Trump Political Football
January 14, 1992
The venture that made Donald Trump a national figure wasn’t a real estate or casino project. While his own later self-promotion successfully depicted him as a magical master of the deal, it was his three-year dalliance with football — a game he loved to watch and hated to lose — that initially thrust him onto the national stage.
With George Steinbrenner only a few miles away in the Bronx, Donald understood that the moneymen behind sports attract more publicity bang for their bucks than any other venture capitalists in America, and part of his genius was to use the exposure that a puny investment in football gave him to catapult into the consciousness of the country. Football became Donald’s way of achieving his ultimate objective — the mass marketing of the Trump name. His first national newsmagazine profile was in Sports Illustrated, not Business Week or Time. The lead of the first Sunday New York Times Magazine paean to him was his dominance at a 1984 football forum. His first major interview on national television was not with Barbara Walters, but on one of the Sunday pregame shows.
Donald began looking for a football team to buy before he could afford one, talking to one National Football League owner as early as 1981. He was simultaneously exploring his prospects with the United States Football League, the new, fragile federation of 18 underfinanced teams fighting for a foothold in America’s most lucrative sport. From the beginning, he seemed to vacillate between the two, attempting to use the threat of joining the USFL — which was still a year away from its first season and still putting franchises together — as leverage with the behemoth NFL. The difference in price between the two options was astronomical — a USFL franchise might need a few million in start-up funds, while NFL franchises were selling for at least 10 times that. Donald’s solution was to figure out how to buy an NFL franchise at a USFL price.
In 1981, Donald began wining and dining Baltimore Colts owner Robert Irsay, and the talks continued on and off into 1983, but the two couldn’t agree on a price. Irsay and his counsel, Mike Chernoff, would later claim that in the course of their discussions Donald had tried a daring pressure tactic, suggesting that he would buy a USFL franchise and force his way into the NFL if Irsay didn’t sell him the Colts. Chernoff claimed that Donald told him privately he would “see to it that it was worthwhile” for Chernoff if the lawyer would persuade Irsay to agree to the sale. (Donald would coolly deny these charges under oath years later, saying only that it would not “be my place to say that.”)
After the first unsuccessful run at Irsay went nowhere in 1981, Donald had backed away from the NFL and made a $25,000 down payment to the USFL to obtain the New York franchise, but he did not make the second payment when it came due in 1982. According to Donald, he decided not to follow through on the purchase after talking with NFL commissioner Pete Rozelle about the plusses and minuses of going with the USFL — a peculiar selection of an adviser on the issue. Rozelle, he claimed, predicted doom for the league. Donald, on the other hand, was tempted by the notion that combining a daring, new football league with a telegenic and glib young owner might be just the right recipe for the instant media attention that would advance his other business interests, even if the league failed. Despite this hunch, he decided, at least temporarily, to take a pass on it and keep his options open with the NFL. An Oklahoma oilman, J. Walter Duncan, took on the USFL team in New York, the Generals.
Since playing in Shea or Yankee Stadium in the spring — the designated season for the USFL — created a scheduling conflict with baseball, the Generals had followed the NFL Giants to the nearby New Jersey Meadowlands. But, aside from snatching Georgia running back Herschel Walker from the college ranks, the franchise’s first season was both a football and financial disaster, winning six games, losing 12, and racking up a $2 million deficit. Duncan was ready to sell, and any buyer was in an excellent position to dictate the terms.
Donald made one last attempt at Irsay and Rozelle in early 1983, but could not force the Colts price down. One other NFL development also pushed Donald toward the USFL — Leon Hess, the sixty-nine-year-old oilman who owned the New York Jets, made it publicly clear that he was seriously considering a move to the Meadowlands as well. That might eventually open the door for Donald’s Generals to become the only New York football team — if the scheduling difficulties could be resolved.
Since the Jets’ twenty-year lease at Shea ended on January 1, 1984, Hess had written the mayor a year ahead of time, advising him that the team was entertaining proposals for a stadium lease and would select a future site based on a review of the city’s submission and “others” — an unmistakable reference to Jersey. Hess had been dissatisfied for years with Shea, a stadium built for baseball, with terrible sight lines for football and a scanty 60,000 seating capacity. The best Ed Koch could offer to mollify him were vague renovation promises that added only 10,000 seats and ninety-eight luxury boxes. After Hess received the city’s final proposal, his protracted silence was widely interpreted as a bad omen.
With Hess’s departure appearing more and more likely, Donald opened talks with Duncan to buy the Generals. On September 1, 1983, Trump signed a nonbinding purchase agreement with Duncan in which he agreed to pay up to $5.3 million for the team over a period of six years. On September 22, with the word out that the Jets were going to Jersey, Trump announced his purchase of the Generals at a press conference, though the transaction hadn’t actually closed. Six days later, Koch declared an impasse and announced the departure of the Jets. On October 6, Hess’s agreement with the Meadowlands was made public. On October 18, Trump and Duncan finalized their deal, with Donald making a $1.2 million initial payment and signing promissory notes of $683,333 for each of the next six years, to be paid to Duncan so long as the Generals and the USFL survived. Donald personally guaranteed the payments.
The terms of the Duncan contract carried a blueprint of Donald’s grand plan for the league. The document anticipated a “merger or absorption of part or all of the USFL into any other league” and even the possibility that Donald or the Generals might receive a “consideration” for arranging such a merger. The only “other league” was the NFL. Instead of paying $70 million or more for an NFL franchise, as a near USFL owner did for the NFL’s San Diego team in 1984, Trump believed from the outset that he could invest a stretched-out $5 million for a USFL team, take a few years of losses, and then force his way into the big league, either by cutting a deal with Rozelle, forcing a merger of the two leagues, or winning an antitrust lawsuit.
But Donald did not plan to own the third-string NFL franchise in Jersey. Hess had agreed to a twenty-five-year lease in the Meadowlands, while the Generals had only a year-to-year lease at the facility. With the Jets out of New York, Donald saw himself as the future owner of the only football franchise in the center of the largest media market in the world. He not only envisioned owning New York’s team, he pictured himself as the builder and owner of the city’s first football stadium. Trump understood what only a handful of others did at that time — that, with the advent of luxury boxes and leased seats, the real money to be made in football was not in a team, but in a stadium. As Donald saw it, his New York Generals would play in the Trumpdome — a facility that would manufacture money and be usable for the Olympics, major concerts, the NCAA’s Final Four, and a bonanza of other possible events.
Reaching this dual goal required a careful strategy. First, Donald had to steer the USFL into playing a fall schedule. He was convinced that spring football would forever be second-rate football, with second-rate revenues. No one would invest hundreds of millions of public or private dollars to build a stadium for a team that played football when Donald, and much of the rest of the most lucrative television market, was out on a golf course. If the league moved to the fall, theorized Donald, it would either get a new network contract, replacing its $50 million ABC deal with a far bigger television bonanza that would position the USFL to compete effectively with the NFL. Or it would be passed over by the networks — in which case the USFL would have a viable antitrust suit against the NFL-network monopoly. In either event, Trump believed, Pete Rozelle and the NFL would be forced to the merger table, and if any USFL teams made it into the powerhouse league, Donald’s would be certain to be one of them.
Second, Donald had to secure a New York stadium for his team. The short-term option was Shea. So, unnoticed by the local media, new language was suddenly, and somewhat mysteriously, added to the Mets’ new lease at Shea, permitting the fall use of the stadium by a USFL franchise.
But Donald’s long-term objective was to position himself with top state and city officials so that he would be able to push the concept forward and then take over the development of any stadium project. By the time Leon Hess formally announced his departure, the city and state had already actively begun to consider the construction of a new stadium. Hess had expressly sent that message — i.e., the necessity of one — as both an ultimatum and an invitation.
Hess hated leaving New York almost as much as he hated the thought of remaining at Shea. So when he declared his intention to move to New Jersey, he wrote Koch an open public letter, promising to return to New York in five years if a new stadium — a football stadium — was built. He concretized his intention to return by putting up a $10 million bond with the Meadowlands, which he would forfeit if he opted out of his lease there. He built a window of opportunity into the Meadowlands lease, giving New York until February of 1986, twenty-seven months in the future, to come up with “all necessary permits, detailed plans, authorizations, approvals and financing” for a stadium. If New York complied, Leon Hess, who considered his reputation as a man of his word a stodgy asset, “pledged to return.”
The Hess window of opportunity made it imperative that Donald insinuate himself inside any New York stadium planning process so he could direct it in ways that maximized his own — rather than Hess’s — interests. As foreboding as a possible Jet return might be for his ultimate strategy, Donald recognized that the promise of it was a mixed blessing. The lure of a possible Jet return provided the impetus for public investment in a new stadium. The widely publicized Hess letter compelled some sort of concrete response from new governor Mario Cuomo, who’d succeeded Carey at the start of 1983, and from Koch, who was so angered by the Jets’ departure that he wrote Hess a letter threatening “an aggressive effort to negotiate with teams from the new leagues.” (For more on Donald Trump’s relationship with Mario Cuomo, click here.)
Hess’s pledge had in effect created the stadium opportunity that Donald planned to expropriate, but bringing the Jets back was the government’s initial motive, never his own. Trump might have been willing to accept the Jets as a secondary tenant at his stadium, but it is the primary tenant in a football facility that reaps its greatest financial benefits. For example, the Mara family, owner of the Giants, was given control over seventy-two luxury boxes when the team became the first, and primary, tenant in the Meadowlands. At $40,000 apiece, the Maras collect $2.8 million a year that they don’t have to share with the visiting team or with anyone else. As a secondary tenant, Leon Hess receives nothing. The Maras controlled those boxes, even for Hess’s games. But the only way the Giant monopoly on luxury boxes could become an incentive for Hess to move to the Trumpdome was if he, not Donald, got a similar prime tenant package.
Donald, however, wanted prime tenancy for his Generals and, while he might be forced by circumstances to live with the Jets and share the facility, he never, over the course of the two-year stadium discussions, did anything to try to entice them. His objective was his own stadium for his own team.
These dual goals were mutually reinforcing. His NFL strategy had to succeed for his stadium strategy to succeed — meaning that he had to get the Generals into the NFL to get the city and state to go ahead with the stadium. Clearly, New York was unlikely to back the construction of a stadium for a struggling franchise in a struggling league. So even before he closed his deal with Duncan, he went public with a blast at the NFL, urging a USFL switch to a fall season in a September 30 New York Times story, the same day the Jets’ departure dominated the sports pages. Within two or three years, he said, the USFL would reach parity with the NFL and could “perhaps go head-to-head” with it. Adding that some USFL teams could already beat NFL teams, he said he was “talking to large numbers of people” and that “more NFL players” would be “coming over to the USFL.” It was the first time a USFL owner had openly talked about abandoning the spring concept and inducing NFL players to join the new league.
USFL Commissioner Chet Simmons was left with the responsibility of countering Donald’s brash statements, noting that “for the moment we are concentrating on building the league in its present format” and that the USFL “would be foolish to challenge an organization as well established as the NFL.” He branded Trump “an active young guy who is doing a lot of thinking, some of it off the cuff.” Little did Simmons realize that his newest owner had just announced what would — within eleven months — prove to be precisely the timetable and strategy adopted by the league.
A few weeks later, Trump went to Houston for the annual meeting of the league’s owners. Addressing his colleagues for the first time, Trump announced that he hadn’t joined the USFL to become a “minor league” player, and immediately launched his campaign for a switch to the fall, insisting that the TV dollars were there. The owners, who had cautiously carved out this spring niche for themselves, weren’t ready to accept his proposals, but they did vote to put this challenging new owner on their executive committee.
Donald next took the dramatic step of signing a string of first-rate players — Kansas City All-Pro free safety Gary Barbaro, Seattle cornerback Kerry Justin, and Cleveland quarterback Brian Sipe, the NFL’s most valuable player only three years earlier. On December 20, 1983, Donald announced the hiring of former Jet head coach Walt Michaels, a mortal enemy of Leon Hess. By the beginning of 1984 Donald had recruited six active starters from a variety of NFL teams, making a bigger splash than anyone in the USFL had in the league’s first two years of existence. Part of the league’s economic plan had been to keep salaries low, minimize superstar acquisitions, and slowly build a league. Donald was not about to be patient.
At the end of December, Ted Taube, one of the USFL’s most vocal and successful owners, wrote Trump and two other leaders of the league a joint letter suggesting that the USFL could not “allow individual owners to pursue plans which are suited to their perceived best interests or whims” and citing Donald as his only example.
“It may be in Don Trump’s best interests,” Taube wrote prophetically, “to pursue a strategy which gains him leverage, politically or otherwise, to move to Shea Stadium and become the NFL franchise which the City of New York is apparently ready to underwrite at any price. But Don’s best strategy for the Generals could be devastating for the USFL as a whole.”
Despite the concerns about Trump that were being voiced by some of the owners, his money and his media attention were still viewed as a plus, as were the ties he claimed to the top brass at ABC, the network with the spring USFL contract and the most likely buyer of a fall package. In early January, the executive committee abruptly stripped Commissioner Chet Simmons of his negotiating role with the network and made Donald the lead man. An owner for barely three months, Trump had already become the dominant force in the league’s bargaining with its key source of revenue.
Donald also wasted no time in launching his stadium campaign. On January 4, Governor Cuomo announced in his State of the State address that he wanted the state’s Urban Development Corporation to “undertake a comprehensive statewide study of the need for sports facilities.” A top Cuomo aide, Bill Eimicke, began a series of calls to UDC president Bill Stern, urging the creation of a Sportsplex subsidiary that would undertake the feasibility study sought by the governor, as well as begin to plan a city stadium and several upstate sports facilities. In these initial conversations, Eimicke suggested only one name for the new Sportsplex board: Donald Trump. Trump had already spoken directly to Cuomo about building the stadium, and Eimicke told Stern that the governor was “certainly interested in any ideas Trump has.”
Eimicke’s calls were quickly followed by his statement to a Daily News reporter that the state was considering three possible sites for a New York City sports facility to compete with the Meadowlands. Trump’s name appeared in the same story — quoted as being in opposition to the three proposed sites and disclosing not only that he preferred another, unspecified site but that he planned to build the stadium himself. The notion of Trump building the stadium, and the Sportsplex concept itself, had debuted in the same story, just as he would have wanted it. The two ideas would remain linked in the public mind from then on.
When Stern called Donald to ask him to join the Sportsplex board, the developer said yes immediately. The day after their first conversation, on January 19, Stern and Trump held a perplexing press conference to announce the formation of the Sportsplex corporation and to name a single member of its new board. By the time the press conference was over, Donald was wearing three hats. In addition to his public role as a member of the board that would plan the stadium, and his already advertised his interest in building it, Trump added that his Generals might become the stadium’s primary tenant, saying “one day you might want to ask me to move the team” to New York, but that otherwise he would not “instigate it.” No one in the media or the government seemed to notice the blatant conflict.
Over the next month or so, ten other members were named to the Sportsplex board, including George Steinbrenner, who stalked out of the first full-board press conference in February when Donald started answering press questions, snapping, “This isn’t going to be a one-man show, or I’m not going to stick around.” Curiously, the board included one other USFL owner, whose team played in Michigan, but the only member with NFL ties was a former Jet player. Spurred by Donald’s behind-the-scenes recommendation, the board quickly hired Laventhol & Horwath as its primary consultant on a million-dollar feasibility study, and L&H retained the architectural firm of Hellmuth Obata & Kassabaum. L&H had long been Donald’s accountants, and HOK would become Donald’s architects for his proposed stadium.
Meanwhile, Donald was proceeding inside the top ranks of the USFL with his campaign for a fall schedule. Two days before his press conference with Stern in January, Trump wrote letters to every USFL owner reiterating his arguments for a switch to the fall, invoking endorsements from Howard Cosell and Jimmy the Greek, both of whom, he said, gave the league “virtually no chance of failure” if the change of seasons occurred.
The letters, which anticipated that a fall season would “create psychological havoc with the NFL,” were delivered the same day the owners gathered in New Orleans for their annual meeting, where Trump quickly took the floor again. Urging that the owners not repeat his comments to the newspapers, Trump said a fall schedule would lead either to a league with television contracts that would make it just as strong as the NFL or to a merger — “and the merger is going to take place sooner rather than later.” Trump was so adamant, and the debate so acrimonious, that Commissioner Chet Simmons had to promise to appoint a committee that he euphemistically said would look into “long-range planning.”
A profile of Donald that ran in an early February edition of Sports Illustrated certainly fed the fears about Trump — within the USFL and in the NFL. Labeling Trump “the biggest wheeler-dealer in all of sport” since his purchase of the Generals several months earlier, the article quoted Donald as saying he “could have had four or five NFL teams” but went to the USFL instead because he liked a “challenge” and because “the NFL is very vulnerable.” The article concluded with flat predictions that he’d build a stadium in New York and swing the USFL to the fall; it was only a matter of how soon.
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. When Donald called him in mid-March, Rozelle was the most powerful man in American sport — which meant he was the kind of man Donald liked to describe as a friend. In fact, other than brief conversations at parties, the two did not know each other. Nonetheless, when Trump asked for a meeting, Rozelle said he’d be free later 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, 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. (Rozelle’s version was supported by a file memo he wrote after the meeting and the claim that he’d discussed it with the league’s finance chairman: Donald had no memo and never spoke about the meeting with anyone.) 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 smokescreen. 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 the end of the 1984 season, the new league had bottomed out, limping through disastrous ratings and horrendous losses. Franchises from Chicago to LA, 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.
An expensive McKinsey management study Chet Simmons had commissioned, however, 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, at an August owners’ meeting, Trump berated the study as “bullshit,” insisting that the league’s 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, 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 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 and would finance it by selling most of the seats as if they were condominiums at an average price of between $4000 and $5000. 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 7000 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, 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 $1500 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. 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.
While Stern had known Cuomo longer than Tese, it was Tese who ultimately penetrated the Cuomo inner circle in a way Stern never could. The New York Times noted in a January 1985 story that the Tese appointment signaled Cuomo’s decision “to bring the agency more under his wing.” Tese entered the Cuomo camp as a contributor in the 1982 campaign, and over the years, rose from banking commissioner to UDC president to economic czar overseeing all state development activities. While he held his state posts, Tese and his wife continued contributing to Cuomo, donating $90,000 and becoming the governor’s third largest individual contributor. Tese’s long-standing business partner James Sinclair, as well as companies they both had an interest in, donated another $70,000. Tese, who continued trading heavily in gold and commodities and even moved a personal computer with commodity exchange software into the UDC kitchen, became so close to Cuomo he began acting occasionally as the governor’s personal financial adviser, giving him gold and silver tips.
At the same time that Tese became Cuomo’s key decisionmaker on the stadium, Trump changed lawyers on the antitrust case. In March of 1985, he dropped Roy Cohn and hired Harvey Myerson, a vigorous litigator like Cohn but one who, as Donald told Tese, “also does research.” Tese hardly needed an introduction to Myerson. He and Sinclair’s old trading companies — largely defunct but still embroiled in a variety of cases — were represented by Myerson’s litigation unit at Finley Kumble Wagner Heine Unterberg Myerson and Casey. Myerson’s powerhouse firm was also on retainer to UDC, hired by Stern in 1984 to represent the agency in a complex suit against Dow Chemical. While Trump’s selection of Myerson to handle the USFL lawsuit had its apparent bonuses at UDC from the beginning, it was hardly the only reason Donald chose him.
Myerson was a gifted lawyer who could mesmerize a courtroom, likened by one reporter to “a short Jackie Gleason in a Turnbull & Asser shirt.” A heavyset, five-foot-eight-inch, quick and raspy talker, with a $2500-a-month cigar habit, a raccoon coat, a collection of Ferraris, a glorious East Hampton estate, and a Rolls, Myerson was as grandiose and theatrical in a courtroom as he was in his personal life. He put an army of lawyers on the antitrust case almost immediately, running up a bill that totaled $6.9 million in fees and expenses by the time all appeals were exhausted. In mid-1985 he unearthed the infamous Harvard Business School report — Myerson’s much-brandished “smoking gun” at trial — which led Trump and the league to believe that they had a real shot at winning. But it was Myerson’s blitzkrieg of confidence, more than any document, witness, or argument, that infused the USFL with hope in 1985. Without that hope, it would surely have folded after its final spring season in 1985. Indeed, as the league headed into its year-and-a-half-long off season, New York Times sportswriter Dave Anderson wrote a column on the USFL headlined “The L Is for Limbo.”
Even Donald was behaving as if the suit were the league’s last chance. No invoices for the Generals’ 35,000 season tickets for the supposed fall season were ever sent to the ticket holders, and, in fact, no tickets were even printed. No arrangements were made for a preseason training camp. No stadium leases, at either Shea or the Meadowlands, were executed. No new players were signed. And the league’s only television contract for the 1986 fall season was so weighed under with conditions that no funds would be released until a game was played.
Donald was certainly in no rush to move forward on the stadium. If he wouldn’t print a ticket on speculation, he certainly wasn’t about to build a stadium on it. The only man in a hurry was Leon Hess, whose deadline for a stadium decision was fast approaching. The state and city had a choice — they could either get on a Hess timetable and, within a year, produce a solid, feasible stadium proposal, backed up by site acquisition action, permits, an environmental impact statement, and financing commitments, or they could acquiesce to Trump’s amble toward the Hess deadline, waiting to see if the USFL lawsuit might give New York a new set of options.
It’s difficult to fault Vincent Tese for his initial impulse of wanting the stadium designation put out to public bid. The city and Bill Stern had been leaning toward giving it to Trump, without competition, for fear that a bid process might make it impossible to meet Hess’s deadline. Stern strongly believed that this had to be “a tenant-driven, not builder-driven process” and later likened the emphasis on developer designation that followed his UDC departure to “building a pool in the Sahara, and worrying about the water later.”
Once Tese decided to bid it, however, the relatively straightforward Request for Proposals took a month to issue, since two sets of lawyers and bureaucrats, one from the city and one from the state, had to agree on every line of it, just as they would on every other public position throughout the designation process. One Trump ally in carving out the RFP language was Queens Borough President Donald Manes, who pressured city officials to stipulate that the project would receive a generous tax abatement.
The RFP suggested that the state planned to move quickly, declaring that “acquisition is expected to be completed, and title to the entire site obtained by UDC, by January 31, 1986.” With a half dozen bidders, Tese announced a July 5 deadline for designation of a builder. When that date passed, he amended it to August, then extended it again and again until December. The best evidence of who stood to benefit from the delays was that chronic complainer Trump — usually the first to criticize a recalcitrant government for ignoring business deadlines — who maintained a saintly vigil at UDC’s door. He protested when Tese decided to put the project to bid, but even that was muted. He never objected — in the media or to the agency — about what turned out to be a lost year.
Cuomo had installed Bill Mattison as Sportsplex president when Stern’s appointee, a career civil servant with a broad engineering background, resigned in June. Mattison was a stockbroker without construction or management background, selected because of his long family ties to Cuomo — his father had been a senior partner at the governor’s Brooklyn law firm in the 1950s. From the moment Mattison arrived at Sportsplex, he’d become embroiled in a protracted paper war with Trump and the only other finalist, a group including Fred DeMatteis and Morton Olshan, two New York builders. An extraordinary exchange of letters went on through the fall, with Mattison prying concessions out of both bidders. While Mattison and the city were making useful demands (one, for example, enabled the public sector to theoretically recoup its up-front acquisition and infrastructure investment over the first twenty or so years of the project), the time it took to wrangle this and other commitments out of Trump may well have cost New York the only potential tenant whose projected revenues could make the stadium buildable.
Mattison also gradually persuaded Trump to move from 15,000 general admission seats to 41,000, the fifty-fifty ratio of public access to condo sale seats required by the city and state. Since the other finalist was offering 82 percent general admission, Mattison could have responded to Trump’s initial refusal to go beyond a 25 percent public share by informing Trump that the state would simply select the other bidder. Instead, only at the very end, when the designation was made in December, did Donald finally agree to a 50 percent split, still far below that of the Olshan group proposal. In effect, Mattison and Tese wound up using the Olshan group’s commitment to public access as a weapon against its proposal. Olshan’s use of the Miami model — removing from the public market only 18 percent of the seats (still the most ever leased) — meant that the stadium generated less public and private revenue than Trump’s huge seat sale. Yet the primary reason Tese eventually cited for the selection of Trump was that the city and state recouped their investment several years sooner under his plan than under Olshan’s. It was Olshan’s strong preference for general admission seats that gave Trump his financial advantage.
Olshan insisted on the public seats because he knew that was the only way Hess would bring his team to the stadium. Every one of a dozen submissions to the state by the Olshan group emphasized that their bid was tailored to Jet concerns; they repeatedly claimed that they were in touch with Jet officials. Trump, on the other hand, never once mentioned the Jets in hundreds of pages of submissions. Yielding finally in November to state and city pressure, Olshan submitted an alternate proposal raising the percentage of leased seats to 30 percent, and though this proposal still had a substantially higher ratio of public seating than Trump’s, it repaid the city and state just as quickly. While Olshan acquiesced and submitted this alternate, he stressed in his letter that he did not believe the Jets would accept it and that his earlier 82 percent ratio was still the best lure for the Jets.
“The Jets, in recent conversations with our group, have made it abundantly clear,” wrote Olshan, “that they would find only 41,000 general admission seats unacceptable” — a direct slam at Donald’s highest offer. Tese had every reason to know that Olshan was on the mark since Hess had encouraged Tese in their first face-to-face meeting back in June to look at the Miami plan, which only involved the leasing of seats between the forty- and fifty-yard lines. Both Tese and Mattison agreed in interviews years later that Olshan was a credible man honestly recounting conversations his group had actually had with the Jets, but neither made any attempt to determine before picking Trump if the Jets would reject out of hand the seat distribution of the proposed Trumpdome. Instead, Tese selected the Trump proposal precisely because of the revenue advantages tied to a seat distribution that there was every reason to believe would never be acceptable to the Jets. It was all a maddening riddle.
At the very end, a frustrated Olshan charged that the state’s delays had “endangered the very viability of the project.” He had offered a detailed plan giving the Jets a 53 percent increase in their revenues over the Meadowlands, with prime tenant control of luxury suite profits. He had proposed financing the construction of the stadium with a private bond offering that, had the designation been made on schedule, would have put enough money to build the stadium in an escrow fund prior to Hess’s February deadline, a far more secure form of financing than Trump’s reliance on highly speculative projections of future seat sale revenue.
While Olshan had designed his proposal around the Jets, Trump was disdainful in his November letter of any attempts to woo them, promising that “time and a great stadium design” would eventually draw an NFL team to the city. UDC’s rebuff of Olshan — and its designation of a developer who was serving subpoenas on Hess in the antitrust case just days before he was named to build a stadium supposedly to house the Jets — were clear indicators of the low priority the state was assigning to any possible Jet return.
The fine print of the designation agreement that the state and city signed with Trump made a joke out of any notion that the mere act of picking a builder might be a concrete enough step to entice a skeptic like Hess to return to the city. The agreement was called a conditional designation, but it was, in fact, a hypothetical designation. Some of the hypotheticals were extended so far into the future that if Hess decided to opt out of his Meadowlands lease to sign up with New York, he would have been trying to schedule home games for dates listed in the Trump timetable for environmental permits. The agreement was little more than a succession of “if” clauses: If enough seats were sold. If the environmental impact statement (EIS) was completed before December 1, 1988. If the public sector took the necessary legislative action to fund the site acquisition and preparation. If the city determined that the site did not have dangerous toxins. If the site was delivered before December 1989.
Though Hess’s letter back in 1983 had required that “all authorizations, approvals and financing” be “securely in place before February 1, 1986,” no attempt had even been made to assemble the critical pieces — no EIS, no full appraisal of the properties on the site, no acquisition activities, no legislation authorizing the public bond issue, no stadium lease. The financing package was so conditional that Trump was protected from investing any funds at all until the state and city spent $150 million on acquisition and improvements. And the public sector didn’t have to start acquisition until Donald sold enough of his condominium seats — now valued at $12,000 each — to capitalize the project. Though Hess’s original letter had also specifically required that “all necessary permits” be obtained by February 1 and Hess had emphasized that he was particularly concerned about federal environmental permits (which were required for planned wetlands use for a parking area), the state had not even sought them. Nonetheless, as transparent a pretense as it was, the state went ahead with the designation as if it constituted an overture to the Jets.
The final negotiations with Trump and announcement of his designation occurred in a circus atmosphere at UDC on December 5. Though city and state negotiators had never conducted any face-to-face bargaining with the Olshan group, they did sit down in the end for last-minute bargaining with Trump and his lawyer, Allen Schwartz, the former corporation counsel who was so close to Koch that he was the mayor’s private attorney. It was during these negotiations that Donald made the fifty-fifty concessions and others that produced an agreement. Schwartz told city attorneys “not to worry about securing a football team” as a tenant, assuring them that “when we win this lawsuit, the Generals will be an NFL team” and that the team would move to the stadium.
The night before the designation, these talks, with Schwartz on site and Donald at home, lasted until four in the morning. The biggest point of contention, as with most Trump projects, was the name of the stadium. Allen Schwartz threw a two-hour tantrum over Trump’s right to select the name, making it a virtual dealbreaking issue. Schwartz was emphatic and in the early evening of December 4 even threatened to walk away from the deal, forcing city and state representatives to contact the governor and the mayor.
As laughable as the issue seemed, the city and state were unwilling to let the arena become the Trumpdome. Though no one from Trump’s side ever conceded it, Donald did not want to take any chance that the stadium his Generals would try to claim as their home would be called Jets Stadium as part of some agreement to bring the Jets back. In the end, the three parties decided that the stadium could not be named without the consent of all three parties — Trump, the city, and the state — essentially postponing a selection and leaving Tese with one less attraction to dangle before Hess.
Though a press conference was called for ten-thirty the morning of December 5, the battered group of bargainers had been forced to reconvene that morning at seven-thirty and were unable to finish until three in the afternoon. Tese was in and out of the sessions, relaying issues by phone to the governor in Albany. Schwartz, who had stormed out of the sessions at around 2:00 A.M., only to be drawn back in, spent much of the day running between the conference room where the bargaining was taking place and a UDC office on another floor where Donald Trump sat waiting.
When Trump and Tese finally walked into the conference room jammed with waiting press that December afternoon to announce the designation, Trump startled everyone with his candor about the Jets, the supposed prize that would come with his $276 million stadium. “The Jets are perhaps not a very likely candidate to leave where they are,” Trump said. “I personally don’t put great credence in the fact that they may come back. And I say that upfront.” Tese tried in interviews afterward to portray Trump’s comments as part of an elaborate “mating game” between Hess and Trump, but the truth was that Trump was not going to bargain with Hess, even though he had that obligation under the agreement with the city and state.
Tese, who had actually been doing and would continue to do whatever little bargaining there was with Hess, told reporters that “there’s a lot of negotiating that’s going to go on and Donald’s not a bad negotiator,” adding that if Trump can’t get Hess, “he’s going to get somebody else.” Trump openly pointed to his favorite option — predicting a league merger or some other settlement of the USFL suit that would lead to a new New York NFL team, probably named the Generals. Insisting that there was no deal to allow Trump to bring the USFL Generals to the stadium, Tese said that “if tomorrow the Generals go into the NFL, that would be fine by the city and state.”
It took another month for Tese to send his letter offer to Hess. In it Tese did stress the single strong point of the city and state position: The Jets were promised all the advantages of prime tenancy and far more projected revenue than could be expected at the Meadowlands. Hess’s response was a volley of criticism, assailing the delays and the failure to achieve “certain routine elements for a sound commercial proposal.” He expressed his particular outrage (just as Olshan had predicted) at the seat-sale and lease-back plan, which Hess said “takes $276 million from the pockets of our fans to build a domed stadium, plus additional charges of $36 million paid by our fans just to be able to buy tickets.” By Hess’s calculations, the owners and lessees of these seats, who still had to buy tickets for any individual event (including games) they wanted to attend, would dominate the stands from one end zone to the other, with regular fans restricted to the end zone areas.
Tese and company replied to Hess’s letter with one last faux pas — offering an already enraged Leon Hess a new and improved Shea Stadium to play in if Trump’s wasn’t finished on time. This was supposed to calm Hess’s understandable concern about what would happen if he took the offer, was forced to leave Jersey by the 1989 season (as the option terms of his lease required), and the new stadium wasn’t ready yet. Despite this and all the other problems, Hess, who had at first refused to even discuss the offer, decided to meet with Tese and the City Planning Commission chairman Herb Sturz, expressly excluding Trump from the invitation list. When Hess attacked the seat-auction financing plan, during the meeting, Tese replied: “Well, we can’t put the cost of it on the homeless people who need shelter.” Tese was suggesting, as he would later to the press, that the only alternative to a seat sale financing scheme was a taxpayer-built stadium, as if Olshan’s plan for a private bond offering had never been proposed.
“I’m not suggesting you put it on the homeless people,” Hess replied. “But I can’t be a party to having a husband and wife with two children either paying $48,000 for the right of buying a ticket or leasing four seats for $9,600 a year and still buying a ticket. I think it’s a horrible thing to do.”
When Hess’s predictable rejection hit the news, Tese responded with a public claim that “more than one” other NFL team had expressed interest in the Trumpdome and intimated that Hess had never really intended to come back to New York, a gratuitous attempt to shift the blame. In fact, as Tese well knew, Hess could have avoided the loss of the $1.7 million in interest on the $10 million he’d deposited with New Jersey any time before the February 1 deadline if he simply informed the Meadowlands he was staying. Instead, he forfeited it to consider New York’s offer.
Tese’s upbeat news, though, was a belated announcement of the state’s real plan: “If the USFL wins their lawsuit, we will clap our hands. We would love to have the Generals in the NFL.” Trump supported him by announcing that his “first alternative” was to put the Generals in his stadium, declaring: “I hope to have the opportunity. I expect the USFL to win the lawsuit.” Whatever ambiguity had existed before, it was clear now that the suit had become the only rationale for the stadium plan.
While the city lost interest in the entire stadium project after Hess’s rejection, the state pressed on. Even without a team, the governor sent a stadium bill to the legislature in April, seeking bonding authority for $115 million. UDC told legislative leaders that it was “anxious” for the bill to pass because it believed “it would be difficult to negotiate with a team unless there are state funding guarantees” — precisely what Hess had said only a few months earlier. The bill — blocked by a host of legislative attacks on the viability of the project — was designed to go into effect at around the same time as a verdict was expected in the USFL case.
As a final expression of the Cuomo administration’s surrender to the Trump strategy, Tese and Mattison actually became witnesses for Donald, Myerson, and the USFL at the antitrust trial in June. The flamboyant Myerson announced several times in court that Cuomo himself might appear, but the governor never did.
Myerson used Tese and Mattison in an attempt to prove what he called the “New York Conspiracy,” a sop thrown to a local jury and press corps. His argument was that Hess and Pete Rozelle had conspired to exclude an NFL team from New York, stringing state and city officials along in a deceptive effort to convince them that the Jets might return in order to prevent them from dealing with Donald about a stadium for the USFL Generals.
In addition to the two state witnesses, Myerson also produced U.S. Senator Al D’Amato, who described himself as a “friend” of Donald Trump’s and testified about the shifting moods of Leon Hess in three conversations in 1985 and 1986, concluding that, in his opinion, Hess “had no intention of returning and was giving me excuses that really did not go to the real reason.” What was surprising was that Myerson’s billings revealed that D’Amato had talked with a Finley partner about the case shortly before two of his conversations with Hess, suggesting that the senator may have been acting as a conscious agent of Myerson’s and Trump’s.
While Mattison’s testimony was similar to D’Amato’s — a straightforward account of one encouraging and one discouraging conversation he’d had with Rozelle about the Jets returning to New York — it was Tese who became the only witness to actually serve up the bizarre Myerson conspiracy theory for jury consumption. Tese turned the entire scenario of a year-long delay and a mismatched proposal on its head, as if Hess were somehow responsible for the state’s protracted production of a plan that flew in the face of his own demands.
Tese painted Hess as a “bad faith” bargainer, claiming he’d even called Hess that to his face in their final meeting, a charge Hess denied under oath. What was most peculiar was Tese’s contention in the climactic series of questions at the end of Myerson’s examination that Hess’s “indecisiveness” may have stood in the way of the state’s making a stadium deal with the Generals. Myerson asked Tese if the state would have considered “other alternatives” had Hess “told you no at an early time,” and when Tese said yes, Myerson pressed him on whether or not one alternative would have been “to explore some arrangement with the USFL club, and in particular, Donald Trump.”
“Well, I think if we could have negotiated out a deal where there would have been absolutely no cost to the city or state, we might have entertained that type of proposal,” Tese answered. “And, in fact, we did kick it around a little bit, to have a stadium that would not only accommodate the USFL but would accommodate other things.” Asked if he had failed to explore this USFL alternative over the long course of the designation and negotiation process because he thought the Jets might return, Tese said: “The answer to that is yes.”
Under cross-examination by the NFL, Tese stubbornly insisted that if Trump “had walked back into our door” and said he would “put up a team, put up all the money” and build a stadium, “yes, then we’d entertain that idea,” adding that “the city was in favor of pursuing” such a Trump-guaranteed, USFL-tenanted stadium. Asked if he was willing right now “to explore the possibility of building a stadium for a USFL team,” Tese replied: “Sure.”
This testimony contradicted every public statement Tese and the city had made about being interested only in an NFL team. It contradicted the designation agreement with Trump and the amended RFP, which required an NFL franchise in writing. It contradicted every financial assessment, whether by UDC’s consultants or those of the developers, that the only way to generate the revenue to repay the public or private investment in the stadium was with an NFL team. It would eventually even be contradicted by Tese and Mattison themselves in interviews with a reporter.
Mattison couldn’t have been clearer on the point in a 1990 interview: “We considered doing it with a USFL team and we rejected it out of hand. Trump wanted to build it without an NFL team and we said impossible. We weren’t confident the Generals could repay the bonds.” Mattison, who said Myerson was “disappointed” during pretrial preparation that Mattison was unwilling to go beyond his description of the Rozelle conversations and into the plausibility of this USFL alternative, said that the city did express a willingness to support a USFL stadium with Trump guarantees, just as Tese testified. But, Mattison added, UDC had specifically rejected any such possibility.
Tese himself said in a taped interview for this book: “We would have never — ever — built a stadium based on a non-NFL franchise. The only way we would have gone with the Generals was if the Generals were in the NFL. We needed the luxury of an NFL franchise.” Confronted with the contradiction between his testimony and his position four years later, Tese said that Myerson had “sprung the question on him.” In fact, in a sidebar conversation with the judge immediately before this portion of Tese’s testimony, Myerson accurately predicted exactly what Tese would say and successfully persuaded the judge to permit this speculative testimony on the basis of his claim that “our whole position” on the New York Conspiracy issue rested on this Tese statement. When the judge tried to get Myerson to mitigate the speculative nature of the approach by asking Tese what alternatives “were considered,” Myerson answered: “I can’t say ‘were considered.’ The whole point of my line is that they would have been considered but for this stringing out.” The truth was that the USFL alternative had been considered, and rejected.
In his summation, NFL lead attorney Frank Rothman, the smooth and dapper former president of MGM, accused Tese of “willful, deliberate falsehood under oath.” Perhaps because the case was being covered almost exclusively on the sports — not the news — pages, this grave charge against a high state official went unreported. But Rothman was not talking about the contradiction at the heart of Tese’s testimony. He was castigating Tese for falsely claiming that the $276 million in seat-sale revenues would be split in three parts, evenly divided between Trump, the public sector, and the Jets. Rothman argued that the proposal Tese wrote himself and sent to Hess “put the lie” to this claimed distribution. “How dare he? Why? I suppose he is protecting Mr. Trump, and that’s troublesome, very troublesome,” said Rothman.
The jury wound up rejecting the New York Conspiracy, like much of the rest of Myerson’s bluster, finding in a July 31, 1986, verdict that the NFL had not engaged in any anticompetitive acts. While the jury did agree with Myerson on the obvious — that the NFL was a monopoly — it could not bring itself to exact from the league the tiniest fraction of the $1.3 billion in damages that the USFL was seeking. All Donald’s spectacularly publicized courtroom trench war produced was a field goal: a devastating $3 award.
The pivotal tactical error was the decision to build the case around Trump, encouraging the jury to see it as a Donald versus Goliath struggle, rather than the battle between David and Goliath leagues that the USFL had hoped it would become. Trump was the only active owner to testify at the trial, a blunder that left the jury with no real impression of the typical USFL owner — a struggling entrepreneur battling the NFL octopus. Rothman made much of the other USFL owners’ failure to appear in his summation, contending that they were not there because “they didn’t want to talk about Trump taking them down the road of despair.” Rothman poignantly described the early owners, committed to a spring schedule and financial restraints, as overwhelmed by “the wheelers and dealers” who announced “I’m going to have it my way because I have to have an NFL franchise and then I get a free stadium.” He said Trump saw three ways to make money in football — “tickets, television, and treble damages” — and this suit was his route to all three.
The verdict was also a personal repudiation of Trump. The jury went out of its way in its detailed response to a long questionnaire from the court to clear Pete Rozelle of all liability, suggesting that they believed his, not Donald’s, version of the Pierre Hotel and other reputed conversations. Trump’s credibility had been effectively challenged at trial in a number of other ways, particularly when he was forced under cross-examination to question the reliability of a stenographer whose minutes of a USFL owners’ meeting had him openly advocating a merger strategy.
In the aftermath of the case, Trump was, as usual, quick to cut his ties with anyone who might remind him of his own mistakes. Though Myerson had once been on the Mar-A-Lago invitation list, Trump’s relationship with him was never the same after the verdict. He stuck with Myerson on appeal, but when that failed, too, in the summer of 1987, Donald dropped him altogether. The loss of the USFL case was a key factor in the bankruptcy of the Finley Kumble firm itself — the largest legal collapse in the nation’s history. Had Myerson won, there would have been a gigantic final fee, and the publicity would undoubtedly have attracted millions in new business.
When Myerson started a new firm in 1988, Donald signed one of the eight prominent statements of support released to recruit clients, unembarrassed apparently by the lead-the-lambs-to-slaughter character of the endorsement. Donald did not reveal until later, when Myerson was buried under an avalanche of horrid publicity, an indictment, and a second bankruptcy — all revolving around his alleged billing excesses — that he had himself never really used the second Myerson firm, having suffered through “so many billing disputes with Myerson” that he would “never use him again.”
Trump also cast the decisive vote at a USFL owners’ meeting shortly after the verdict to pull the plug on the long-awaited first fall season. But he had one more team-play message for his fellow owners the day before the meeting — he announced that he would permit his stars like Herschel Walker and Jim Kelly to negotiate with the NFL. The league stayed in business, with ten-member skeleton teams, while the appeal went forward. The stadium project did, too, just as nominally. The end of the league and the stadium finally came in the summer of 1987, when the appeal died.
By his own estimates in court papers, Trump lost approximately $22 million on the league. The court defeat also solidified the pigskin putsch that Donald had resolved either to break into or break up. Yet the mixed verdict — the jury’s conclusion that the NFL was a benign trust — gave Donald a way to turn the debacle into a public relations standoff. It was confusing enough to make people wonder if Donald hadn’t been cheated, by a quirk of fate, out of another golden win. While the legal blur was some solace, there was no denying that Donald had in truth suffered a crushing financial defeat. The events of 1986, from the long view of hindsight, would take on a watershed look, in sharp contrast with his previously unbroken string of triumphs and in painful anticipation of the hard years just around the corner.
(For more on Donald Trump’s relationship with Mario Cuomo, click here.)
This article from the Village Voice Archive was posted on March 4, 2019