Commissioner Tagliabue: Good afternoon. Hopefully this is our last business meeting before we open training camps. I know a lot of you have questions about the salary cap and Barry Sanders and things like that, but let me turn to LA first. I think we had a good positive discussion and basically reached a conclusion along the following lines: that what’s been accomplished in the past month with Bill Chadwick provides a good structure for continuing negotiations and discussions about getting this project done within Exposition Park at the Coliseum site.

The two ownership groups that were represented here today, the Michael Ovitz-Burkle group and the Eli Broad and Ed Roski group, confirmed to us that they’re going to continue their pursuit of the franchise for Los Angeles within the framework that’s in the document that Bill Chadwick has been developing. On the specific aspects, the way we’re going to proceed is to keep working with Bill Chadwick and keep working with those ownership groups.

Jerry Richardson and Bob Kraft, as the co-chairmen of the Expansion Committee, are going to be confirming in a letter to Bill Chadwick three basic points. One is that they’re encouraged by the site development plan and the stadium plan that have been agreed to by the Los Angeles and California authorities. That’s a big thing we’ve accomplished in the last month. Secondly is that Los Angeles Coliseum representatives have an exclusive negotiation right with the league through September 15^th which was implicit in the decision we made back in April to negotiate exclusively relative to the Coliseum and not other locations in LA or elsewhere, and that’s to be reconfirmed explicitly. And the third thing is that those two committee co-chairs will strongly recommend to the membership that there be league financial support for a new Coliseum within the same terms as are being provided for teams in other top six markets under the resolution we adopted at our March meeting and applied to Denver and New England and Philadelphia at our May meeting.

I think in a nutshell, that’s where we came out. It was by far the healthiest and most detailed discussion we’ve had of these subjects. That’s one of the advantages of having a special meeting. You can really zero in on one subject. We started off early with about 45 minutes on the Internet, but we were really able to spend a real good intensive period of time on this LA situation.

PT: We’re still not there, so we still need to keep working. I think we’ve made a lot of progress, seeing how this can potentially get done.

PT: We’re going to go forward and work on the basis of the document as a framework and as a structure for continued discussions. We’ve been working on it intensively with Bill Chadwick and the ownership groups in LA since June, and we’re going to continue to work on that. But it’s a work in progress and the committee chairs will make those three points explicit, which are three of the main points in the document. Then we’ll continue with our discussions.

PT: Not on the entire document. There are things in there we’re in agreement with. There are things in there that we’re not in agreement with that need further negotiation and further improvement. With that thought in mind, we’re going to work on the basis of the document but we don’t see any need to execute it.

PT: There are a number of economic issues that still have to be improved in order for a team to operate successfully.

PT: I’m not going to get into specifics. It doesn’t provide a basis for doing the three things that have to be done. One is providing the proper infrastructure, which we’ve spent a lot of time on, and the proper stadium. Two is getting the expansion franchise. And three is operating a successful football team within the economics of the league under the television contracts and the salary caps. So, it’s the totality that has to be satisfied.

PT: I think so, especially in terms of the infrastructure, which would be critical, not just to the team, but would be a key asset for all of the development of Exposition Park and other events that would be in the Coliseum other than NFL games. That’s a key piece.

PT: We talked about that issue, especially in our committee last night, about the timing of selecting an owner. There were some people who felt that now, with the site development plan in place, with the stadium design concept in place, the stadium construction concept keyed up so that you could start costing the stadium construction and getting a definite contract for stadium construction, that we were now at the point where some people felt that we should be picking an ownership group. However, everyone recognized that we didn’t come here for that purpose. We didn’t come here with the background that’s necessary for that purpose. But I know that’s something that we’ll continue to work on.

PT: That’s one of the things that was under discussion. I think that what would be likely to happen if this process goes forward as I think it can, within the structure of this agreement that Bill Chadwick has developed, that by September 15^th we would have in front of us, both from the California authorities, the Los Angeles authorities, and from the ownership groups, a total package that would include how the site development plan is going to be done, how the stadium is going to be built, a lease for the use of the stadium for NFL games, a management agreement for the NFL team to operate the stadium complex, which is the way most other current deals are being structured, and then thirdly would be, in all likelihood, offers from the ownership groups as to what they would be prepared to pay for the franchise.

PT: I didn’t say I wanted anything. I said I think that’s the way it’s likely to work out.

PT: Yes, under the G-3 resolution that we adopted in March. That’s what we voted in the Denver, New England, Philadelphia support in the May meeting. It’s going to be case-by-case, but within the guidelines that we developed.

PT: Frankly, I was not a part of any discussion of that type during this meeting, so I haven’t had a chance to focus on that.

PT: That would certainly be their recommendation.

PT: I think that everybody has concern that we’re trying to get a lot done in a compressed period of time. But everyone is very much committed to the process and there is building momentum in the right direction, so we’ll keep working.

PT: Another key point that was emphasized was that the September 15^th date is a firm date. It needs to be respected and it will be respected by the league. That was an element that the membership approved in March, and it was understood by everybody in March that it was a well-thought-out date and that we need to stick with that date in fairness to all the parties both in California and in Houston.

PT: My current thinking is that we would have committee meetings in August and early September as needed, and that we would probably meet shortly after the 15^th, since there is no purpose in having a meeting until we get whatever we’re getting by the 15^th and digesting it. So, I would hope to have a meeting within a week of the 15^th of September. We also kick off the season on September 12^th, so hopefully we’ll see where we are as of the 15^th, and then probably have a league meeting after the teams have played their second regular season game.

PT: We have to be satisfied that we have commitments at hand that will go forward and be implemented, and will yield what people are telling us it’ll yield in Los Angeles. As a little analogy, in negotiating the Collective Bargaining Agreement, you reduce it to a term sheet or you reduce it to some type of binding letter of agreement, then you start playing the season even though it’s going to take you anywhere from two months to a year to negotiate the total agreement in all its glorious detail.

PT: I don’t think there’s a move to do that. Like I said before, when we get to the 15^th we could very well have offers on franchise fees and we could very well be addressing that in some joint way. But I don’t see it being done.

PT: No.

PT: I just said about 15 minutes ago that in all likelihood the way this process is going to work out is that it will have offers on a franchise fee. If they’re acceptable to us, then we’ve established a fee. If they’re not, then we’ll say what our fee is. I think that this effort of Bill Chadwick to structure the process has been very positive, and it gives us a clear framework for the first time to work toward binding commitments.

PT: We really didn’t discuss it that way. What we’re trying to do is to recognize something which has to be recognized. That undertaking to do this, within the Exposition Park footprint, has got some very positive aspects in terms of the investment that’s being made in Exposition Park, which Bill Chadwick reviewed, in terms of the Staples Center, down Figueroa in terms of everything else that’s happening in the Figueroa corridor. On the other hand, it presents you with some infrastructure challenges that are expensive to meet. Parking is obviously one of them. But the whole site development plan involves a considerable investment, and the point of that investment is that it serves a broad public purpose. It doesn’t just serve for 10 football games. It’s in conjunction with all of the other public investments that are being made in Exposition Park, and with the public and private investment that’s being made in the Figueroa corridor. There are some special challenges here.

PT: We think it is. We were heavily involved in those discussions, trying to evolve from where we were at the May meeting to where we are today. We think that the 20,400 that they’re talking about in the structured parking, coupled with good sites elsewhere in the area, particularly the USC campus, would be satisfactory, particularly since we’ve now settled on a concept of a stadium of about 62,500, expandable up to 80,000 for Super Bowls and other special events that would include major college football games and so on. So, we think that number is a good number.

PT: It depends on what kinds of bonds they are, and that’s one of the things that’s going to have to continue to be discussed. There are different kinds of bonds; there are different kinds of public financing concepts. It’s one of the things that has to be addressed.

PT: It was something that we were well prepared to do because the standard process and the standard commitments that we have on club borrowings covered this very situation. They’ve been meeting all of their obligations, not only in running the team, but under the loans, paying interest in principal. There were some technical problems with the loans in terms of the way the covenants were written. We did meet here yesterday with Art Modell and David Modell to get an update in terms of where they are with Alex Brown, and they’re planning on selling a minority interest in the team. I think that was a very positive meeting. Our people have been working very closely with David Modell through this whole process, and I’ve been talking to Art. We did meet yesterday here at the hotel.

PT: Basically it would be a year-type of arrangement. The Modell family’s intention is to move on this fairly quickly and to try and get something done in the way of a minority investor so they can get that behind them. Then they can focus on trying to put a team on the field with Brian Billick and everything else that seems to be positive.

PT: We don’t anticipate any snags.

PT: It’s contemplated by our loan documentation and we’ve viewed it as a thing that could be anticipated and dealt with quickly. That’s why we did not have to have a league meeting on it. We got a recommendation from myself as commissioner and from the Finance Committee and we got a net vote on it, so we moved on.

PT: We’ve been getting a lot of reports and we gave a lot of reports to the banks. We’re certainly going to be getting everything that they develop. They’re monitoring their own spending because of their desire to run a tight ship. They are continuing to give the lenders reports, and we’ll be getting those kinds of reports as well. The thing that we know going in is where a club stands in terms of projected revenue, and then the Management Council’s got a pretty good handle on how they’re likely to look on their salary cap spending. So their two biggest items we already know. Within that framework we have all the information that we need.

PT: I don’t see any at this point.

PT: I don’t think so. There are quite a few clubs that have minority owners. Some of the wholly owned clubs are the family owned clubs going back 39 years like Art Modell and the Rooney family and so on. I think that as we go forward we might anticipate seeing minority investors. The Bears have two minority investors outside the McCaskey family for the last decade, so I think this is the kind of phenomenon you can expect to see going forward.

PT: I don’t know anything about it except what some of you have told me in the corridor. You hate to see Barry Sanders retire when he can still be a great player, and you hate to see it for the Lions fans. I don’t know whether it’s a contract negotiation effort or some sort of package holdout, or if it’s a retirement. I saw Bill Ford last week in New York, and he made it clear to me then that they intended to have Barry signed for the 1999 season. I know he was here last night and that he left this morning to go back to Detroit to devote his attention to that. Hopefully he’ll be playing football in 1999.

PT: I would certainly think not. I don’t see why Barry Sanders is any different from everybody else under the cap, or why the Lions are any different from anybody under the cap, or some team that wants to trade for Barry Sanders. San Francisco and Dallas signed Deion Sanders at one point, and they had to make adjustments to the rest of their rosters to do it. Clubs are doing that every day of the week to deal with great players. That’s the system.

PT: N-O, no.

PT: No. Like I said, we were doing a media event together in New York last week, and at that time there were stories in the Washington Post that Dan Snyder was going to be able to trade for Barry Sanders. Bill just said that they were working on it and they expected to reach an agreement for the 1999 season with Barry Sanders. It was a routine comment at the time. I know he left here this morning to go back to work on it.

PT: No.

PT: No. I saw him last night but at that time there were no reports about any retirement.

PT: That’s fine if both clubs stay within the cap. If a high cap guy on Club A is under the cap, they can trade him for a high cap guy on Club B under the cap.

PT: All I know is that we had about 18 months of discussion of this with the union when Al Davis was on the Management Council Executive Committee and we came up with the rules that we came up with. It was supported by everybody at the time, so it’s probably a pretty good system.

PT: If he thinks he wants to move on with life, that’s his choice. If he thinks he’s frustrated and retiring prematurely, that’s unfortunate. I don’t know anything about it other than what most you people have told me.

PT: The question becomes "public contribution to what?" We feel clearly that the current levels of public money that are being discussed, which is really public bonding with a private payback, are not sufficient to enable the economics of the team to work. It wouldn’t work either for an owner or for the fans because you couldn’t field a competitive team.

PT: I have not been involved in a player contract negotiation since I’ve been commissioner, and I don’t intend to start in 1999.

Q: When did you meet with the Modells?

PT: We met with Art and David yesterday afternoon. We had two other people come with us, other than our staff. We had Bob Kraft as the current chairman of the Finance Committee and Tom Benson as the most recent chairman. Tom was the chairman of the Finance Committee when we recommended the current Ravens financing package. They were both coming in for the 5:00 p.m. meeting, but I asked them to come in a little earlier. We all thought it was a very positive meeting.

PT: That was at a breakfast meeting some weeks ago, which seems like it was some years ago. I told him that I thought he should continue to work within the expansion process exclusively through September 15^th. And I thought that he should spend some time with some owners he told me that he hadn’t had any time to visit with and that he should not, in any way, shape or form, before September 15^th, do anything along the lines of relocating a team.

PT: Yes.