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SBJ/May 11 - 17, 1998/No Topic Name
Disney, Fox set to scrimmage
Published May 11, 1998
The ongoing battle between media giants Fox and Disney for control of the Los Angeles sports market apparently has spilled onto the football field.
A high-powered NFL delegation, led by Commissioner Paul Tagliabue, met last week with Walt Disney Co. CEO Michael Eisner and Fox Television Chairman Chase Carey, fueling speculation that one or both of the media conglomerates could submit bids to bring professional football back to Southern California.
Although Fox is focused on the Los Angeles Dodgers – and on minority stakes in the Lakers and NHL Kings, which it more recently acquired – "If the right football opportunity came along, [Fox] would be interested," said a source familiar with Fox Sports operations. "I know the NFL guys did meet with Chase Carey," the source said.
Vince Wladika, Fox Sports senior vice president of communications, would not confirm or deny whether Carey met with NFL group, or whether Carey met with the NFL group, or whether the company would be interested in owning an equity stake in any new Los Angeles football team. He acknowledged, however, that if the NFL were to award Los Angeles a team, it would increase the value of Fox’s properties.
"We would be ecstatic if it were an NFC team," Wladika said, referring to Fox’s contract to broadcast NFC games.
As for Eisner’s meeting with the NFL group, the Los Angeles Times reported that Eisner had expressed interest in owning a team and a preference for locating the franchise in Los Angeles – even though Disney’s baseball and hockey franchises, the Angels and Mighty Ducks, play in Orange County.
Eisner and Carey was not the only entertainment moguls NFL officials visited. The buzz in Los Angeles was that the NFL group was enamored with a plan by ex-Disney President Michael Ovitz to build a new stadium in Carson, Calif.
The group also was to meet a variety of politicians and business people who are proposing stadium projects in both Orange and Los Angeles counties, according to Jerry Richardson, owner of the Carolina Panthers and chairman of the NFL Stadium Committee.
After the league chooses an ownership group for Cleveland, who was recently awarded the 31st NFL franchise, it will turn its full attention to awarding a 32nd franchise, Richardson said. NFL officials have said they don’t want to operate for long with an odd number of teams.
Houston and Toronto groups are also working to secure an NFL team, but media and sports business experts said the league wants to be in Los Angeles, which has been without an NFL team since 1994.
"It’s not good for the league to have the second biggest media market in the county and the closest media market to Asia without a football team," said Rick Burton, director of the Warsaw Sports Marketing Center at the University of Oregon’s College of Business.
Burton said Disney, Fox and Ovitz are the "most logical candidates" to own a team, since they are best suited to take advantage of synergies between a team and entertainment and broadcast ventures. Ovtiz has reportedly put together an ownership group that includes Kevin Costner, Tom Cruise and Earvin "Magic" Johnson.
Fox and Disney, unlike other potential owners, have deep enough pockets to pay a franchise fee for a Lost Angles team, which is expected to top $400 million.
NFL rules currently prohibit corporate ownership of teams, but sports business experts said that could change, particularly if Fox or Disney, which owns ESPN and ABC, were involved. Both companies are partners with NFL in its $17.6 billion broadcast deal.
Neal Pilson, former president of CBS Sports and president of Pilson Communications, said he doubts either Fox or Disney would buy an NFL franchise.
"I don’t think that the NFl has much interest in selling a team to a network carrier," he said. "It’s pretty obvious that [existing NFL team owners] would not want to give a carrier a vote on matters relating to television."