USC May Be Spoiler in NFL Coliseum Plan
Michael A. Hiltzik
Los Angeles Times
Before the National Football League can take over the Los Angeles Memorial Coliseum in preparation for its return to the region, its most serious obstacle may well be USC's football program.
The collegiate powerhouse has made the Coliseum its home for 83 years. And since the departure of the Raiders in 1994, USC football has basked in its stature as the Coliseum's prime tenant â indeed, as the closest thing to professional football in town.
But the school's rent is capped at a level that was set before its football program's recent return to national prominence, and some critics say that favorable lease terms have been shortchanging the Coliseum.
A Times survey of stadium costs faced by other major universities has found that USC enjoys a marked financial advantage over other schools. What one Coliseum commissioner called USC's "sweet deal," and the university's efforts to extend it, may well entangle negotiations to bring the NFL back to Los Angeles.
A majority of the Coliseum Commission, the joint state-county-city body that manages the state-owned facility, now believes that the only way to finance a major upgrade of the aging stadium is to turn over the Coliseum to the NFL. The idea is to make the NFL its prime tenant, with key design and operational authority over the property. In return, the league would pledge as much as $800 million in private funds for a state-of-the-art refurbishment.
USC would become a subtenant of the NFL. However, the university has signaled its unhappiness with any deal that would give the NFL unqualified authority over the school's tenancy at the Coliseum, which currently seats 92,000.
Although USC might benefit from playing in a modern Coliseum renovated with NFL money, it arguably has much to lose from a return of pro football to the stadium. Foremost is its highly advantageous lease.
The current lease, which extends through the 2007 season, caps USC's rent per game at 8% of gross ticket revenue based on a maximum of 70,000 tickets sold. That has enabled USC to pocket nearly all the financial gain from a surge in attendance experienced from 2001 to 2005, during which its average home crowds rose nearly 60%, to 90,812 from 57,744.
Meanwhile, USC has dodged a major expense faced by schools with stadiums on campus â upkeep and renovation. Over the last five years, many of the school's gridiron rivals have launched upgrades for campus facilities at prices ranging from $80 million to $226 million.
The Coliseum hasn't had a major renovation since 1994, a seismic refurbishment largely financed by the federal government. Commission officials say renovations estimated at tens of millions of dollars, including the replacement of the scoreboards and all 92,000 seats, are badly overdue.
"They have kind of a sweet deal," says David Israel, a television producer who is the school's most outspoken critic on the commission. "They're a private tax-exempt program playing in a taxpayer-financed stadium."
USC argues that its record as the Coliseum's only permanent tenant since the stadium's opening in 1923 justifies special consideration. "Everyone else has come and gone," says Todd Dickey, USC's senior vice president for administration. "What would have happened to the place without us?"
The list of fugitive pro football tenants includes the Rams, Raiders and Chargers. UCLA, which had played in the Coliseum since its opening, moved to the Rose Bowl after the 1981 season in a disagreement over the commission's negotiations with the then-incoming Raiders.
Over the last 12 years, since the Raiders' later departure left Los Angeles without an NFL team, the league has played the Coliseum off against such other potential sites as the Rose Bowl, Anaheim and Carson. Last month, the NFL approved spending $10 million for design studies at the Coliseum and in Anaheim, which means the final choice of a location may not take place for months, if ever.
A delegation of NFL executives is scheduled to meet today with Los Angeles city officials and local business leaders to gauge the extent of community support for a team. The visitors will meet with Orange County business leaders Thursday to discuss the Anaheim option.
USC's discontent with the course of negotiations burst into the open May 22, when the university made public a letter from its president, Steven B. Sample, to the commission. Sample assailed a provision in a draft NFL lease that would require the league only to "attempt" to reach a mutually satisfactory sublease with the university.
"This language would leave USC totally vulnerable because the NFL could dispatch with its obligation in a single and inconclusive meeting with us," he wrote. He asked the commission not to sign a lease with the NFL until USC reached its own "acceptable" deal with the league.
He also sought assurances that the Coliseum would seat at least 80,000 for USC home games (NFL specifications call for about 68,000 seats for pro games), and that construction would not dislodge the school for more than two seasons.
"If no deal can be reached between USC and the NFL," he wrote, "USC could be forced out of the Coliseum forever, with our athletic program reduced to shambles."
Sample's letter, made public just before the NFL meeting at which the $10-million appropriation was approved, infuriated several commission members. "They wanted to interfere," Israel said. "They have a monopoly on football in L.A., and they think like capitalists and want to preserve their monopoly."
County Supervisor Yvonne B. Burke, the commission's president, responded to Sample late last week, writing him that the commission was "very disappointed in the tone as well as the timing" of his letter.
She said the Coliseum panel "would be more than happy to intervene" in the school's discussions with the NFL if USC requested but urged the university to "aggressively engage negotiations" on its own.
The school's ability to block or force changes in a proposed NFL lease is uncertain, but it does have several potential weapons: its local popularity, a large corps of influential alumni in Southern California business and politics, and 10,000 campus parking spaces â roughly half the total available in the Coliseum neighborhood â that are crucial for game-day crowds.
Although USC officials say they favor the NFL's return to the Coliseum, and NFL Commissioner Paul Tagliabue recently said he expects to have "a very strong partnership with USC" if the league returns to the stadium, supporters of an NFL deal may have to consider whether USC's concerns can be met without driving the NFL away.
Commissioners noted that in 2004, USC had insisted on conducting its own negotiations with the league. "They said, 'We don't trust you not to sell us out,' " City Councilman Bernard C. Parks, the commission vice president, recalled last week.
The university's new insistence that the commission help to protect its interests may reflect a recent change in local political opinion in favor of an NFL deal. In 2004, skepticism about the possibility of an NFL deal for the Coliseum ran high, not least because of the league's persistent flirtations with alternative sites.
But local political leaders now express a strong desire to please the pro league. An NFL-friendly redevelopment proposal sped through the Los Angeles City Council on May 19 with unanimous approval and no debate. The once-contentious Coliseum Commission is virtually united in its determination to clear away all obstacles to the NFL's return â raising some alarm at USC.
"As the NFL project has become more dominant in the body politic's mind, 'NFL über alles' has taken hold," says County Supervisor Zev Yaroslavsky, the university's only outspoken supporter on the commission. Yaroslavsky argues that USC's downtown presence has benefited not only the Coliseum, but the entire Exposition Park neighborhood.
"They deserve to be treated as a stakeholder. But they've been treated the way an unscrupulous landlord treats an elderly tenant," Yaroslavsky said.
Other commissioners say they have bent over backward to treat USC fairly. The commission agreed to extend USC's lease terms, last set in 2001, virtually without alteration for 2006 and 2007 even though the football program's surge in popularity has filled university coffers. The school's total athletic revenue, including alumni and booster donations, rose to $60.7 million in fiscal 2004-05 from $38.3 million in 2000-01, according to federal disclosure reports. Revenue attributed directly to the football program rose to $29.3 million from $21.5 million in that period and the excess of revenue over expenses widened to $12.5 million from $10.5 million. These figures are expected to show another sharp increase for the current fiscal year, which includes the 2005 football season.
Because very few major football schools play their home games in off-campus public stadiums, and fewer are private institutions as prominent and wealthy as USC, analogous arrangements elsewhere in the country are difficult to find.
A Times comparison found USC's lease is more generous to the school than UCLA's lease at the Rose Bowl or the University of Miami's at the Orange Bowl.
Last year, UCLA's home attendance at the Pasadena stadium averaged 64,217 and the school paid 8% of gross ticket sales. The lease fee is not subject to a cap. UCLA also pays 8% of all television revenue, turns over 40% to 60% of game-day advertising revenue and pays for its own ushers and ticket-takers.
Miami pays 10% of gross ticket sales, with no cap. The university keeps its television revenue and pays the city 15% of its advertising revenue.
By comparison, USC keeps all TV revenue as long as it exceeds a 70,000 ticket-per-game cap. The Trojan program also keeps all game-day ad revenue. USC splits the cost of ushers and ticket-takers with the Coliseum.
USC receives no income from food and beverage sales at the Coliseum, while UCLA receives half of all net game-day concession income from the Rose Bowl, but that's not enough to make up for UCLA's other expenses.
Experts familiar with both arrangements estimate USC might have paid 20% to 30% more in rent and revenue splits at the Coliseum last year if it were subject to UCLA's lease terms.
Among other private universities playing in public facilities, the University of Pittsburgh is a subtenant of the NFL's Steelers at Heinz Field. Tulane University plays at the state-owned Louisiana Superdome in New Orleans for a flat-rate rent established in 1975. Neither school would disclose further details.
It is likely that the terms of USC's lease will become stiffer, no matter how the NFL talks turn out. The commission's new 49-year lease of the Coliseum and adjacent Sports Arena from the state requires a renegotiation of its rent, currently $80,000 a year. The rent could rise to as much as $2.5 million under a contract formula.
Any increase of more than 10% would, in turn, trigger a reopening of USC's lease for 2007 in which all terms would be on the table.
"If there's no NFL deal going forward," Israel says, "it will be much more expensive for them to play in the Coliseum."
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rbowliowa's journal
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