How Disney-Anaheim Deal Came Back From the Dead

Last Friday, six men stood around a conference table in Orange and decided the future of the California Angels.

It wasn’t Camp David, it was Chapman University. But President James Doti may well have been a latter-day Jimmy Carter, helping to break the impasse between Walt Disney Co. and the city of Anaheim.

Just two weeks before, the company’s Disney Sports Enterprises had publicly declared negotiations with city officials dead. Angel owner Jackie Autry was threatening to move the team.

Doti, an unbridled Orange County booster with a sunny disposition, had fired off letters to Disney Chairman Michael Eisner and Anaheim Mayor Tom Daly, expressing his disappointment that the company’s plan to renovate Anaheim Stadium and buy the “Anaheim Disney Angels� was falling apart. He offered his assistance.

The Chapman conference room down the hall from his office would be a haven, far from the media spotlight, where the two sides could make peace.

On that day, over 4 1/2 hours, the deal approved by the parties on Wednesday was essentially struck, one hour before the Dodgers took on the Angels in the opening game of the Freeway Series. Many of the participants headed out to the game afterward in a giddy mood.

Going into Friday’s meeting, Doti wasn’t sure whether an agreement could be reached or not. After the meeting, he was more confident. He offered congratulations to all.

“I didn’t have a toast per se,� he said. “But I told everyone if this truly came to pass, we could put a plaque in the conference room that would commemorate the cooperation of those willing to keep organized professional baseball in Orange County.�

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It was a far different scenario on March 14, the day after negotiations had been halted.

Disney and Anaheim, partners on many entertainment endeavors over the years, were fed up with one another over a deal that would clear the way for company to buy the Angels and commit the team to a long-term lease in a remodeled stadium.

Anaheim wanted a new football team to replace the departed Rams, as well as a new sports and entertainment complex near Anaheim Stadium to bring in money.

Disney cared little about either.

It wanted a vintage-style ballpark that would attract the same size crowds for Angel home games that teams in Cleveland, Baltimore and Texas were drawing.

Autry couldn’t believe that a sure thing had unraveled so quickly and she blamed Anaheim. With Disney agreeing to purchase a 25% stake and managing control of the team she owned with her aging husband, “Singing Cowboy� legend Gene, she had hoped to keep a hand in baseball while letting Disney handle the finances, marketing, renovations and other key issues to keep the Angels going into the next century.

For Anaheim to balk was unconscionable, she told Disney Sports Enterprises President Tony Tavares, who had paid her a personal visit the day after both sides announced that negotiations had broken down. At that meeting, Tavares had outlined all of Disney’s efforts to strike a deal, convincing Autry that the company had been more than generous.

“She said she felt like we had made so much progress that it seemed silly to call it off,� said Tavares, the key negotiator for the entertainment giant.

But Tavares was losing patience.

“In essence, both parties had reached a level of frustration where we stopped listening to what the other guy was saying,� Tavares said. “Sometimes things have to cool down before they can be resurrected again.�

To get the two sides back together, Autry enlisted the help of the American League, used to dealing with baseball ownership squabbles. Within days, Gene Budig, the league president, and his chief trouble-shooter, Bill Schweitzer, the league’s attorney, contacted Anaheim’s mayor and city manager. The league also phoned Tavares.

“I’d say within 48 hours of Disney walking, the American League president was on the phone with both parties, asking ‘What’s wrong?’ � Anaheim Mayor Tom Daly recalled.

By the following Tuesday, March 19, the Anaheim City Council was encouraged by the American League’s interest and authorized Daly and City Manager James D. Ruth to work with the league to come up with a solution.

Daly and Ruth spoke frequently with Schweitzer, a 51-year-old attorney from Baker and Hostetler, a Washington law firm that has represented the league since the World Series “Black Sox� scandal of 1919. Schweitzer had experience in dealing with ownership conflicts, and had worked closely with the Seattle Mariners, Detroit Tigers and Oakland A’s in recent years.

Major league baseball, always sensitive to threats that teams may move, listened intently to Jackie Autry and didn’t like the sounds of instability coming from Anaheim. Major league owners had approved the Disney purchase in January, and now were worried the agreement was unraveling fast.

And it wasn’t just any potential buyer vowing to walk away. It was Disney, which they believed would keep the Angels healthy and thriving for years to come.

“We believe in the future of this community and region and we have profound respect for the Disney organization, [which has] unprecedented expertise in the area of marketing,� Budig said Wednesday. “The Disney organization brings much to the table. It is an organization with creative ideas and major league baseball is open to new and different ideas.�

Over the past few weeks, league officials stressed the economic success of the intimate, old-time-style ballparks in Baltimore, Chicago, Cleveland and Texas--and the money it could generate for Anaheim by making Anaheim Stadium smaller and more inviting to fans.

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While Schweitzer was talking separately with Disney and Anaheim, Doti emerged as another mediator.

Doti urged both sides to work together on what he later calculated would be an $85-million annual boost to the county.

Disney and Anaheim initially balked at getting together, saying they were still too far apart. Finally, Daly and Ruth agreed to meet on March 26 with Doti and Schweitzer.

Ruth had just days before come up with a proposal that he thought would get the negotiations moving. Because the sports, retail and entertainment project called Sportstown was a major sticking point and threatened Disney’s plans to renovate the Big A, Ruth offered to let Disney build Sportstown. Tavares called him the following morning at home--a Saturday. Disney was not the least bit interested.

Anaheim was under pressure. Autry appeared serious about moving the Angels out of town, which would be an embarrassing encore to the Rams’ departure last year. City officials shuddered to think of the consequences.

“We were always concerned about that,� Ruth said. “We knew that if we lost the Angels, we wouldn’t get another team. And major league baseball told us that if she chose to move the team, they wouldn’t stop her.�

Against this backdrop, Ruth, Daly and Schweitzer took Doti up on his offer and they met at a Chapman conference room just down the hall from Doti’s office.

Around a table, over several hours, Anaheim talked out the remaining sticky issues: How would it recoup the $30 million it was putting into the project? How long would the term of the stadium lease be? Who gets the revenue from events held in the stadium parking lot? Anaheim was inching closer to a deal.

By last Friday, Disney and Anaheim would be meeting for the first time since the negotiations fell apart. Back in the conference center, with soft drinks, coffee and chocolate chip cookies at the ready, Doti hosted Daly, Ruth, Schweitzer, Tavares and Sandy Litvack, Disney’s chief of corporate operations.

For 4 1/2 hours Friday afternoon, they worked on the final details. Those inside said the proceedings were cordial, although the same old differences remained. When either party wanted to huddle privately, they used Doti’s personal office.

“It was, ‘Who had control over scheduling events [on the property]?’ and ‘How are the revenues going to be split?’ and ‘What about non-compete clauses?’ � Doti said. “It wasn’t that Disney was necessarily anti-football or anti-Sportstown, they were just interested in baseball and had legitimate concerns.�

By Friday night, everyone was optimistic that a deal was back on. Tavares, sitting in Autry’s owners box during an Angel game an hour after the Chapman meeting ended, broke the news to reporters that Disney and the city had resumed talks.

But there was one last hurdle: Anaheim made its final offer on Friday and waited over the weekend for Disney’s reply. Given the uncertain nature of the previous negotiations, nothing could be taken for granted.

Ruth said he and his wife, Linda, decided to go out and see the hit Robin Williams’ movie “The Birdcage� to relieve the anxiety of waiting to hear from Disney. As they walked out of an Anaheim theater, they came upon Tavares and his wife, Elizabeth, who had just seen the same movie.

“We were friendly and chatted, but we didn’t talk about the deal,� Ruth said.

The two couples then went their separate ways, only to end up at the same barbecue eatery for dinner. When they spotted each other once again, the couples dissolved into laughter.

“We couldn’t believe it,� Ruth said.

Disney agreed to the deal on Tuesday and resolved three major sticking points, Ruth said.

Both sides agreed to a 33-year lease, but Disney wanted the option to renew after 15 years. Anaheim wanted--and got--an agreement to renew after 20 years. Disney wanted all the parking lot bookings and revenue; Anaheim got Disney to agree to let the city hold 10 parking lot events a year over 25 days. The city also persuaded the company to change the team’s name to include the word “Anaheim.�

Disney didn’t want any fast-food restaurants within 500 feet of the stadium’s front gate. Disney ultimately agreed to reduce the radius to 250 feet, but was given 5% of gross revenue from fast-food sales on game days only. Those who choose to operate such establishments on the property must pay that portion of its revenue.

On Wednesday, all that was left was a vote by the Anaheim City Council to move the deal forward. Daly seemed so confident of approval that he told the audience that the council would be meeting in closed session no longer than 30 minutes, but probably would be out earlier.

After 85 minutes--following a point-by-point discussion of the details--the council emerged, though the vote had already been known for days. The agreement passed 3 to 2, with dissenters arguing that the city’s contribution of $30 million to the deal was too expensive. The session adjourned to a news conference, and two news releases--one from the city and one from Disney--filled with details about the agreement, had already been printed in advance.

Said Councilman Bob Zemel, who cast one of the two “no� votes: “It was like last week we were told we weren’t pregnant anymore and the next week we woke up with a baby.�

* BETWEEN THE LINES: Analysis finds Disney seems to have gotten best of the deal. B1