NFL Expansion Presentation

The L.A. Hustle Ownership Group

• Larry Ellison: Founder of Oracle ($25b net worth)-BMW Oracle Racing, America’s Cup-Has tried to purchase NFL franchises for the purpose of moving to LAAdvantages: Capital, instant internet respectability, sports enthusiasm

• David Geffen: Founder of Geffen, Asylum, and Interscope-Geffen Records, Dreamworks SKG Film Studios ($6.5b net worth)

-Malibu resident and major LA booster, strong relationship with President Obama, significant beachfront hotel properties (hotel+ticket packages available)

• Steve Jobs: Founder of Apple, owned Pixar, Disney board member and largest individual shareholder ($5.5b net worth)

-California born and bred, instant business relationship with Disney and Apple, Aesthetic visionary

• The owners also have the advantage of all being close friends. Two of the principles own the world’s largest yacht together; they have been in each other’s weddings and own property near one another. Their unique talents, high level of collaboration, and the degree of potential extrinsic synergies as a result of their experience, connections, and friendship sets them apart from other NFL ownership groups.

Ownership Group Beliefs

• As a whole, the ownership group possesses the following key beliefs:• Revenue sharing is key to league survival. Large market teams, like

the Hustle will be, must support smaller market teams in some respects or competition will suffer and the NFL product will be vastly diminished.

• International expansion is an exciting and worthwhile pursuit--LA’s proximity and relationship to the Asian market make the Hustle the logical team to act as an Asian ambassador team. The NY Giants or Jets would be likewise appropriate as an European ambassador team.

• NFL player behavior problems must be curbed, and quickly, to preserve the goodwill in the league and individual franchises. To this end, the group believes the Commissioner should continue his current program.

• Teams should take a greater share of responsibility for protecting their players. The Hustle already has a plan in place for managing its players’ activities and providing them alternatives to the potential pitfalls related to the temptations of Los Angeles nightlife.

Key Financial Terms

• Currently, the richest NFL Owner is Paul Allen, at approximately $17b in net worth.

• Our ownership group is worth a collective $35b.• Important because it allows the proper amount of investment

into what becomes the NFL’s largest single-team market.• By virtue of capital flexibility--only one major loan taken ($1b)• 8% interest on loan, pre-payment is possible. Ownership group

will keep that option open, especially if future long-term financing is required, but the Hustle plan on becoming a cash-flow based operation very soon--so the current plan is to make the structured payments and take advantage of the currently very low financing rates and the time cost of money throughout the scheduled course of the loan.

• The owners are committed to being the most active investors in their team in the NFL. All teams stand to benefit due to revenue sharing and tapping into the LA market.

Financial Projections

Year 1 Year 2 Year 3

Tickets 89,742,276 97,569,797 105,696,458

Concession 7,862,400 8,548,176 9,268,022

Team Merchandise 1,965,600 2,137,044 2,317,006

Parking 2,625,000 3,375,000 3,750,000

Advertising 3,000,000 4,000,000 5,000,000

Stadium Naming Rights 1,500,000 2,000,000 2,500,000

Seat Licensing 25,272,000 1,404,000 1,404,000

NFL Television Contract 127,500,000 127,500,000 127,500,000

Local Television 750,000 1,000,000 1,250,000

Local Radio 1,500,000 1,750,000 2,000,000

Total Revenue 261,717,276 249,284,017 260,685,486

Financial Projections Cont.

Year 1 Year 2 Year 3

Player Payroll 98,600,000 107,532,000 116,911,180

Coaching Payroll 3,000,000 3,000,000 3,000,000

Non-Player Payroll 5,000,000 5,150,000 5,304,500

Stadium Operating Cost 5,000,000 5,500,000 6,000,000

Stadium Loan Expense 39,030,861 39,030,861 39,030,861

Practice Bubble Op Cost 4,000,000 4,120,000 4,243,600

Other Expenses 10,000,000 10,300,000 10,609,000

Total Expenses 164,630,861 174,632,861 185,099,141

NET PROFIT 97,086,415 74,651,156 75,586,345

Demographics• Los Angeles County, CA is by far the most populous county in the

United States: 10,363,850 residents as of Jan. 1, 2008.• As of 2004, the county’s population is larger than the individual

populations of 42 states considered separately (more populous than the aggregate of the 11 least populous states).

• LA residents continue to earn more and spend more than almost every other major U.S. market, raking second in the Nation only behind NY.

• California’s economy would rank 7th in the world if it was a country.

LA DMA

Total Population 17,739,389

Total Households 5,700,153

Total Effective Buying Income $340.5 billion

Total Retail Sales $189 billion

Total Consumer Expenditures $307 billion

Demographics

• Existing Sports: Dodgers, Lakers, Clippers, Sparks, Kings, Club Deportivo Chivas USA, Galaxy, Avengers.

• Second largest television market in North America.• Out of the hundreds of radio and television stations

in Los Angeles, of which many will cover the LA Hustle, twelve local radio stations and ten local television stations broadcasting in English and Spanish are expected to provide regular coverage.

Stadium

Stadium

• Renovation of Los Angeles Memorial Coliseum

– NBBJ (and later RTKL Associates, Inc.) – international architectural firm that has designed numerous NFL stadiums.

– 1920s-era stadium with a premiere modern venue

– Changes will occur within the existing exterior wall.

• Two year, $400-$600 million Project paid for by the Ownership Group.

• NFL has promised at least one Super Bowl to LA should a new stadium be built, which would generate sufficient revenue in a single year to offset 25% of overall cost of the construction.

• Three seating decks and two luxury suite levels.

– 40 rows of lower seating on main concourse

– 18 rows of club seating above main concourse approx. 10,000 seats

– Rear of Club deck with 140 private luxury suites on two levels of which 100 have been licensed for a period of 5 years with a price increase of $49,000 per luxury suite over the term of the agreement

• Minimum capacity 68,000 with expandable seating up to 80,000.

• Tailored for a great number of events.

Concessions

• Provided by Aramark

• Agreement will cover all events at the Stadium

• All concession commissions with respect to NFL football games and NFL football related events will be paid to the Club

• Experience in NFL Stadiums: Giants Stadium, Heinz Field, Lincoln Financial Field, M&T Bank Stadium, Paul Brown Stadium, Reliant Stadium and RFK Stadium

Security

• The Security Plan: LAPD and LADOT– Private on-site security force

– Surveillance system

– Locks and alarms on entryways

– Security and parking lot lighting

– “Spotters” to survey parking lots

– Maximum accessibility for emergency service personnel.

• Emergency Procedures Plan• Traffic Control

Parking

• Coliseum parking lots will open approximately 6 hours prior to kickoff.

• Cars - $25• Recreational Vehicles and Busses (Lot 2) - $125 per day

– May open Friday before game.– Tailgating is permitted on Game Days, both on

campus or in the parking lots. Rules are strictly enforced.

• There are approximately 20,000 parking spaces in and around Exposition Park, including lots on the USC Campus and Shrine Auditorium

Parking

Parking

Transportation

Marketing Campaigns

• Newspaper Ad Blitz: Buying ad space in the top three paper circulating English newspapers in LA, top two Spanish speaking newspapers. The ad space will be located in sports sections, and the ads will be teaser ads in order to upsell higher quality seats and club seats.

• TV Ads: Commercials to be carried on locally broadcast ABC, NBC, CBS, Fox, and Telemundo (Spanish Speaking) channels. These will be 30 second spots that will start as teaser commercials and evolve as the team takes form into ads with current players, actors, musicians, and models.

• Internet Campaign, 2 Prong Attack:

Marketing Campaigns cont.Prong 1: Official Website+Affiliated Blogs--The team will have a traditional team website that shall be designed

leveraging both Oracle and Apple’s strengths. As a result, it will be an extremely interactive site that is both easy to use and aesthetically pleasing to visit. This website will also offer and link to affiliated blogs.

These blogs will be available to the public in general, but the Hustle will supply content (both free and licensed) to the blog operators for display. As such, the Hustle will be able to influence whose blogs become the most popular, driving traffic and greatly raising the eCPM.

The bloggers are incentivized because they make a revenue share from ads displayed on the blogs. The Hustle will also generate additional ad revenues on our own from this revenue share--the Hustle will also sell ad

space, create a blog template with ad space filled, and procure well known sportswriters to operate their own LA Hustle blog (known authors will get a higher % revenue share).

Prong 2: Additionally, LA Hustle will engage in viral online marketing campaigns leveraging social networking sites like Facebook, MySpace, and Twitter and various content hosts like YouTube. This will happen in 3 distinct stages in order to build exposure and excitement.

Stage 1 will occur after being granted an NFL franchise. Teaser campaigns for logos, stadium, and LA football in general will be the centerpiece of this stage.

Stage 2 will occur shortly before and during expansion and regular draft day. This campaign will focus on players, rumored and actual, the LA community and the impact those potential players will have on it and the Hustle.

Stage 3 will occur during training camp and pre-season. This campaign will leverage Mr. Geffen’s connections with major recording artists and studios, and will include “virally” captured tributes to football, LA, and LA football. It will also utilize Mr. Jobs’ connections with Pixar and Disney. Virtual likenesses of players and coaches will grace the Internet everywhere, exhibiting key personality and athletic traits. Mr. Jobs will also sponsor the launching of

Mobile Apps designed specifically to follow LA Hustle’s every move.

Marketing

Marketing