Yesterday's L.A. TIMES reported on the newspaper's
controversial revenue sharing agreement with Staples Center
which resulted in a special issue of its Sunday Magazine in
October (see THE DAILY, 10/27). Yesterday's 14-page
investigative report written by the L.A. TIMES' David Shaw
included 11 chapters focusing on the circumstances behind
the deal. In reviewing the history of the agreement, Shaw
writes that the L.A. Times was already a promotion partner
of the Kings, but Staples Center President Tim Leiweke
"wanted more. He wanted The Times as a founding partner."
Leiweke: "The Times was spending probably ... as much as a
half-million dollars in cash and in-kind with the Kings and
the Forum." But founding partners were paying $2-3M per
year for five years, and Leiweke says it was "very clear"
that The Times wasn't willing to spend that amount. Talks
"stalled," but began again when Leiweke says, "We began to
change from saying, 'Here is the number that our founding
partners come in at,' and instead had conversations saying
... 'We're willing, in your particular case, to take a
portion of this in cash, a portion of this in trade and a
portion of this on ideas that we would create that would
generate revenue for us, and we'd take a risk on that and
apply it toward your fee as if it was a guarantee.'"
Although terms of the deal were not released, info from a
variety of sources said The Times agreed to pay Staples
Center about $1.6M a year for five years -- $800,000 of that
in cash, $500,000 in free advertising and an estimated
$300,000 in profits from what Leiweke called "ideas that we
would create that would generate revenue for us." Those
ideas led to joint revenue opportunities, which "ultimately
[led] to the special Staples Center issue" of the Times
Magazine and the controversy to follow (L.A. TIMES, 12/20).
The full story can be accessed at http://www.latimes.com.
TREATED FAIRLY IN THE ACCOUNT: Leiweke tells the DENVER
POST's Don Knox that he was represented fairly by Shaw: "I
thought he was diligent and fair and came in with an open
mind on the whole issue" (DENVER POST, 12/21).
