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L.A.'s Sports Business Gets Complicated

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| Library of Congress

Angeleños are getting a crash course in the business of big-time sports, but there will be a cost to all this education. Euphoria over the sale of the Dodgers to the Guggenheim Partners/Magic Johnson team barely masks the stick-up that Frank McCourt pulled: nearly a billion-dollar payday after having looted the franchise, and McCourt still keeps a 50 percent interest in the acres of parking around Dodger Stadium.

If the Guggenheim/Johnson deal -- at $2.15 billion dollars -- is to make any sense, those empty acres are going to have to fill up fast, and not just with the cars of returning fans.

Mixed-use development -- stacking parking, retail, and residential units in mid-rise buildings -- is one concept for mining the value out of the stadium's asphalt open space. Or Guggenheim/Johnson could add a football franchise to the Chavez Ravine site -- something Peter O'Malley had his eye on until the politics of development in Los Angeles soured him on the idea.

Or the Dodgers could move out of the ravine and a few miles south. The stadium itself is a relic with nowhere near the kind of ancillary revenue production that newer ballparks have. Conceivably, the Dodgers could leverage fan loyalty and city council eagerness to make a move both profitable and popular.

The ravine would then become the city's first skyscraper neighborhood.

All of these options are surely in play for the ascendant Dodgers, even as prospects for AEG's downtown stadium are beginning to dim.

In meetings with NFL Commissioner Roger Goodell, Mayor Villaraigosa, and Patriots owner Robert Kraft three months ago, Phil Anschutz of AEG outlined a deal that would give his company an unusual degree of control over the revenue streams that flow out of naming rights, suite renters, advertising, parking, and ticket sales. In effect, Anschutz's plan would combine partial ownership of a franchise with full ownership of the stadium, to be leased back to the team.

The league and team owners don't like that kind of hardball and suggested Anschutz might want to revise his deal points. Anschutz has yet to respond.

And now sale of the Dodgers has complicated the deal making even more. Anschutz had wanted to purchase only a minority stake in a franchise and at a discount price. Since the Dodger deal, NFL owners have to think that the "market rate" for a sports team in L.A. has gone far above AEG's initial offer. With Magic Johnson already in discussions with the NFL (along with Anschutz) and with Ed Roski's Irwindale stadium at least nominally in play, NFL officials are sure they can get a better deal from someone.

That has forced Mayor Villaraigosa into an awkward position. If he can't persuade Anschutz to come back with a deal that pleases the league owners, he looks like a patsy for believing the premises of AEG's failed play to sack the NFL. If the NFL cuts a franchise deal with Guggenheim/Johnson without the mayor, he looks even more like a hollow man. If no stadium is built and no team arrives, the mayor's political legacy will look even thinner than it does.

In the meantime, the opportunity costs of dancing to AEG's tune and chasing after the NFL have begun to rise. Major development projects proposed by USC, NBC, and Universal are stalled while city hall's attention has been distracted by football.

Tennis, anyone?

D. J. Waldie, author, historian, and as the New York Times said in 2007, "a gorgeous distiller of architectural and social history," writes about Los Angeles on KCET's SoCal Focus and 1st and Spring blogs.

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