Dan Morain

Dan Morain: Billboard sites part of Kings fallout

Dan Morain
Dan Morain

Darius Anderson is a businessman with many subsidiaries. That has led to conflict.

Anderson is a deal-maker who is in the middle of the campaign to persuade the National Basketball Association to prevent the Kings from moving to Seattle.

He is a developer who bought an ownership stake in Downtown Plaza last year. Although the mall has seen better days, it could become golden if the ownership group that includes Anderson's friend, former employer and mentor, billionaire Ron Burkle, gains control of the Kings and builds an arena on the site.

To help make that happen, Anderson took his place in New York last week alongside Burkle and the other rich people, politicians and consultants meeting with the NBA's owner-billionaires and executives.

Anderson, who was Gov. Gray Davis' chief fundraiser, also is managing partner of Platinum Advisors, which has been one of the top-billing lobbying operations in Sacramento since Davis' days as governor.

One of Platinum's clients had been Clear Channel, a Texas company that owns radio stations and generates significant revenue from the 1,000 electronic billboards it owns.

All that collided recently, resulting in a dispute that illustrates the lengths to which Sacramento is trying to hold onto the Kings, and the considerable value attached to electronic billboards.

Although they don't offend me, many people denounce flashing billboards as a blight. State and local politicians seek to regulate them, and extract donations from owners such as Clear Channel, which has given $1.7 million to California campaigns since 2002.

Critics sue to block them, and some highway safety experts believe they cause drivers to take their eyes off the road, which of course is the point.

They also are huge money-makers, as Clear Channel made clear in its latest annual report to investors. Because of its expanded use of electronic billboards, the company said, its billboard revenue rose by $26.5 million in 2012, accounting for 16 percent of the company's overall revenue increase.

Clear Channel covets three sites on Sacramento city-owned land along freeways. But to help make the Kings deal happen, Mayor Kevin Johnson and the city offered various sweeteners to the rich guys who want to buy the team including revenue from three billboards to be constructed on city property, plus three others at locations to be named later.

Clear Channel didn't react well, contending, in essence, that it had exclusive claim to the sites, a contention city officials dispute. The company also lashed out at Anderson by severing its relationship with him, though he had no hand in the billboard discussion, Assistant City Manager John Dangberg said.

In a letter to Sacramento City Attorney James Sanchez, Clear Channel contended that the company was "the successful bidder in connection with a Request for Proposal – Digital Billboards Multiple Sites issued by the city of Sacramento in 2009."

The company added that it had been "given the right to exclusively negotiate with the city the terms of the construction and leasing of multiple digital signs on city property."

However, the company noted that Sacramento's term sheet setting forth the Kings deal suggests that what it believed to be its locations were given over to the team's prospective new owners.

The city hasn't publicly valued any of the sweeteners, something it ought to do. But Clear Channel pays the city $180,000 per year for each of its four other electronic billboards. If that amounts to a third of the revenue they generate, a single flashing billboard produces $500,000 a year or more.

Since the city is offering the prospective ownership group six billboards, the value easily could exceed $3 million a year, sweet indeed.

Although Clear Channel leaves open the possibility of compromise, the company isn't making nice with Anderson. The company sent him a letter giving him a 60-day notice that his services no longer will be needed, according to consultant Doug Elmets, recently retained by Clear Channel consultant.

"Clear Channel has as much interest in keeping the Kings in Sacramento as anyone else," Elmets told me. "They feel like they've been thrown under the bus. It's unfortunate because the city loses this revenue share from these electronic billboards."

Clear Channel's relationship with Anderson goes back a decade. During that time, it paid Platinum Advisors $1 million in lobbying fees.

With Anderson as its lobbyist, Clear Channel persuaded then-Gov. Arnold Schwarzenegger in 2010 to support a plan to give it control over Caltrans digital signs, which provide traffic information and alerts for missing children.

As Schwarzenegger saw it, private billboard companies could upgrade the signs, offer road information and flash ads at motorists. In exchange, the state would receive $100 million a year. State senators, skeptical about the math, killed it.

No one should shed tears for Clear Channel, or for Anderson. Clear Channel will continue to expand its electronic billboard business, though perhaps not at the exact Sacramento locations it coveted.

Platinum Advisors will attract new clients to fill the Clear Channel void. If Sacramento holds onto the Kings – important to the city's economic future – Anderson no doubt will be able to get those new clients great seats at the new arena, thanks in part to flashing billboards.

Follow Dan Morain on Twitter @danielmorain.