AEG Courts Farmers

Anschutz Entertainment Group is reportedly close to a naming rights deal with Farmers Insurance on a stadium that hasn’t been yet approved, to host an NFL team that Los Angeles hasn’t yet secured.

News of the unconfirmed agreement was first broken by Sports Illustrated. Stadium plan supporters told the Los Angeles Times that AEG was aiming for a 30-year deal starting at $20 million per year, not including annual increases.

No one’s talking for the record, but a naming rights deal in place would certainly sweeten any deal to build a stadium adjacent to the Staples Center in downtown Los Angeles. And it could help give a significant leg up on a rival plan, promoted by developer Ed Roski, in suburban City of Industry. But it still doesn’t signal a done deal, observers note.

“It adds some meat to the bones, but it does not solve any of the three threshold issues: securing the team, the environmental and land use issues, and the full financing of the stadium – though it helps for that,” Sportscorp Ltd. President Marc Ganis told the Times.

AEG is also believed to be seeking out “founding partners,” as is the case at many other sports venues including Staples Center, to sponsor elements of the stadium, the paper said. Farmers Insurance, should it strike the deal, would be a “naming rights partner.”

“I would suggest that this is a smart deal by Farmers,” Ganis told the Times. “Because if the stadium doesn’t happen, they can get a lot of free publicity without putting up any money. If the stadium does happen, they got it at a discount.”

In the meantime, the price tag for a downtown stadium seems to have gotten a markup. In another Times interview, AEG President/CEO Tim Leiweke said the stadium would now cost $1.5 billion, a 50 percent increase on the $1 billion figure he’s bandied about for some months now.

Leiweke continues to maintain that stadium construction will not take “a penny from taxpayers,” the Times quoted him saying. However, he reportedly wants the City of Los Angeles to float $350 million in bonds to help finance construction, to be repaid from revenues. And if they build it, but a team doesn’t come, Leiweke said that AEG would guarantee repayment.

But eyebrows continue to rise among L.A. municipal watchdogs. Another feature of the AEG proposal reportedly is to lease valuable downtown real estate for $1 per year.

And there’s some sharp criticism coming from the competition. John Semcken, a VP of developer Majestic Realty, continues to criticize the plan as unrealistic, expensive and inconvenient.

Semcken told the New York Times the AEG plan would cause traffic gridlock downtown, cost the taxpayers millions and lack suitable inexpensive parking.

“What’s the reaction going to be from a fan if some guy is waving them into a parking lot and says, ‘OK, that’s $50 to park, sir?’” Semcken told the NYT. “To get from downtown to our site – 25 miles – is faster than it’s going to take to get the three blocks from the highway exit to the convention center.”

Leiweke, never one to pull his punches, sharply dismissed the criticism.

“They lie,” Leiweke told the NYT. “They want to get into a war of words. They want to get into a smear campaign, and we’re not going to do it. Only desperate people say desperate things. The fact is that we will pay 100 percent of whatever the stadium costs.
“If ultimately they were so convinced that their site was the right site,” Leiweke added, “they would have had a team there and they would have built it, and they would spend less time throwing rocks at our site.”

Both sides will likely have plenty of time to stew on the plans; there almost certainly won’t be any movement on the part of the NFL or its teams rumored to be considering a move to L.A. until after the Super Bowl in February. A new labor contract has to be ironed out with the players’ union before that can happen. Still, the AEG team is working to fast-track approvals from the city and the NFL.

“We don’t want to drag this on forever,” Casey Wasserman, a partner in the AEG plan, told the NYT.