July 26, 2010

Tales of city mismanagement: How the St. Louis Rams won their sweetheart lease

Tim Sullivan's column in Saturday's San Diego Union-Tribune was dedicated to an important but too-often overlooked topic: how city governments really need some professional help in negotiating stadium deals.

Writes Sullivan:

The one voice we most need to hear is dispassionate and discerning, tactical and tough, more measured than "whatever it takes," less defiant than "over my dead body," and carefully positioned in nobody's pocket. Someone able to joust with the National Football League across a quasi-level bargaining table.

At least one stadium expert agrees, telling Sullivan that "I think it's pretty clear looking back at history that city officials typically get rings run around them by teams," and adding by way of examples:

"That state-of-the-art clause the Rams have, they were just throwing stuff in there and they were amazed when St. Louis actually went for it. When Washington, D.C., was sitting down with the Major League Baseball Relocation committee, (the city) said they were thinking in terms of two-thirds public, one-third private (funding). (White Sox owner) Jerry Reinsdorf said, 'We were thinking more three-thirds, no-thirds.'"

Okay, in case you haven't figured it out yet, that's me that Sullivan is quoting. But while the three-thirds/no-thirds story has been reported here before, the bit about the Rams' surprise success at getting lease concessions from St. Louis comes from an interview I recently conducted with Jim Nagourney, a now-retired sports facility manager and consultant who was in the room when it happened.

Nagourney was working as an ad marketer for Anaheim Stadium, he explains, when he was hired away by the Rams as a consultant on their relocation plans. "I went to a meeting in Los Angeles one morning. We had a whiteboard, and we're putting stuff down [to demand from cities]. And some of the stuff, I said, 'Guys, some of this is crazy.' And John Shaw, who was president of the Rams at the time — brilliant, brilliant guy — said, 'They can always say no, let's ask for it.'"

The result, he says, was "probably the most scandalous deal in the country," one that notoriously included a clause requiring the team's new stadium to remain "state-of-the-art," or else the team could break its lease and leave. ("That was John," says Nagourney of the state-of-the-art clause.) "The city was poorly represented — the city is always poorly represented," says Nagourney. "And John Shaw was a brilliant negotiator. And we put in all of these ridiculous things, and the city didn't have the sense to say no to any of them."

The reason this dynamic happens, over and over, is simple, says Nagourney: "A city attorney is not going to know where the money really is. They're not going to understand advertising, they're not going to understand concessions — just a whole range of issues that the team officials intimately understand. They know where the dollars are, and the municipal attorneys do not." On top of that, he says, city officials get "stars in their eyes. It's their first time dealing with celebrities. They're just so enamored with the fact that 'I'm dealing with people who get their name on Page Six.'"

Add in perks like free luxury suites and the promise players showing up at political appearances, says Nagourney, and "they just lose all sense of proportion."

So, Sullivan is dead right that cities could use negotiating assistance in stadium deals. The problem is that the very reasons why they're lousy negotiators are the same ones keeping them from seeking help in the first place.