When the St. Louis Rams relocated to Los Angeles earlier this month, the following thought came immediately to my mind:
That could have been the Indianapolis Colts.
Don’t laugh. In the early 2000’s, the Colts had a foot – maybe half-a-foot – out the door and were seriously contemplating a move to rich and robust Los Angeles. Just like so many franchises before them and so many franchises after them, the Colts had an eye focused on LA at a time when Indianapolis was feverishly attempting to un-do a terrible lease agreement with the team. It seemed to reach critical mass in 2002, when ESPN’s Chris Mortensen ran with a story that suggested the Colts were all but ready to make the move as negotiations with the city slogged along with no agreement in sight.
So when word came down recently that the Rams had relocated to the Los Angeles area, possibly with another team (the Raiders or Chargers) in tow, Fred Glass, the IU athletic director and the head of the Capital Improvement Board at the time of the negotiations, had a familiar feeling in the pit of his stomach.
“Oh yeah, I did,’’ Glass said recently. “Got that old feeling in my stomach because I was born and raised in Indianapolis and I remember 1984 when the Colts got here, I was at the Dome when (then-mayor Bill) Hudnut, David Frick and Bob Irsay walked in with their hands locked together. It was weird because I remember thinking, `Wow, now I can see the Chargers and Dan Fouts.’ Or as a lifelong Packers fan, I could see them. So this negotiation with the Colts was such a big deal to me. I felt such a huge civic responsibility to make sure we helped them stay. A lot of people were saying, `Ah, millionaire owners, millionaire players, a pox on their houses, let ‘em go, let’s show ‘em who’s boss,’ and that’s fine when you’re in the peanut gallery, but when you’re responsible for it, that’s something else. Because clearly, we wouldn’t have gotten another team.’’
Former mayor Bart Peterson, who now works as an executive at Lilly, was in office at the time the city and the team began renegotiating their way out of an onerous old agreement and working toward the construction of a new stadium. When the Rams relocated earlier this month, the first thing he thought was, “There goes the giant carrot and stick for NFL owners.’’
Peterson knew shortly after he took office in 2000 that the existing agreement between the city and the Colts had to change, and here’s why: Former Mayor Stephen Goldsmith executed an agreement whereby the city would cut a check to the Colts to make up the difference between the NFL’s median revenues and the Colts actual revenues. So let’s just use these random numbers as an example: If the median revenue was $100 million and the Colts, playing in the NFL’s smallest stadium, made $80 million, the city would have to cut a check for $20 million every couple of years.
A bad deal – a really bad deal – for the city.
And understand, the median revenues were going skyward with the construction of each new stadium, so the number would only climb north.
“When it hit, it looked like the first payment would be $15-20 million, so it was not insignificant, and we weren’t going to be buying anything for that,’’ Peterson said as he sat in a Lilly conference room. “We weren’t getting anything in return. And it was only going to go up. That’s why, when we fully learned about the terms, we looked at it as a stopgap agreement to bring the city and the team to a new negotiation. Those terms were very hard for the city to live up to. It would have bankrupted us. And even if we’d continued to make those payments, the Colts still could have left in 2013.’’
Peterson knew he could have kicked the can up the road and left the issues in the hands of his successor, but understood the closer the Colts came to franchise free agency, the more difficult a fair arrangement would have become. With a deadline looming, the Colts would have owned all the leverage. Which is why Peterson, Glass and their team went to work.
Here, though, is what made this negotiation so odd and thoroughly atypical:
In most cities, owners point a gun at the city’s head and say, “Build us a stadium or we’re gone to Los Angeles.’’ In Indianapolis, Irsay didn’t want a new stadium. He wanted to stick with the existing Goldsmith agreement. He wanted that financial guarantee. It was the city, then, who had to convince Irsay that a stadium-based deal would not only be best for the Colts, but would keep NCAA basketball in the city for years to come and would allow the city to expand the convention center – which was losing conventions because it wasn’t big enough.
“Almost everybody thought the Colts were pushing the city to build them a stadium,’’ Peterson said. “It was exactly the opposite.’’
During one of the many negotiating sessions, Irsay turned to Glass: “Fred, if you give me a turnkey state-of-the-art stadium fully paid for by somebody else, I’m not sure I would take it because I’m not sure this market could support an NFL franchise. I want it to be here, but I’m just not sure.’’
For more than a year, even close to a year and a half, heels were dug in. The city wanted the stadium. Irsay wanted the existing agreement that provided him with financial guarantees. And the stakes, well, they were as high as they could be. The city was not only at risk of losing the Colts, but they were at risk of losing an NFL franchise forever. The NFL commissioner at the time, Paul Tagliabue, made it abundantly clear to the city’s negotiating team that if Indy lost the Colts, Indy would never, ever get a team back.
“I’ll tell you something I’ve never told anybody,’’ Peterson said. “When I sat down with Tagliabue to talk about this, he gave me a little bit of history and said the NFL never wanted to see the Colts move to Indianapolis in the first place. It just happened at the time, Al Davis was suing the NFL and Tagliabue said they were distracted by that, and they didn’t feel like they were on firm ground denying the Colts the ability to move from Baltimore to Indianapolis. But he told me, there’s not a huge amount of support among the current owners to replace the Colts with another team or to try to block a move of the Colts someplace else. He was just telling us, this is the way the world is: The fact is, Indy doesn’t have a huge amount of support from the owners who were around at that time, we never wanted the team to leave Baltimore, so the league is unlikely to jump in and rescue you if you’re unable to work something out with Jim (Irsay).’’
Why would the owners be bullish on Indianapolis? Bob Irsay plopped the team down right in the middle of several other markets that would love to claim Indianapolis as their own. Surely, the Colts would be worth a lot more to the NFL in Los Angeles than they currently did in small-market Indianapolis.
For roughly a year and a half, both sides were dug in, and city negotiators wondered if Irsay would ever come around to accepting a stadium-based arrangement. In the meantime, the owner was said to be scouting options in Los Angeles, having parked his private jet at Van Nuys Airport for more than a week.
“Can I just say something because I don’t want you to leave without me saying this: Never once did Irsay say privately or publicly that he was thinking of or might move the team to LA,’’ Peterson said. “Not once. He never made an overt or implied threat to move the team. BUT…’’
He laughed.
“The `but’ is, we all knew LA was sitting out there.’’
And then came the game-changer: The city solicited stadium drawings from a number of architectural, stadium-building firms.
Irsay was floored. Once he could actually see the possibilities, once he could see what a new stadium might look like and what it might provide in terms of revenues, he began to soften on his stance. Soon, he began to see the situation the way the city saw it.
“Once he saw the building, and we were kind of hoping that would capture his imagination, everything changed at that point,’’ Glass said. “I think he could now visualize a stadium-based deal and then it was all about working out the economics.’’
That, too, was a long and difficult process. Where do you find the money, especially in a region where politics tend to run to a more conservative bent, where folks generally don’t like the idea of subsidizing billionaires and millionaires with their own dime?
Glass remembers that time whimsically, recalls a day when he was on playground duty at St. Thomas Aquinas and got hit by a kickball in the head because he was on the phone negotiating deals and wasn’t paying attention. Another time, he was going in for a colonoscopy, and was on the gurney, being rolled into the operating room, his phone affixed to his ear. “What the hell are you doing?’’ his doctor asked.
At this point, we won’t bore you with the specifics of the deal, the taxes that were used, how it all came together. That story has been told a thousand times. Suffice to say, the public paid for 86 percent of the stadium, one of the highest percentages among all new stadiums in all sports. Critics of the deal have had their say and continue to have their say, and their concerns then and now are not without merit. But once the deal was consummated between the city and the Colts, the big question was: How do we roll this thing out?
It happened at halftime during a December game in 2004, ironically against Baltimore.
“It was one of the greatest acts of political theater I could remember,’’ Glass said. “We walked out on the field with the NCAA, with our hotel guys, the city and Irsay and announced that we have a deal, then we showed a video of what the stadium would look like and set it to Mellencamp’s `Check It Out.’ Somebody wanted to use some techno European stuff for the music, but I said no, we’ve got to do something that says Hoosier.
“And the fans went crazy. I’ll never forget the reaction when the roof opened up on the video. Place went crazy again. We did that on purpose because we wanted to create a moment that the city had a deal, the Colts have a deal, and basically, if the Legislature doesn’t give us the approval to get it done, then they’re the ones who lost the Colts. There was a method to our madness.’’
Roughly 12 years later, Peterson has no regrets. He knows the city paid a heavy price to keep the Colts, but the city would have been forced to pay a heavier price to keep the Colts around until 2013, and then who knows what might have happened? The way they see it, the old deal gave the city all the risk. In the new deal, all the risk resides with Irsay.
“If we were to be a successful city, we would grow, we would generate the revenue necessary to pay for police services, firefighting, road paving, sewers, all the basics, and if we were a stagnant, declining Rust Belt failure we would not be able to pay for those things and we would go through that downward spiral that so many Rust Belt cities go through,’’ Peterson said. “And while keeping the Colts versus losing the Colts was not the sole determinant of our success or failure, I thought it was an important component of being a successful city. More than having the Colts, it’s the message that would have been sent if we had lost them. That’s what worried me.’’
Lucas Oil Stadium opened in 2008 to rave reviews. The NCAA plays tournament basketball here virtually every year. The convention center was expanded, creating space for existing and new conventions. And the Colts, they’re not going anywhere. It could have happened very differently. Indy could have been St. Louis, and that would have been a shame.