Trump, page 50
Trump was also moving on another front: television. While he talked with executives at CBS and NBC, his focus was on ABC, the network that was already televising USFL games and had no NFL Sunday schedule. Even before Trump had been designated as the league’s TV negotiator in January, he had contacted Jim Spence, the ABC vice president who handled the USFL. He told Spence in their first conversation in December that he wanted the league to switch to the fall, and Spence seemed open-minded about the possibility of ABC televising a USFL fall schedule. Then, one afternoon in early 1984, Trump had what he claimed was the longest phone conversation of his life—four and a half hours—with Spence, who was encouraging again, at least as far as Donald later recalled it.
While in his initial conversation with Spence, Donald preferred a move to the fall by the 1985 season, he pushed the date back to 1986 during the second marathon session. Spence, whose network was dependent on the NFL giving it a glamour schedule of Monday night games matching the best teams for prime-time ratings, told Trump he was concerned about how the NFL might react if ABC signed a fall contract with the USFL. But he also acknowledged that all the network had on Sunday afternoons were cartoons, up against the most popular sporting events in human history. A USFL schedule did have a certain allure.
When Spence and Trump talked a third time a few days later, however, the ABC executive had changed course and emphatically declared that the network would not air the USFL in the fall. Donald later characterized the early conversations as “moderately positive” and the last as Spence “slamming the door in my face.” But he did not tell the league about the contacts nor did he reveal his even less encouraging approaches at NBC and CBS, all of which occurred in February and early March of 1984.
Nor did he mention to anyone at the USFL his strange rendezvous with Pete Rozelle. Rozelle, who had been running the NFL for twenty-four years when Donald called him in mid-March, was the most powerful man in American sport—which meant he was the kind of man Donald liked to imagine he had a relationship with, indeed liked to describe as a friend. In fact, other than brief conversations at parties, the two did not know each other.
Trump requested that they meet, and though Rozelle was busy preparing for the league’s annual gathering in Hawaii, he said he would be free late that day. Donald offered to rent a room in the Pierre Hotel for a 4:00 P.M. meeting and called back with a room number. Neither he nor Rozelle said what the subject of the meeting would be; both understood that it was dealmaking time.
Unbeknownst to Donald, however, the NFL had just sponsored a slide-show seminar for sixty-five league executives called “USFL vs. NFL,” put together by a Harvard Business School professor and commissioned by the NFL’s Management Council. The strategies outlined at the conference for putting the USFL out of business included forcing ABC to discontinue televising spring games by giving them a weak Monday schedule, as well as “co-opting the most powerful USFL owners with promises of NFL franchises.” Rozelle hadn’t attended the seminar and later claimed that when he heard what had happened there he “almost got physically ill.” In any event, the only man with the power to effectively dangle an NFL franchise was Rozelle, and the skillful old hand hardly needed Harvard to tell him how.
Both Rozelle and Trump would testify at the antitrust trial that took place two years later about this crucial meeting, and their accounts would differ substantially.* Donald claimed that Rozelle had promised him an NFL team sometime in the future—“whether it be the Generals or some other team”—if Trump would help keep the USFL in the spring and block an antitrust lawsuit. Trump insisted that he said “there is no way that I am going to sell out people,” and that he would only consider joining the NFL as part of a merger, with “four or five or six teams” coming in from the USFL (out of the eighteen then playing). Rozelle rejected a merger, according to Donald, adding that he “wasn’t interested in taking in more than one or two teams” and that he would explore that possibility and get back to Trump.
Rozelle’s version was a Trump shakedown. Trump opened the meeting, said Rozelle, with warnings that he was busily developing an antitrust suit and arranging for new ownership of two floundering USFL teams. “But I don’t want to do these things. I want an expansion team in New York in the NFL. I would play in Shea Stadium, and I would arrange for a new stadium to be built for that team in New York,” Trump explained. According to Rozelle, Trump then warned him that if the NFL did not agree right away to his demands, he would have to push forward on the lawsuit and ownership matters and would wind up too committed to the USFL to walk away and cut a separate deal.
In addition to seeking his own team, Trump offered to identify two or three other USFL owners Rozelle might reward with a franchise. When Rozelle expressed concerns about the antitrust implications of such a buyout of a competitor, Trump quipped that he’d sell the Generals to “some stiff” and wait a year or two for his NFL franchise, creating a smoke screen. Rozelle said that Trump concluded with the declaration: “If I were to leave the USFL, it would be psychologically devastating to the league.”
Despite the disparities between their stories, Rozelle and Trump agreed that Rozelle had made a commitment to respond to Trump on the question of a one- or two-team USFL deal, and that he did, several weeks later. Rozelle testified that he told Trump it could not be done; Trump remembered the call but claimed Rozelle said he and the league were still “mulling it over.”
By mid-April of 1984—a month after the Rozelle meeting—Donald was back to turning up the heat on the USFL, dropping press bombs on the spring schedule defender, “useless” Chet Simmons, pushing his fall agenda, and sending telexes to the owners demanding, for the first time, that the league file an antitrust suit. By the end of the season in June, the league had bottomed out, limping through disastrous ratings and horrendous losses. Franchises from Chicago to Los Angeles, especially those in the large TV markets with NFL teams, were collapsing. Citing “one owner” as a source, Sports Illustrated ran a story listing, franchise by franchise, $60 million in losses. Momentum was building for a move to the fall out of a desperate need for a quick fix; any change had begun to look appealing. In August, shortly before another owners’ showdown, Ted Taube, the letter-writing owner who had questioned Trump’s motives from the beginning, reversed field. “The central focus of all USFL strategies,” he now argued, “must be to bring about a merger or accommodation with the NFL. There is no other financially viable alternative.” The fall move would help create, he wrote, “the climate for merger.”
An expensive McKinsey management study Simmons had commissioned came in with a firm spring verdict, and ABC, now trying frantically to keep the league in the spring to avoid a confrontation with the NFL, offered a four-year, $175 million package, a 300 percent boost despite the vanishing teams and declining ratings. But Trump berated the study as “bullshit,” supported by his leading ally among the owners, Eddie Einhorn. Trump and Einhorn, who was also president of baseball’s Chicago White Sox, insisted that their talks with TV brass indicated that two unnamed networks (apparently ABC and CBS) would buy fall programming, a direct contradiction of the McKinsey findings (this assertion was actually contradicted later by Trump himself on the witness stand in the antitrust case, when he recounted his March 1984 conversation with Jim Spence). Trump closed the argument with his threat that if the league continued in the spring, it might find itself playing without him.
With owners charging one another with betrayal, Donald won the final vote handily, though he did not get a fall move until the 1986 season. Most of the owners agreed to pretend at the subsequent press conference that the seasonal switch was unanimous. They even prepared a press release that said the decision was based on the findings of the McKinsey study, a lie so outrageous that the consultant who wrote the study threatened to expose them if any reporter called her.
Donald’s triumph, however, was short-lived. In the succeeding months, the league shrank to only eight teams. Not a single one of its founders remained a majority owner. USFL teams fled virtually every NFL city—LA, Denver, Detroit, Pittsburgh, Houston, New Orleans, Washington, Chicago, and Philadelphia—unable to compete with the established league in the anticipated fall season of 1986. With the loss of all the major television markets except New York, the league’s ability to stick it out only in non-NFL cities, and the absence of any scheduled games from June of 1985 to September of 1986, Trump’s USFL became—shortly after the 1984 vote—little more than a litigant, kept alive solely by the promise of an antitrust suit.
The lawsuit became Donald’s next obsession—a supposed sure shot at hundreds of millions in damages or an NFL settlement. He sold it to the befuddled owners with precisely the opposite pitch from the one he’d used three months earlier to promote the fall switch. Since his promise of television support for a fall schedule had not materialized (indeed, ABC was considering imposing penalties on the league for breaking its spring contract), Donald now used the network’s refusal to give the league a fall contract as the primary evidence of a monopoly—a refusal, he predicted, that would lead to a court bonanza.
Donald’s lawyer, Roy Cohn, posing now as an antitrust expert, filed a federal complaint as early as October 1984. Trump announced the suit at a press conference in New York with Roy at his side; not one other USFL official was invited. With aggregate league losses jumping to $100 million, Donald forced the firing of Chet Simmons and replaced him with a new commissioner, Harry Usher, whose contract was a sure, though secret, indicator of the league’s last remaining strategy. Usher would receive a $1.2 million bonus if any USFL team merged with the NFL by 1990 and further payments for additional merger teams. As distressed as the league seemed to be to most observers, it was on precisely the track Donald had intended from the beginning—a direct confrontation with the NFL that just might lead to his own NFL franchise.
Donald’s outburst of antitrust activities in late 1984 was accompanied by a simultaneous surge of public pronouncements and private maneuvers on his other football front: the stadium. He tried to win a quick designation as New York’s stadium developer. If he ever had any doubts, he now understood that his Generals would only get to play in a stadium he built if the USFL won the lawsuit or if the NFL decided to bring him in out of the cold to avoid a trial. Otherwise, the league and the Generals would die.
Along with the rest of the Sportsplex board, Donald voted in October—just days before the antitrust suit was filed—to approve both a stadium project and the recommended Queens site. Though he voted in favor of the project, including the state’s preference for the cheaper open air stadium, Trump made a statement at the Sportsplex meeting noting that “the psychological and economic impact of a domed stadium would be very great for New York City, and a much more competitive stadium.” Mayor Koch quickly announced his own support of a domed stadium and objected to the Sportsplex financing mechanism—a bond sale that required the city to pick up 60 percent of the debt service costs.
A few weeks after the vote, Donald called UDC’s Stern and ran his own proposal past him for the first time. In this, and subsequent conversations in early December, Trump said he would build a $300 million stadium at no cost to the state or city and would finance it by selling most of the seats as if they were condominiums at an average price of between $4,000 and $5,000. The state and city, according to Trump’s plan, would pay only for site acquisition and preparation costs, including roadway and subway improvements. Trump also wanted a sales tax exemption on construction and a full abatement of all property taxes. In every significant detail, his proposal differed from the project he had just voted for—his 85,000-seat arena was 7,000 seats larger, domed, financed by fans, and to be built on either the Sportsplex site “or another appropriate location.”
Yet Stern liked the sound of most of it, especially the heavy private sector share of the costs. On December 12 Trump put the proposal in writing to Stern, and his letter made absolutely no reference to the New York Jets. “If we begin building this stadium,” he wrote, “it is my strong opinion that in addition to a USFL team (whose New York rights I own), an NFL team will commit sometime prior to the completion of construction.” This was one switch on the Sportsplex proposal that neither Stern nor Cuomo would accept: The first condition in a list of provisos adopted by the state was that the stadium would be built only if “a prior commitment is received for at least two major anchor tenants, one of which is an NFL team, capable of capacity crowds.”
The governor told the newspapers he was “kind of incredulous” about the plan. “I want to see it. It sounds wonderful, doesn’t it? ‘We’ll build you a free stadium’—pretty good.” Cuomo said he was concerned about its plausibility, and Stern quickly arranged a December 19 meeting between Trump and the governor at Cuomo’s World Trade Center office in Manhattan.
That morning Trump went to UDC, had coffee with Stern, and then drove him downtown to Cuomo’s office in his silver limousine. A chatty millionaire who’d made a fortune in computers and had never held a public post before, Stern had become quite chummy with Trump over the course of a half dozen Sportsplex meetings. Though he saw himself as a maverick reformer poised atop a bureaucracy corrupted by the Carey years, Stern had developed a temporary and out-of-character weakness for Donald. In late 1984, he saw Trump as a daring visionary of capital who could make this stadium happen. Donald’s genius at con, flattery, and hype, plus his deceptively inexpensive plan, had energized Stern. But Stern had also begun bickering with his longtime friend Cuomo over an array of issues and those disagreements had convinced him to leave the administration. He wanted the stadium as a legacy.
The meeting with Cuomo was stiff and businesslike. Donald outlined his plan, explaining little more than what was already on paper. Cuomo emphasized his desire to minimize the public investment in the project, but did not raise any questions about the level of general public access to what would principally be a condominium stadium. As soon as Trump left, Stern, who had remained behind with the governor, urged Cuomo to push ahead. He said Trump’s proposal would finally give the state something to offer Leon Hess. While the Jets had never been mentioned in the conversation with Trump, Stern saw Trump’s stadium and Hess’s team as the perfect match. He asked Cuomo if the governor could speak to Hess and float the Trump plan past him.
Though the governor promised to try to get word to Hess, Stern heard nothing further of it. He and Trump continued to refine details of the plan, and the dimensions of Donald’s stadium kept growing. A January 4, 1985, memo to the governor from Stern enlarged it to a 100,000-seat stadium, costing $400 million, with up to $90 million in public costs for acquisition and infrastructure. The extra 15,000 seats were Trump’s response to the city’s complaints—none had been made by the state—about the lack of public access. While Trump had announced this plan as a “no risk” project for the city and state (“the risk is mine,” he wrote the city), his proposal required both governments to advance a minimum of $24 million to acquire the site. If his condo seat sales proved disappointing, however, Trump could simply back out of the deal without any liability for the public expense already incurred.
Nonetheless, the revised plan received favorable notices from Koch and Cuomo officials in news stories. What sounded to most New Yorkers like a revolutionary proposal was in fact just one more borrowed idea, with Donald figuring out how to wring every last ounce of profit out of someone else’s concept. Joe Robbie, owner of the NFL’s Miami Dolphins, was at that very moment marketing 10,000 condo seats at prices of up to $1,500 to help finance the construction of a 72,000-seat stadium there. The sale of luxury boxes, with dozens of seats for corporate purchase, had been used to cover stadium costs around the country for years. Trump had taken the concept to another level, however, privatizing virtually an entire stadium. He even had the nerve to require millions in public expenditures and tax breaks to make his country-club stadium buildable.
Despite the exclusivity of the plan, and the absence of any real contacts with Hess, the state and city were by early 1985 on the verge of approving the Trump proposal. Donald looked as unstoppable on the stadium with the state as he’d proven to be on his fall schedule and antitrust tactics within the USFL. He had browbeaten his fellow owners into adopting his USFL game plan; now he would seduce the state officials who succeeded the resigning Stern into not only delivering its stadium designation to him, but into adopting the same take-on-the-NFL strategy as the USFL had. The immediate price of the state’s decision to effectively become Donald’s football partner was the waste of $2 million in consultant and staff expenditures on a stadium fantasy by the city and UDC. The long-range price was the scuttling of what appeared to be New York’s last real chance at an NFL franchise—Leon Hess’s window of opportunity—and the resulting loss of hundreds of millions in taxable revenue that would have accompanied the return of football.
In Bill Stern’s final days at UDC, he arranged a March 1985 lunch to introduce his successor, Vincent Tese, to Donald. It was an awkward lunch, with Tese enjoying Donald’s lighthearted shot at Stern over the skyrocketing convention center construction claims. The stadium was discussed, and Tese was noncommittal. Though Tese and Stern were virtually the only two millionaires close to Cuomo, they couldn’t have been less alike. Tese had made his money in the fast-track business of cable TV and gold and commodity trading, while Stern helped develop computerized performance measurement systems for 500 of the largest banks and insurance companies in the world. A cool, detached, mustached, trim, and elegant man of few words, Tese contrasted sharply with the short, cheeky, effusive, and always black-suited Stern. Tese immediately communicated a worldly sophistication; Stern was a rare bird and advertised it.
