its summer recess in the next few weeks. The implicit threat is that any greater delay could put the deal in jeopardy. Yet nothing good can come of haste, and that sounds like a bluff. More to the point, there are still lots of questions about whether the taxpayers are as protected, and whether the project pencils out as neatly, as the promoters claim.

The supposed win-win is this: AEG would get to build, entirely with private funds, a $1.2-billion NFL football stadium, and Los Angeles would obtain an expanded and upgraded convention center. There would be thousands of jobs, although once construction is completed it's unclear what quality of jobs we're talking about. Minimum-wage ushers and concessionaires? Or better?

The taxpayers won't feel a thing, we're promised. AEG will make the deal pencil out by renting the stadium — on which it's already sold naming rights to Farmers Insurance — to the NFL team that will relocate here and by capturing revenues from other sporting and entertainment events.

AEG will demolish part of the convention center to make room for the stadium, and it will build a new convention center wing to connect to the stadium so the latter can also be turned into convention floor space. The city will float tax-exempt bonds to build the convention wing, and pay them off with new sales taxes and other revenue generated by new conventions and the stadium.

If revenue falls short of debt service, AEG guarantees to make up the difference.

So far, so good. But there are still numerous issues with the project that may not be getting the attention they deserve.

One is that the linchpin of the deal is the NFL, which must approve the relocation of a team to L.A. (Among the leading candidates: the San Diego Chargers.)

But as I've written many times, the NFL is the quintessential unreliable partner. The league has toyed condescendingly with Los Angeles for years. It hasn't yet publicly committed to playing at Farmers Field, though there are signs that it quietly favors the deal. The city's financial consultant, Texas-based Conventions, Sports & Leisure International, observes further that if the league imposes, say, a $500,000 relocation fee on the team's owner, that could raise costs enough to scuttle the deal economically. (Anschutz has indicated that he would want to own part of the L.A. team, but not a majority.) Any sizable upward revision of the cost of the stadium could also wreck the fine financial balance of the MOU.

Councilwoman Jan Perry, head of the ad hoc committee, insisted last week that the project would not "cost taxpayers a dime." That's only true on a "sorta" basis. The city bonds financing the new convention hall will be paid off from the rental and property tax payments AEG makes to the city for the land under the stadium, totaling $10.3 million a year to start, as well from parking taxes charged at city and AEG lots around the project (estimated at $715,000 a year).

That's just a portion of what the city hopes the project will generate, but it does show that a large piece of what the city expects to gain in additional revenues will just be cranked back into debt service. No one would expect to build a new convention center for free, but these revenues are, in a real sense, the taxpayers' "dimes."

As for the financial guarantee, the city's consultants are unhappy that the guarantor is AEG. If the project turns out to be a bust, AEG's bottom line could be the first casualty — possibly hindering its ability to cover losses. CSL says it's "imperative" that the guarantor be an entity with bigger pockets — Anschutz personally, perhaps?

All the financial projections, moreover, implicitly assume that when the bonds are paid off in 34 years, the city will have a lovely stadium and convention complex free and clear.

To the NFL, however, a 30-year-old stadium is a slum, no matter how fancy it was at birth. Convention centers have a shelf life almost as short — the downtown facility opened in 1971, was rehabbed twice in the 1990s and today, less than 20 years later, is a superannuated white elephant compared with its competitors. This raises the issue of who is to pay for the upgrades sure to be demanded by the NFL, AEG or other interested parties long before the new bonds are paid off. From what I could glean, the MOU's 111 pages, incorporating CSL's findings, are silent on the point.

CSL also expressed some misgivings about the value of an expanded convention facility. The firm found that even with additional state-of-the-art space, the number of major conventions — the mega-events that bring in out-of-towners to fill hotel rooms — might increase from an average 24 a year now all the way to 29. That's a lot fewer than the 38 projected by consultants hired by AEG.

As CSL observes, L.A.'s chief regional competitors (Anaheim, San Diego and San Francisco) are upgrading their own convention centers, so they're likely to maintain their competitive lead over L.A. Also, downtown Los Angeles offers only 1,685 hotel rooms within half a mile of the convention center. In Anaheim and San Diego, the figure is closer to 8,000. In San Francisco, it's 19,000. The marketing challenge for even a spiffy new L.A. convention center "should not be underestimated," the consultants wrote, understatedly.

If the city can really get a football stadium built entirely with private funds and upgrade the convention center with a reasonably modest investment, this deal could indeed be a win-win. But there are still plenty of points on which the city could be bamboozled or steamrollered. Would another month's delay to provide for careful scrutiny really be fatal? So far, the council has shown admirable spine in dealing with AEG. This would be the wrong time to convince itself that the road to a stadium has no more hidden potholes.

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Football: Lots of intrigue at City Section coaches' meeting

Eric Sondheimer, LA TIMES
July 30, 2011

A mandatory meeting of City Section football coaches was held Saturday morning at USC, and it produced lots of gossip, notes and intrigue.

The folks who run AEG were out en force trying to get coaches to sign forms in support of Farmers Field. I hope somebody was going to ask AEG CEO Tim Leiweke if he was going to guarantee that the City Section would be able to hold its championship games at the field with little cost. The Home Depot Center hasn't exactly welcomed schools with open arms and inexpensive leases since it was built.

There were vendors galore making presentations, from video people to LAPD folks. As for news, L.A. Jordan still hasn't hired a football coach, and practice begins on Monday. Will Burnett, an assistant, is the leading candidate.

Canoga Park has picked up a huge transfer in Edger Delgado, a linebacker who was the top defensive player in the Valley Mission League last season at Panorama.

Carson is still waiting to receive clearance from the City Section for quarterback Kevin McMahon, a transfer from South Torrance. Practice began on Monday, and McMahon isn't allowed to practice.

West Adams is being mentioned as a legitimate Coliseum League title contender, led by running back Michael Wimberly, who rushed for more than 100 yards seven times last season.

Garfield is excited about incoming freshman Cleo Session, a receiver and running back. New fields will be broken in at Carson, El Camino Real and Belmont.

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AEG exec OK with low return on LA stadium venture

JACOB ADELMAN, Associated Press
JULY 30, 2011

An official with the company that wants to build an NFL stadium in downtown Los Angeles Friday said the firm is willing to accept a modest return on its investment on the venue because it would boost the value of its nearby properties, an unusually frank acknowledgement of self-interest by a firm that has generally stressed only the project's civic value.

Anschutz Entertainment Group chief legal and development officer Ted Fikre said at a City Council meeting on the proposed 72,000-seat venue that the expected 6.7 percent return on its investment in the stadium is not the kind of yield that it would ordinarily expect from such a venture, but that the project could benefit its adjacent hotels, restaurants and other businesses.

"Candidly, that's part of the reason why we're willing to consider doing a project here that has a rate of return that no other standalone developer would consider doing in their right mind," Fikre said.

Officials with AEG, which also owns the Staples Center indoor arena and the 27-acre LA Live entertainment complex near the site of the proposed $1.2 billion football stadium, have made little mention of the firm's own financial interests as they seek city support for the plan, focusing instead on the jobs that would be created and new tax revenue that could be generated.

AEG president and CEO Tim Leiweke used his time at the podium Friday to recognize the labor union representatives who have been faithful supporters at council sessions and other public events on the project, which involves building a stadium on the city's publicly owned convention center property.

"What I want to do is thank all the unions and the working people here. We've got to get LA back to work," he said to raucous applause.

But Fikre's remarks later in the hearing hinted at what AEG itself could stand to gain beyond its apparent altruism.

"As people full well know, we have a lot of surrounding property that would benefit from this project," he said.

AEG owns up to 34 acres of undeveloped land in the immediate area that would rapidly increase in value if the stadium project comes to fruition, said Tony Morales, who specializes in downtown Los Angeles real estate as a managing director with the brokerage Jones Lang LaSalle.

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Athletes, fans urge council to move on football stadium

Miriam Hernandez, ABC 7
July 30, 2011

LOS ANGELES (KABC) -- A standing-room-only crowd packed Los Angeles City Hall Friday for a public hearing on a proposed football stadium in downtown L.A.

Former Lakers star Magic Johnson was one of the many speakers who urged the council to approve the stadium project.

For months, the L.A. City Council has been into the nitty-gritty, crunching the numbers and calculating costs as they negotiate a framework for a deal. Friday they got a jolt from fans.

Cheering crowds and champion athletes made City Hall sound more like a sports venue than a council meeting. Supporters of AEG's proposed stadium and convention center filled the chambers and the overflow rooms. Lakers legend and entrepreneur Earvin "Magic" Johnson gets the ball rolling.

"We have hosted everything from the Olympics to the World Cup," said Johnson. "I mean when you think about this city, it is the 'city of angels' for a reason."

It has been 15 years since the NFL left Los Angeles. High school football coaches added their voices to former Ram Vince Ferragamo's asking why.

"We have great weather, celebrities and a great fan base," said Ferragamo.

Labor unions sounded off even more: It is a $1.2-billion project that is expected to generate 2,600 temporary jobs and 6,300 new permanent jobs.

"We got to get L.A. back to work," said Tim Leiweke, president of AEG, to roars of approval from the crowd.

Yet city leaders have been wary about exposing taxpayers to any risk. It appears now that negotiations have solved that.

"We reduced the overall amount that the city is on the hook for," said the city's chief administrative officer, Miguel Santana.

"The most important thing to remember is that the stadium has zero taxpayer money in it," said L.A. City Council President Eric Garcetti. "The stadium has zero taxpayer money. There's only been one other stadium ever built with zero taxpayer money. So that's a huge win right there for Los Angeles."

There are critics, including neighbors of the potential downtown project.

"We have had problems with traffic, robberies, car robberies, parking situations, since the Staples Center has opened up," said Pico-Union resident Jane Scott.

But naysayers were the minority Friday.

"We need jobs in this community," said Magic Johnson.

Discussions continue. The city council hopes to have a tentative memorandum of understanding by August 19, and there are many more hurdles to go over after that, including issues of traffic impact and neighborhood impact.

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NFL Stadium Hearing at L.A. City Hall Draws Hundreds of Football, AEG Lovers; Answers Few Questions

Simone Wilson, LA Weekly
July 30, 2011

When LA Weekly reporter David Futch showed up at L.A. City Hall this morning for a hearing on Anschutz Entertainment Group's proposed L.A. football stadium, he thought he was in for just another L.A. City Council meeting.

What Futch failed to realize is that, when one attends a meeting on the NFL coming to L.A., one is in fact enlisting oneself in the freaking American Revolution, round two.

"This is the second biggest media market in the country, and we don't have a professional football team. How un-American is that?'' the Venice High football coach said at the meeting. "Some people say baseball is America's pastime. I beg to differ.''

(Careful, man. You know how those Dodgers fans can get.)

Cue breathtaking mock-ups of AEG's plans for the $1.2 billion stadium -- with a giant red Farmers Insurance logo running across the top, for helicopter tourists to fawn over -- and dozens of testimonies from sports nuts, construction workers and businesspeople on how a home for the NFL in the City of Angels would truly make it heaven on Earth.

Futch says that of over 50 cards turned in for public comment, only two speakers opposed the stadium. (Illegal immigrants or terrorists, obviously.)

With the hall at full capacity, 200 to 300 more interested parties couldn't fit -- spilling out onto the sidewalk and into two makeshift overflow areas where the meeting was being broadcast.

Not even the president of Farmers Insurance could get into the room, says Yusef Robb, a member of L.A. City Council President Eric Garcetti's staff. (Though we're sure that was quickly taken care of.)

Today's hearing was vetted as the very first consideration of AEG's plan -- but of course, as plans go in L.A. City Hall, this one has been shaped behind closed doors for months. Today was just the fireworks show for hopeful high-schoolers in jerseys.

Hence the mayor's impeccably timed announcement, on Monday, that L.A. was about to reach a memorandum of understanding with AEG, just as the NFL ended its lockout. Convenient!

Another curious obstacle that Weekly reporter Futch encountered at the meeting: In order to get onto the council floor as media, he had to have an LAPD press pass.

Though Garcetti's staffer claims media have always needed an LAPD pass to enter the councilmembers' quarters -- it's just not often a necessity, as the public chambers aren't usually filled to capacity -- we find this fact ridiculous, and must take a moment to vent.

LAPD passes are issued only to crime reporters; on each personalized application, a journalist must either prove he's on the police beat or, essentially, lie about it, or the application will be denied. For a political writer to need to prove he's buddy-buddy with the LAPD in order to avoid dickish police hassling at a purely political meeting is childish, and reminiscent of Los Angeles' overly protective, V.I.P. approach to press regulations. Like the LAPD can somehow prevent the next Loughner by screening every journalist that comes within 15 feet of a precious local politician.

OK, we're done. More important question, re: AEG Stadium. Who's paying for all this, again?

Farmers has reportedly agreed to pitch in $700 million of the $1.2 billion total, and another $275 million in bonds will be issued to AEG by the city, to be repaid with stadium profits.

But Futch noted at the meeting that City Councilmembers have no idea what the surrounding infrastructure -- roads, on-ramps, etc. -- is going to cost, and won't know until October or November.

Councilmembers kept reassuring the crowd, and each other, that AEG is going to have to "pay its share." But that language is worrisome -- implying there's some other share involved. Likewise, AEG honcho Tim Leiweke has reassured us, time and time again, that not one cent of taxpayer money will go toward the stadium. He's even promised bonus tax revenues and economic perks for downtown L.A.

"This project brings hope to the city in a time that the city needs hope," said Magic Johnson at today's hearing. (Yes, that Magic Johnson.) "And the main thing it's going to be bringing is jobs." (Yes, he sounds every bit like he's getting paid for this.)

Veteran citywatchers are more than skeptical. Via ex-LA Daily News editor Ron Kaye:

Harder to get around is the problem of how often NFL stadiums are a financial disaster for local government, as the Wall Street Journal reported today and increasingly frequent questions asked even by the gadflies about what is in this deal for the city, direct benefits that will end the bleeding of city services and punishment of city workers.

But this is the developer's stadium, and the L.A. City Council's meeting space -- we're just sitting in it. Or standing outside it, as the case may be.

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