Post by TheShadow on Aug 7, 2005 12:20:26 GMT -5
www.insidebayarea.com
By Paul T. Rosynsky - STAFF WRITER
``In the final analysis, this is something we can present to the public, to the voting public, to the fans, to everyone as a win-win for the Raiders, for the county, for the city.''
- Oakland Mayor Elihu Harris, July 23, 1995
Euphoria engulfed Oakland 10 years ago.
Like the prodigal son, the beloved Raiders were returning to their birthplace.
A struggling city with an underdog reputation was reeling in one of the most fabled teams in professional sports.
Forget about the vacant downtown skyscrapers, the crack epidemic, the exodus of fed-up residents. The Raiders were coming back.
And their return wouldn't cost taxpayers a dime.
It was a major league coup for a town that so badly wants to be considered a major league city. ``Yesssssss!'' screamed the headline on the front page of the Oakland Tribune.
But almost as quickly as the wave of excitement washed upon the East Bay, it disappeared into a sea of confusion.
Just a month after Raiders owner Al Davis triumphantly signed the lease agreement guaranteeing the team would stay in Oakland for more than a decade, it became painfully clearer that taxpayers would have to foot the bill.
The extraordinary demand for Raiders tickets that Oakland, Alameda County and team officials predicted turned out to be more illusion than reality.
Personal Seat Licenses - the backbone of the city and county's plan to pay back $225 million in loans - ended up being vilified.
Accusations of fraud were tossed about. Fingers began pointing. Lawsuits were filed. ``This thing was like a tsunami,'' said Ezra Rapport, Oakland's former deputy city manager and lead negotiator of the deal. ``It was absolutely chaotic.''
Why the deal turned sour depends on whose version of events is told.
The Raiders blame the city and county; the city and county blame the Raiders.
Fans blame everyone.
And still, 10 years later, nothing has been done to fix the problems.
``Oakland is now on the threshold of greatness. If anyone out there doesn't think this is a great deal, hold me accountable. I'm ready to face the music.''
- former City Councilmember Nate Miley, July 23, 1995
Perhaps the most glaring mistake made by all sides in 1995 was overconfidence.
Overconfidence that excitement for the team's return would be so feverish fans would spend thousands of dollars just for the right to buy tickets.
Overconfidence that a marketing plan could be carried out in less than three months by only one sports marketing expert, who happened to be marketing lifetime PSLs for the St. Louis Rams.
Overconfidence that substantial improvements planned for the Coliseum and Arena as part of the package would fill all three professional teams using the complex with gratitude.
``The euphoria of having achieved a business deal that looked very, very doable created a euphoria that clouded over the fact that if sales fell short, we would have a problem,'' said Craig Kocian, Oakland's city manager when the deal was made. ``Looking back on it, it is fair to say that we did truly believe ... that the return of the Raiders would be a success and the stadium would sell out.''
Acknowledged current Oakland City Council President Ignacio De La Fuente, then a council member representing the Fruitvale District and now a mayoral candidate: ``Maybe we were too eager to make a deal.''
To understand the euphoria, one must first understand the pall that descended on Oakland in 1982 when Al Davis moved his team to Los Angeles.
The city was devastated. Its cherished Raiders, whose players could be found at local watering holes and shopping malls, were breaking up the relationship.
Davis wanted a new Coliseum with luxury boxes and club seats.
City and Coliseum officials offered a deal. Davis said it was too little too late.
After several years of posturing Davis finally made the move to Los Angeles. And city officials were furious.
They filed a lawsuit trying to use eminent domain to take control of the team. They lost - both the suit, and millions of dollars.
Fans were angry both at the Raiders and the city.
``When the Raiders actually left the first time ... the story starts at that point,'' said Alameda County Supervisor Nate Miley. ``A lot of people really felt that the Raiders should have never left, that the city should have done more to work with them. Everyone was kind of sad and disheartened.
``That was the first time (the Raiders) really kicked our butts,'' Miley added.
It was also the first time city, county and Coliseum officials vowed to themselves that they would do almost anything to either get the Raiders back or attract an expansion National Football League franchise.
They worked behind the scenes talking with football team owners, with NFL officials and with Davis. Seven years later, their chance came as Davis began complaining about the dearth of suites in Los Angeles.
Davis agreed, in March 1989, to play an exhibition game at the Oakland Coliseum. It took less than three hours to sell 41,000 tickets.
Within months, East Bay officials, led by then-Alameda County Supervisor Don Perata, put together a $602 million deal that guaranteed sellouts on the taxpayers' dime.
Perata did not return calls seeking comment for this story.
The City Council and Alameda County Board of Supervisors approved the deal in March 1990, Davis signed off, and Raiders fans began buying tickets at a rapid pace.
Euphoria reigned again. But, once again, it turned into sorrow.
The deal was killed about a month after it was approved when more than 30,000 residents signed a petition challenging the offer.
They said - and several polls supported their claim - that a majority of taxpayers were unwilling to use public dollars to guarantee sellouts for the Raiders.
A less-expensive deal was offered to the Raiders without the taxpayer -funded guarantees. Davis rejected it and decided to stay in Los Angeles.
``Any investment ... carries a certain amount of risk. That risk is minimal and the gains are maximum. This will serve us well in Oakland not just for football fans but for all of us.''
- Oakland City Councilmember Shelia Jordan, July 23, 1995
With the Raiders out of their grasp again, East Bay officials began to worry about losing two other professional franchises that played in the Coliseum Complex home.
While the Raiders were being shamelessly wooed, the Oakland Athletics and Golden State Warriors began grumbling about their leases and shortage of amenities in the complex's stadium and arena.
The Warriors threatened to move to either San Jose, which had just built a new arena for the National Hockey League San Jose Sharks, or San Francisco. The A's were threatening a move to Northern Virginia.
Knowing they could not get public support for a taxpayer-funded renovation, officials once again tried to convince Davis to return.
Without the Raiders, officials pondered, the city and county were in jeopardy of losing all the franchises playing in the Coliseum.
``We were going to be in the position of having a stadium complex with only tractor-pulls and Disney on Ice,'' Kocian said. ``It would have been another major slight to Oakland's stature as a major American city.''
So, a strategy was developed to the Raiders' return as a funding tool to revamp the entire complex. ``At the time, Oakland was losing everything,'' De La Fuente said. ``Raiders were the tool to remake these facilities.''
Davis was still unhappy in Los Angeles. The new suites and renovation of the Los Angeles Coliseum never materialized.
The then 66-year-old owner was shopping his team around. Baltimore was an option.
Local leaders jumped at the chance to court Davis again.
Using marketing studies completed during their 1989-90 effort, the then-privately run Coliseum board and city and county officials began showing Davis how he could get sellouts in Oakland.
Former Coliseum board member Ed DeSilva led the charge, personally contacting Davis and his then-partner, Jack Brooks.
Knowing taxpayer funds could not directly be used to finance a Raiders return, local leaders latched on to the personal seat license concept. It was a new idea in sports. Give fans bit ownership of the stadium, went the idea. For a high-priced fee - in the Raiders' case $250 to $4,000 - fans would ``own'' their seats for 10 years.
It was an investment that could be passed through family generations. One that would last a ``lifetime'' or, at least, as long as the team's lease with the stadium.
The PSL idea was hatched by Max Muhleman, a Charlotte-based sports marketing expert who successfully raised about $160 million from the sale of licenses for the Charlotte Panthers football expansion franchise. When Oakland embarked on its PSL quest, only three other teams had tried it.
``It looked like easy money to a lot of people after that,'' Muhleman said recently. ``The concept works when it is done right, the problem was it wasn't done right in Oakland.''
The difference between Oakland's PSL and others was that Oakland's had an expiration date. Even though the Raiders agreed to a 15-year lease, the PSL would only last 10 years, with a five-year renewal option.
``That is a real sin ... there is no doubt about that, the worst sin was making it limited,'' Muhleman said. ``What happens to the market ... it's insane, it is just crazy.''
The renewal was needed, officials argued, to ensure the city and county would have enough money later to spruce up the stadium and add funds to their coffers.
``It was a pretty big upside for the city and county,'' Kocian said. ``After 10 years, if the stadium was sold out ... the city and the county made a profit.''
Despite the uniqueness of Oakland's PSL, nobody thought twice about it.
The demand for tickets would be so great, officials insisted, that fans would pay almost anything to see the team.
``It was so intense, it was just an intense feeling that I never experienced,'' said Alameda County Supervisor Gail Steele. ``At the time, we were all feeling that there would be no problems.''
Added De La Fuente, ``I never heard lifetime PSL.''
The pitch was made to Davis.
The city and county would obtain a $225 million loan, of which roughly $85 million would go toward stadium renovation, $32 million would go to Davis as a sort of signing bonus, and $10 million would pay for construction of a practice facility in Alameda.
Seating capacity at the Coliseum would expand from 54,000 to 65,000, and 128 luxury suites would be built.
The city and county planned to pay off the loan through the sale of PSLs. Davis would get his money through the sale of season tickets.
On June 13, 1995, Davis signed a letter of intent signaling his interest in returning. And then the chaos began.
Within a month, PSL applications had to be printed, sent out to fans and returned before July 17, 1995, the date Coliseum officials set to begin a lottery.
An entire office for marketing tickets had to be created.
A lottery to determine who gets what seats had to be conducted.
Plans for the renovation of the stadium had to be made.
Tickets for two preseason games had to be sold.
Tickets for each regular season game had to be printed.
``People forget that the Raiders committed to come to Oakland in June and then in less than seven weeks they were going to have their first home (preseason) game,'' said Marc Ganis, hired to run the PSL marketing and later was fired. ``That was one of the biggest problems.''
Even before the deal was officially approved, fans were asked to spend from $62.50 to $1,000 per seat just to reserve their PSL.
A week before the City Council finally approved the deal, a lottery was run to determine who got what seats.
Local officials were jubilant.
So many applications were submitted that stadium sellouts seemed a sure thing.
Coliseum and Oakland Football Marketing Association officials sent out press releases, spoke at public meetings. Told newspaper reporters the stadium was sold out.
Advertisements ran in newspapers and the radio telling fans to apply for tickets or ``never get another chance to own Raiders season tickets.''
``The applications were counted up and there were about 45,000 applications with non-refundable deposits,'' Rapport said. ``That was a very positive sign ... there was every reason to think, `hey look, we got all these applications with 25 percent deposits.' Nine out of 10 people thought those seats would have sold out.''
A few days later, the City Council approved the deal.
``I basically summarized that if these applications are fully converted, then that would represent 85 percent of the PSLs sold,'' Rapport said.
``The deal allows us to renovate the Coliseum without us having to use taxpayer funds. If it doesn't work, all of our political futures are on the line."
- Oakland City Councilmember John Russo, July 23, 1995.
When the applications were opened, though, problems surfaced.
More than 10,000 were thrown out.
Some were duplicate applications, sent in by fans worried they would not get chosen in the lottery. Others were submitted with bad checks that bounced once Coliseum officials tried to cash them. And then more were rejected after their credit card companies failed to approve the transaction because of security concerns.
Fans and government officials panicked.
Davis was coming to town to OK the deal.
East Bay officials say they warned Davis of the situation.
Davis claims he had no idea the PSL marketing was in such shambles.
``We all sat in the room with the updated account, it said that some of that 45,000 had gone down,'' Rapport said.
Davis has said in court and in private that he was never told the extent of the problems. A week later more problems surfaced.
Many fans who submitted applications with 25 percent deposits refused to send in the second 25 percent deposit.
Frustrated fans flooded the phone lines at the Oakland Football Marketing Association demanding to know what was going on. They said they were duped, that some of their payments had been lost and that they received wrong seat assignments.
Government officials worried about the dearth of sales since the second 25 percent deposit was due. They began a new marketing campaign, fired Ganis and brought in Mulheman, the godfather of the PSL, in hopes of saving the sinking ship.
Muhleman quickly realized it was a lost cause.
``There is nothing worse than taking passionate fans who really care and disappoint them,'' Muhleman said.
Still, East Bay officials remained confident.
``We're totally confident that at least 90 percent - if not all - of the (licenses) will be sold, '' De La Fuente told the Oakland Tribune on Aug. 15, 1995.
Officials worried that if fans began to realize tickets were not sold out, demand for seats would decline dramatically.
``The whole idea was that if you sold it out, it would drive up demand,'' said former Mayor Harris. ``That is why there was all this information about everyone wanting a seat.''
But once the regular season began, fans became even more aware that seats were not limited. The plan was ruined. The lawsuits began.
First came the city and county, who sued the Raiders out of fear that the team was planning to break its lease and move again.
Then came the Raiders, who sued the city and the county, the Coliseum board and Ed DeSilva, claiming the team was defrauded. The Raiders said they were never told the true status of PSL sales.
In 2003, a Sacramento jury agreed and awarded Davis $34 million in damages.
That's a small expense compared to what county and city taxpayers have spent on the failed deal. According to Alameda County Controller Pat O'Connell, taxpayers have dished out $191.3 million to pay down the orginal loan and still owe $182.3 million.
Many who voted for the deal back then don't want to speak about it today.
And those who do say they probably would make the same decision today.
v ``To this day, I believe, even though it has been painful, it would have been worse if we did not sign the deal,'' De La Fuente said. ``We could have said `forget it, we are not going to do anything,' but then we would have lost all the teams.''
