Feb. 1 (Bloomberg) -- Farmers Insurance Group agreed to put its name on a proposed stadium designed to lure the National Football League back to Los Angeles.
The 30-year naming deal with Anschutz Entertainment Group, which plans to build a $1 billion downtown stadium, was announced today at a news conference in Los Angeles.
Financial terms weren’t disclosed. The Los Angeles Times, citing unidentified people familiar with the negotiations, said the deal may be worth $700 million, breaking the record $400 million New York-based Citigroup Inc. is paying for the right to call the New York Mets’ Major League Baseball stadium Citi Field for 20 years.
“This is about jobs, this is about revitalizing the city center,” Los Angeles Mayor Antonio Villaraigosa said at the news conference. “The idea that this city, the second-largest media market in the United States of America, does not have a football team boggles the mind. With this announcement today, it is clear -- football is coming back to Los Angeles.”
The stadium, proposed for a site next to the AEG-owned Staples Center, would be named Farmers Field.
The money will come from the Farmers Insurance Exchange, which is owned by policyholders and managed by Farmers Group, Inc., a unit of Switzerland-based Zurich Financial Services AG. AEG is a closely held company controlled by Denver billionaire Philip Anschutz.
Tim Leiweke, president and chief executive officer of AEG Worldwide in Los Angeles, said the 65,000-seat stadium with a retractable roof would be built on the site of the western hall of the Los Angeles Convention Center.
Leiweke said the stadium would create 25,000 jobs and called the naming-rights deal “the most significant step forward in the last 15 years in our efforts as a community to return the NFL to Los Angeles.”
“We will privatize the stadium, no hidden agendas,” Leiweke said. “It will be paid for completely privately, I promise.”
Leiweke, who wouldn’t comment on the financial terms of the deal, said in an interview that there would be a significant increase if AEG attracts two NFL teams to the proposed stadium. Paul Patsis, president of marketing management for Farmers, also wouldn’t comment on the terms of the naming-rights agreement.
In the news conference, Leiweke called the agreement “the largest naming rights since they named it Planet Earth.”
The news conference was attended by NFL Hall of Fame members Jim Brown, Mike Haynes and Deacon Jones. Haynes played for the Los Angeles Raiders from 1983-89 and Jones was a member of the Los Angeles Rams’ “Fearsome Foursome” defensive line from 1961-71. Also attending were NBA Hall of Fame player Jerry West and former boxing champion Oscar de la Hoya.
“We’re getting closer and closer to bringing football back to Los Angeles,” said Magic Johnson, a Hall of Fame guard for basketball’s Los Angeles Lakers who said in an interview that he will be an investor in the proposed stadium. “I used to have season tickets to the Raiders and the Rams, watching Marcus (Allen) and Eric Dickerson running the football, and I sure do miss Sundays going to those games.”
The AEG plan is one of two stadium proposals aimed at attracting an NFL team to Los Angeles for the first time since 1995, when the Raiders returned to Oakland and the Rams moved to St. Louis.
The competing plan, by Majestic Realty Co., is for an $800 million stadium in City of Industry, an industrial community of fewer than 1,000 people in eastern Los Angeles County about 27 miles from AEG’s downtown site. Proponents say its distance from downtown Los Angeles would allow for a 75,000-seat stadium without major traffic and parking problems.
“We firmly believe that our stadium proposal, which is modeled after the most successful stadiums in the league, is best suited for the NFL and the entire Southern California region,” John Semcken, vice president of Majestic Realty, said in an e-mailed statement.
NFL spokesman Brian McCarthy said in an e-mail that the league will “continue to monitor all stadium developments in the Los Angeles area.” NFL officials have said in recent months that any consideration of a Los Angeles stadium, or of a team moving there, would have to wait until after the league signs a new collective bargaining agreement with its players. The current agreement expires next month.
The site targeted by AEG is next to the home of the National Basketball Association’s Lakers and Clippers and National Hockey League’s Los Angeles Kings, and is a five-minute walk from the 54-story Ritz-Carlton, Los Angeles, that opened in April.
AEG’s proposed site also is across the street from a homeless encampment under the Harbor Freeway that dissects Los Angeles. Some churches and businesses in the surrounding blocks have iron bars on their windows and doors.
AEG and Majestic both say their stadiums would be built with private money. Los Angeles officials have made it clear there would be little, or no, public money available for stadium construction.
Los Angeles is the nation’s second-largest city with a population of 3.9 million. The population of Los Angeles County is about 9.9 million.
“It’s a PR battle and a momentum battle as well, and the deal they have in place is a meaningful step,” Cliff Kaplan, president of Van Wagner Sports and Entertainment, said in an interview. “I’ve never seen anything like this before.”