1) The unmitigated financial backing of billionaire Phil Anschutz
2) State political support
3) The Chargers
At the moment, the financial support of AEG founder Anschutz for an L.A. Stadium is not yet a certainty, though AEG CEO Tim Leiweke has told two prominent California state politicians behind closed doors that his boss will fork over as much as $1 billion if they help facilitate AEG’s stadium deal for the city.
In a meeting with Speaker of the California Assembly John Perez, whose district happens to include where the proposed downtown stadium would be built, AEG Chief Leiweke told Perez three things:
1) His boss Phil Anschutz has $1 billion burning a hole in his pocket to build a Los Angeles downtown stadium
2) The stadium would represent Anschutz’s last significant investment in the L.A. market, so the city and state can take it or leave it
3) The stadium, which would also be part of a re-configured L.A. Convention Center, would be the only way for the city of Los Angeles to pay off the current convention center’s $500 million debt load. (L.A. pays $46 million in annual bond payments to service the debt on the dilapidated facility.)
In a separate meeting, Leiweke told California Senate President Darrell Steinberg the same thing.
So why is AEG L.A. Stadium front man Leiweke arm-twisting those particular politicians?
Along with newly-elected governor Jerry Brown, Perez and Steinberg will have considerable influence when it comes to obtaining the necessary environmental impact approval from the state legislature for the stadium construction.
Thanks to AEG’s Staples Center and the somewhat-wavering L.A. Live development, the latter spearheaded by Leiweke, the AEG CEO is already flush with local political capital. But Sacramento-based politicians could succeed in ensnaring his stadium proposal by ceding to a legion of pitchfork-wielding environmental groups.
Though L.A. city and county officials have already essentially rolled over to AEG’s demands in the stadium project proposal, the local citizenry is still largely in the dark about what sort of financial contribution the public will have to make towards what may ultimately be a multi-billion dollar endeavor.
Leiweke has made plain that AEG will privately pay all of the stadium construction costs - in exchange for a $300 million public subsidy - but where the funds will come from for what will be inevitable infrastructure upgrades around the facility is another story.
That question had still yet to seep into the people of Los Angeles when SI.com’s Peter King Tweeted last week about a possible naming rights deal for the AEG-proposed L.A. Stadium:
Farmers Insurance deal could be for $400m over 20 years at least. That’d be huge for future of football in Los Angeles.
After King’s Tweet, Don Muret of SPORTSBUSINESS JOURNAL subsequently reported on Twitter:
AEG says Peter King’s report on Farmers Insurance NR deal for LA Event Center is “way off base and inaccurate.”
Sam Farmer of the LOS ANGELES TIMES later reported that, “AEG was originally hoping for a 30-year deal starting at $20 million a year, with annual increases as part of the agreement. The current terms are not known, however.”
In a recent interview soon to be published in L.A. BUSINESS JOURNAL, I’ve been told Leiweke plans to cite the possible Farmers deal as a sign that the business climate is a favorable one for implementation of AEG’s downtown stadium proposal. If soothing a gunshy public and media with news of a pre-emptive lucrative naming rights deal wasn’t part of AEG’s public relations strategy for its stadium proposal, it should’ve been.
While $20 million per year would be a reasonable get for AEG, the news probably did not go over well with the Dallas Cowboys and New York Giants, whose stadiums remain unbranded as each team holds out for annual payments north of what Farmers is said to be considering for Los Angeles.
Also ironic when you consider that I was told today that Leiweke-led AEG, which early in 2010 was actually charged with soliciting naming rights bids for the competing Ed Roski-led NFL stadium project east of downtown Los Angeles, projected internally that those Roski stadium rights could crack the $1 billion barrier.
That Leiweke is pushing this hard without public assurance from an NFL team, let alone from his own boss, tells me two things:
1) Leiweke’s thinks the long term viability of his baby, the L.A. Live downtown development, is dependent on getting a downtown stadium and upgraded convention center done.
2) If he builds it, the Chargers will come.
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