Tag / San Diego Chargers

by Frank Maduri

NFL – Los Angeles Update – The Fate of 3 Franchises

The NFL returned to Los Angeles with a preseason game last week between the newly relocated L.A. Rams hosting the Dallas Cowboys in front of almost 90,000 fans at the L.A. Coliseum. The Rams, who had called Southern California home for decades before moving to St. Louis in the mid ‘90s, only to return again to Los Angeles in a landmark decision by the NFL owners committee in February.

The Rams once played at the Coliseum, so the game had a retro feel, almost like a “back to the future” kind of vibe to it, and the team showed that they have some growing to do in order to get themselves back into a contender in the NFC. The top overall pick in the 2016 NFL Draft, Rams quarterback Jared Goff, looked shaky and inconsistent at points. The offense features a future star in the league at running back, Todd Gurley, and the defense is young but talented.

The on-field issues for the Rams are only one piece of the equation, the bigger picture is the importance of Los Angeles to the future of three franchises: the San Diego Chargers, the Oakland Raiders, and the before mentioned Rams. The vote that landed the Rams back in L.A. and approved the plan by Rams ownership to build a gigantic stadium and other development in Inglewood has some important caveats to it.

The Chargers have the right of first refusal, essentially as part of the NFL vote, they have two separate one year options on relocation to L.A. if they cannot come to an agreement with the authorities involved in San Diego to remain in that market. The Chargers exercised their first of the two options by choosing to remain in San Diego for the 2016 football season.

The stadium proposal for the Chargers, which I covered in previous articles, centers on a waterfront facility that will adjoin an expanded convention center space for the city. The voters in San Diego will ultimately decide the fate of the team with a referendum ballot initiative on Election Day in November. The measure will decide if the public funding portion of the project, which will be obtained through tax increases on tourism and hotels, will be approved by the citizens. In the event that the measure fails, I think the Chargers will move to Los Angeles and join the Rams in the Inglewood stadium.

Conversely, an approved vote by the required majority in San Diego would make for an interesting scenario because the Chargers would remain in San Diego. This would open the door for the Raiders to potentially move to Los Angeles under the terms of the agreement in the NFL owners vote regarding the return of the league to that market.

Raiding LA?

The report I saw from Mike Florio on NBC Sports was very interesting regarding the future of the NFL in L.A. in that the sources he consulted stated that the Rams would be very reluctant to have the Raiders join them in that market. The prevailing theory being that the Raiders (who also once called L.A. their home) would quickly become more popular than the Rams in Los Angeles.

The survey data seems to indicate that the L.A. market would have a more lukewarm reception for the Chargers in that market, and the Rams would be the more popular team in that scenario. The Raiders were enormously popular in L.A. when they played there, particularly in the ‘90s when the Silver & Black represented a greater societal symbolism with the movement towards the hip hop cultural revolution at that time which fostered an ESPN films production.

The Raiders have been working on several different fronts to find a new long term stadium solution to improve their revenue streams in order to stay competitive in the modern NFL landscape. The team has been working with Oakland on a new stadium for years, it has considered a relocation to San Antonio (that could be leverage for Oakland to make a deal), and the most recent scenario involves a potential deal with Las Vegas to relocate to the desert.

The other potential option for the future of the Raiders could be a move to L.A., but that would be put on the table as an option only after the Chargers exhaust their two optional years, which would mean 2018 at the earliest for a relocation to their former home in Southern California. That could still potentially happen if they do not reach an agreement with Oakland on a stadium deal in the interim.

In my view, as I have covered this topic and the NFL and their race to return to L.A. for years now, the Raiders situation is a mess and it will remain complicated for a while until it gains eventual resolution. The team ownership, notably principal owner Mark Davis, spins the line that the Raiders have many options as far as where they will eventually call home.

Back to Reality

However, in reality, he still has to get that relocation approved by the NFL and the full body of owners. Some pundits who like to “stir the pot” will say that Davis does not need NFL approval to move the team, that if he has a break in the lease in Oakland, he can move the team anywhere. While this may be true in theory, the fact is that if Davis wants to tap into the money that the NFL would provide toward the construction of a new stadium in a different market (usually in the area of $100 million) then he would need the approval of the NFL to relocate the franchise.

Some fans may recall that when the NFL announced that the Rams were going to be moving into Los Angeles, the league provided an incentive, which amounts to a consolation prize to the Raiders and Chargers. That incentive is to provide an additional $100 million (for a total of $200 million) to both teams if they could get a new stadium deal done in their current home markets of Oakland and San Diego respectively.

It is this incentive where I feel that both teams will eventually make something work in their home markets. In the San Diego scenario, the waterfront proposal has to pass in the November referendum. In the case of the Raiders and Oakland, I do not believe that they are going to Las Vegas especially now that the powers that be in that scenario have already changed the agreement.

The original Las Vegas proposal was for a 65,000 seat domed stadium to be built near The Strip to be shared between the NFL team (in this case the Raiders) and the UNLV football team. The proposed site development plan totaled $1 billion for the stadium and the city was willing to pay close to half of that amount. Mark Davis and the Raiders were going to get $100 million from the NFL to offset his end of the financing.

In the months that followed, Las Vegas got awarded an expansion NHL hockey franchise. Some feel that this recognition of finally getting a seat at the table at one of The Big Four sports leagues led the politicians there to change their tune about the NFL stadium proposal. The public financing end of that proposal went down sharply from the initial $500 million they were willing to absorb. The site that was identified has some other issues with it (which I will not detail further) and so now the proposal has expanded to nine different sites for a potential football stadium. These developments, on balance, make it seem that Las Vegas is less serious about spending public money to get the NFL to come to them, and that was the entire reason why Mark Davis was even entertaining the notion in the first place.

Gambling on the Desert

I thought that the Vegas option was waning but today I read two different reports: one that has the Raiders applying for trademarks around the name “Las Vegas Raiders”, and another that stated that NFL Commissioner Roger Goodell is looking to block the Raiders progress in Vegas because he prefers the team to remain in Oakland. This could get very sticky, very quickly. It is no secret that Goodell prefers that most teams stay in their current markets and the Bay Area is an important strategic region for the league. The issue of Las Vegas and gambling brings a whole other level of concern I think that the NFL is not willing to publicly recognize, but it is palpable internally within the league office at this point.

The San Antonio option for the Raiders, in my view and it is shared by others with knowledge of this situation, is that it is a ploy for leverage for Davis to get a stadium done in Oakland. I understand that Davis owns quite a bit of land there but the other issue to consider is the Dallas Cowboys and the Houston Texans would vote against that relocation. The owners of those two teams, Jerry Jones and Bob McNair, are both very powerful NFL owners that would get their other friends on the ownership panel to reject this potential move. Those two teams would be reluctant to have another competitor move into their region. The San Antonio option seems unlikely as well.

That leaves the Raiders probably staying in Oakland because they have the most incentive to do so ($200 million from the NFL towards stadium development) and the history of the franchise is tied to that market. The NFL would like to keep two teams in the Bay Area if possible, so I think every effort will be exhausted toward getting a stadium deal done. The issues with Oakland are that the public appetite toward funding a stadium with tax dollars is very unpopular.

The secondary issue is the land for a stadium is limited as far as the number of suitable sites that could be developed in a reasonable amount of time. Mark Davis has floated a proposal in the past for a very intimate new stadium around 50,000 seats but he prefers the current site where the team plays at Oakland Coliseum.

The problem with the Coliseum site development is that the A’s play baseball there from April through October, so it leaves very little time to do construction at the site without conflicting with the A’s and their 82 games played on that site each season. The A’s, for their part, have signed a lease extension to stay in Oakland, but have been trying to move to San Jose for years. The San Francisco Giants have the territorial rights to San Jose and have blocked the A’s from moving there.

The Raiders were hopeful that the A’s would move across the Bay to San Jose because it would clear the path for them to build a stadium on land adjacent to the Coliseum on a faster timetable. The presence of the A’s on that site provides another hurdle to the project, but in the end, I think the Raiders will get a deal done to stay in Oakland.

Rams Reboot

The fate of the Rams is also tied to these other two teams, even though the Rams got the coveted first shot at the NFL reboot in Los Angeles. The Rams will have the inside track on all of the top corporate sponsorships and marketing opportunities. However, if they have to eventually share the market with another team that will impact them over the long term. The difference comes with which team they could potentially have to share the market with in Los Angeles.

The infamous “polls” that Rams owner Stan Kroenke cited from Twitter that allegedly displayed that the residents in the L.A. area favored the Rams over the Chargers in terms of popularity were part of the pitch that landed his team in Los Angeles. The Chargers would not be nearly as popular, according to other industry studies, as the Raiders would be in L.A. which was part of NBC Sports and Mike Florio’s excellent reporting on this situation.

A relocation of the Raiders to Los Angeles in the future would have a significant impact on the Rams and their presence in the market from a marketing and fan base development perspective. The obvious best case scenario for the Rams would be if the Raiders and Chargers both stayed out of the L.A. market for the long term. In the interim they will look to reap the benefits of being the first entry for the NFL into that huge untapped area which is the second largest media market in the US. They will also open their new stadium in Inglewood in a few years which will provide the NFL with a glitzy destination for the NFL Draft Combine, the Super Bowl, and other large scale league wide meetings.

The Olympic fever that just gripped the whole country will also benefit the future bid for the 2024 Summer Olympics where the US Olympic Committee is looking for the Rams Inglewood stadium to be the landmark centerpiece to a bid to get the Olympic Games back on US soil.

In the end, the Rams may be just beginning their new quest to rebrand themselves as “the team” in Los Angeles, but the team and the NFL still has unsettled business with the Chargers and Raiders. The fate of all three of these franchises are tied to L.A. and it remains to be seen how the political and financial forces at play will decide the chain of events regarding the future of the sport that America loves in San Diego and Oakland respectively. The next few months will provide some clarity, but for now, it is still anyone’s guess how it will be decided, and the fans of the three teams hang in the balance.

by Frank Maduri

Bolting Ahead: The Chargers Downtown Stadium Update

The San Diego Chargers path to a playing in a new downtown stadium just took a detour with a decision by the judicial system in California regarding the voting mechanism for the November ballot referendum. The Supreme Court of California recently handed down a ruling which would require a two-thirds majority for the stadium initiative to pass on the ballot this fall rather than a simple majority.

The Chargers and the city officials in San Diego quickly countered that news with an announcement that they had anticipated that hurdle and were approaching this measure prepared to gain a two-thirds majority for success. The Chargers have a petition with over 100,000 signatures awaiting verification from the proper legal authorities regarding the stadium measure needed to keep the NFL franchise in that city.

In the event that the referendum measure fails to gain approval from the voting majority, that would put the future of the team in San Diego in jeopardy. The team has an option on the table from the NFL and the Los Angeles Rams to play at the new Rams stadium being constructed in Inglewood outside of downtown LA.

The Chargers decision at the end of the 2015 season to put all their efforts into moving to Los Angeles left the people of San Diego very upset. The Chargers may not have enough votes to pass this stadium ballot initiative which is structured in a way that it would bypass the rigorous steps of environmental studies on the downtown site proposed for the stadium adjacent to the convention center. This method would expedite the completion date of the stadium.

The “Convadium” concept as it is known in San Diego is the project to build a new stadium for the Chargers and connect it to an expanded convention center for the city. This proposal has been rife with problems from the beginning and is basically still a mess at this point. The main issue of course is involving the financing of the project: nobody seems to be clear on who is paying for what portion and how the public financing component of the project will be structured.

The other sticking point is over who has the final approval of the design of the space, and whether the Chargers will include the playing surface as part of the convention space. The thought process being that they could potentially gain revenues for convention use of the stadium side of the expanded convention center, which some residents have taken issue with that portion of the potential plan for the site.

Mission Impossible

In my previous work on this topic I have compared the Mission Valley proposal to the downtown convention center proposal. This scenario came up again recently and Dean Spanos sent a letter to the city officials involved basically stating that the team will not consider the Mission Valley site under any circumstances. The letter basically spells out that it is either the downtown site or nothing at all.

The news that the team management will not consider Mission Valley as an alternative site has fueled speculation that the Chargers could eventually move to Los Angeles and relocate the franchise. I must admit that I was of the opinion that once the Chargers opted to remain in San Diego for the 2016 season that they would get a deal done with the city and remain there; now I am not so sure given the events of the past six weeks. The situation could get very negative between the team and the city and the residents hold the cards; and they are upset with the Chargers or skeptical of the value of the new stadium project. That is a bad combination.

There are rumors that certain city officials believe that if the initiative on the ballot for the downtown “Convadium” fails that they can move ahead with a plan to build a new stadium on the Mission Valley site and lure another NFL team to play there, assuming the Chargers bolt for LA. The most frequent team mentioned is the Jacksonville Jaguars in that relocation scenario, which is understandable because the Jags play in the smallest market in the league and have an uncertain future in Northern Florida – moving that team anywhere would be an upgrade over the market they are in from a metrics perspective – but I am not an advocate for relocating existing teams and alienating their respective fan base.

The Chargers management and some of the local political forces are fixated on the downtown site especially considering that would make San Diego a Super Bowl destination again which equates to big dollars in tax revenue and revenue for small businesses there as well. I understand having been to San Diego myself and being at both sites, Mission Valley and the Convention Center downtown, the differences in those areas are distinct. I also understand the trend for the NFL and other sports is moving to downtown stadiums attached to some other type of retail or commercial development property.

Opposition View

Furthermore I understand the opposition viewpoint regarding traffic on game days downtown and the environmental impact of a stadium in the convention center site. The situation is a total mess with no clear indication of how it will be resolved. The plans for the convention center and adjoining stadium development are controversial and have some definite down sides to it. The plan to raise hotel taxes to pay for the public funding portion of the stadium may or may not “play” well with the residents of San Diego in November.

In the end, the voters control the destiny of this project and hold the fate of the Chargers in their hands. It is a refreshing alternative to another stadium deal I have covered recently with the Atlanta Braves and Cobb County where the residents had little to no input and the decisions were made behind closed doors. The Tampa Bay Rays stadium quest is being closed to the public as well.

The Chargers and the city have to spend some time and resources on providing the residents with the facts and being transparent in the process for them to have success in November. The team will either be preparing to play in a new stadium downtown in a few years, or I believe if the vote goes against them they will relocate to Los Angeles. The decision has big implications for San Diego as well as for future stadium proposals that may go the way of public referendum voting and it is anybody’s guess how it will turn out.

by Frank Maduri

San Diego Chargers Downtown Stadium Proposal News

In a follow up to earlier news stories on this topic, the San Diego Chargers of the NFL have advanced their proposed stadium plan for the downtown waterfront site in details that were leaked to the media on Tuesday. Several local news sources in San Diego have reported on this development, and the full proposal is expected to be formally released at some point this week.

The new stadium for the team is being sent through a process called citizens initiative which in the State of California is similar to a referendum voting mechanism. In this process if a certain amount of votes is gained on the proposed issue at hand then the measure will gain approval. The Chargers and the City of San Diego municipal officials are utilizing this mechanism because if the stadium proposal passes via citizens’ initiative, then the exhaustive environmental review of the land being used for these developments will be bypassed.

In California, the environmental review process could add extensive time to the completion of the project. In the event that the initiative is approved by the majority of the general public then the stadium development will take a huge step forward. It should be noted that the Chargers new stadium, under the details of this plan, would be attached to a new convention center for the city. Therefore, the vote will be for approval for both projects.

In an ironic twist, this initiative is the same procedural mechanism that the Chargers used to accelerate their stadium proposal in the LA suburb of Carson in order to “fast track” the land there in the race to LA with the Rams. Carson approved the measure, but the Chargers/Raiders joint proposal was voted down by the full league ownership panel in February.

I will outline the terms of the proposal, the “high points” and then to differentiate the other reporting on this topic, I will focus in on the potential issues with the proposal and the perspective of the parties involved in how this situation got to this point. A comparison will be made to the new stadium deal for the Chargers and what the agreement would look like if the team used the option to move to Los Angeles as a tenant in the Rams new stadium there.

Leaked Proposal

The proposal calls for the following in terms of the financing for the new stadium and convention center:

1. The San Diego Chargers will contribute $650 million to the development of the stadium (important note: the NFL contributes $100 million to any new stadium project and the Chargers will get an additional $100 million from the league as part of an incentive stay in San Diego that was granted to them when the NFL voted against their proposed move to Los Angeles)
2. The government will contribute $350 million to the development of the new stadium and will set up a Joint Public trust essentially to establish municipal ownership of the stadium. Translation: the city will own the stadium. The municipal government will also raise the $800 million for the new convention center.
3. The San Diego Chargers will get all stadium revenues for the 10 – 13 game days that they operate within the facility (includes preseason and playoffs).
4. The City will get all revenues from the rest of the events held at the stadium throughout the remainder of the year.
5. The Chargers will be responsible for all construction cost overruns that may occur.
6. The City of San Diego will finance their portion of the project through bonds and the increase of the hotel tourism tax which will increase from 12.5% to 16.5% this will be for the stadium and the convention center.
7. The increase in hotel tax will “sunset” after a period of 33 years. Then it will decrease to 13.5%
8. The stadium will have 65,000 seats and expected completion date is 2022

Some of that division of asset allocation is pretty standard in the stadium development deals. The construction overruns are usually covered by the team involved in these projects. In the current state of affairs in California where residents feel squeezed by high property taxes and increasing costs of living against flat wage increases, makes the public appetite for a tax increase to build a stadium a complete nonstarter. Therefore, the hotel tourism tax increase was the obvious pathway for both sides in this situation, the team and the politicians, to ensure the best chance for approval of the initiative.

Definite Issues

There are some definite issues with the proposal though which may be more readily discussed in the next few months. The most critical of all is the fact that the neither the Chargers nor the city own the land that the proposed stadium is supposed to occupy. In recent years similar arena or stadium proposals have faced that critical issue as well. In Seattle there is a struggle over land to build a new arena to attract an NBA or NHL team. In Sacramento, the Kings faced some of that push back in their quest for a new downtown facility. The most public dispute was in Brooklyn back when the Nets proposed the Barclays Center in the Atlantic Yards area and the local residents fought back. The government used imminent domain to push people off their property to build the arena.

The assumption could be drawn here that if the proposal has advanced to this stage that one or both parties involved has some kind of “inside track” on gaining the land for this potential use, but that is not always the case. In my view, a huge part of positioning a proposal for development is to make sure you have control of the land in the first place. However, the politics of the situation dictates that if they get this “ball rolling”, then the public will back them to gain control of the land, and that is the card that might be played in this case.

The second issue here is that the Chargers may not have the public approval sentiment necessary to get the citizens’ initiative passed successfully. The public perception of the team took a major negative blow when the team and their owners, the Spanos family, decided to pull up stakes and set their sights on moving to Los Angeles. Some residents feel that the team which has been based in San Diego since 1961 abandoned them for a better potential scenario in LA. The Spanos family now has to return to San Diego and gain a two-thirds majority in this ballot initiative to move forward with the stadium plan. That may not occur, which would set the stage for the team to either explore the longer route to the downtown stadium or exercise their option and move to Los Angeles in 2017.

In the event that the ballot initiative is successful, in fact, in the opinion of others regardless of whether it does or not – the politicians were always more in favor of the Mission Valley stadium proposal because the city owns that land. However, the attached convention center project with the stadium downtown being one component of a larger project which could benefit far more residents, could be the reason that this measure may gain approval.

Charged Up

The Chargers are viewing this situation in two ways: they have always favored the downtown site over the Mission Valley option, and they view the convention center being attached to new stadium as a way to compete with LA and other cities for Super Bowls and other large scale events.

That is a good segue to another point that was neglected from the leaked proposal yesterday: it does not state whether the stadium will have a roof or some kind of retractable cover to it. That type of feature adds a great deal of cost to a stadium development project, but it also enhances the functionality of the facility to be able to host political conventions, NCAA basketball Final Four, and other big revenue generating events.

The proposed new Rams stadium in Inglewood, CA will have a roof to be in consideration for just those sorts of events. The San Diego proposal should consider that design feature for the same rationale, however it could add around $200 million in estimated new costs to the project.

The Chargers, as was mentioned earlier, lost their bid to build a stadium in the LA suburbs, but they still have the opportunity to join the Rams in LA if they cannot get a long term stadium deal brokered in San Diego. The Chargers would be a tenant in the Inglewood stadium which means they would not have an equal share in all the revenues in that arrangement. They would essentially lease the building from the Rams and operate it on game days in that scenario.

Greed Wins

This is the main reason why I have maintained the belief that the Chargers are going to remain in San Diego and get the downtown stadium deal completed. In this agreement with San Diego, the NFL is subsidizing $200 million of the $650 million that the Chargers are contributing to the project. That means that the Spanos family will spend $450 million to get a $1 billion dollar new stadium that they will not have to share with any other team. The Chargers will reap all the football related revenue as well as the profits from any naming rights agreement to the stadium.

The Chargers will also remain in a market where they have established relationships with corporate sponsors and an established fan base of season ticket holders and they would not have to compete with another team for those audiences which they would have to in the event they moved to Los Angeles.

It comes down to greed. The reason why the Chargers will stay in San Diego if this deal gets approved is because they will not have to share revenues with anyone, and the city wants to keep the Chargers and have the new stadium and convention area to lure the Super Bowl and other big events back to San Diego. It is the same reason why the NFL approved the Rams ambitious new Inglewood colossal stadium and real estate venture: greed.

I am not a proponent of cities or counties paying for stadiums or arenas, I think the teams and the leagues involved should finance a portion of it and have private financing for the remainder. The Rams project, for what it is worth, will be fully privately financed. The City of San Diego wants to own the stadium though and has decided that is the right way for them to move forward. There is inherent risk in owning structures of that size and magnitude. That risk must be mitigated by the potential revenue return on the investment. In this case, the studies must have proven that out for San Diego to move ahead with this type of arrangement.

In the end, the November ballot measure will be the next big hurdle for this project to clear. Then, the land ownership piece will come into play. The stage could be set for the Chargers to remain in San Diego in a world class new stadium. The NFL will inevitably be the ultimate winner in that scenario, which I have reported about in the past, and it remains a valid point. Then, the league would just have to figure out what to do with the other team that whiffed on going to Los Angeles: the Raiders, but that is a whole other saga for another time. In the end analysis between the money and power of all of this politics is greed, the fans are used as pawns, in the end the pursuit of greed always wins.

by Frank Maduri

Left Out of L.A. – The Future of the Raiders & Chargers

The recent decision by the NFL ownership to allow the relocation of the Rams to Los Angeles has left two franchises, the Oakland Raiders and the San Diego Chargers, with uncertainty regarding their future in either of those markets. It is rather unusual for a multi-billion dollar entity such as the NFL to have such instability with their franchises, let alone with two of them in the same geographic region.

The Raiders and Chargers also bid to move to Los Angeles in a joint project for a new stadium proposed in Carson, California; this measure was defeated by a resounding vote of the full ownership panel of the NFL. However, as part of the Rams winning bid to gain the foothold into LA, the Chargers have a full calendar year to determine if they will join the Rams in their stadium in Inglewood.

The Chargers have an agreement where they will play the upcoming 2016 season in San Diego and could move to LA in 2017 because they struck a tenant agreement with the Rams. However, many NFL insiders think that it is unlikely that the Chargers would want to move to LA under that deal because they will not be entitled to the full revenues available in the terms of that tenant arrangement.

The Chargers are focusing their efforts on securing a long term stadium solution in San Diego which is anything but a sure bet. The people in San Diego are rather upset (understandably so) at the Chargers ownership for their willingness to move the team to Los Angeles. Both the Chargers and the city politicians are harnessing their energy on passing a citizen’s initiative which is a mechanism in California which allows for the public to vote in a combined measure over the new stadium and the land involved in that project. If the measure successfully passes the public vote, the lengthy environmental review process is voided.

It should be noted that this procedure was the same technique used by Dean Spanos and the Chargers management in gaining a faster approval process for the land in Carson for the proposed stadium there in the “race to LA”. It circumvents the rather cumbersome and time consuming environmental review which could delay the land for a stadium site for development for years.

The stadium quest between the Chargers and the San Diego politicians has revolved around a couple of central issues over the past fifteen years. The first issue is the location of the stadium and the second issue is the funding for the project. When you consider that those are the two main issues to moving a stadium construction forward that is why the two sides have remained in limbo for a decade and a half.

The condensed version of each issue can be summed up in this way. First, the location of the stadium has revolved mainly around two areas of San Diego (I do not believe that the team was ever going to move to the suburbs – that was strictly a tool for leverage by the Spanos family) and both sides have disagreed over that stadium location. The two areas proposed in this situation are: Mission Valley and downtown San Diego.

The essence of the situation regarding the site proposals is that the politicians favored the Chargers build a stadium on the same site in Mission Valley where the current stadium is located. The Spanos family favored the downtown site and wanted similar concessions to those given by the politicians to the Padres ownership when they built the downtown baseball stadium now known as Petco Park.

The second issue is the funding for the site and for many years the Spanos family was trying to gain public dollars for the stadium project by requesting that the politicians attach the new stadium proposal to the measure to renovate the convention center downtown. The politicians refused to combine the two proposals and felt that essentially the family had billions of dollars and should foot the bill for the stadium. The politicians also wanted the stadium in Mission Valley so that stalemate continued for years.

The current situation is still pretty messy. The Chargers formally announced their proposal for a downtown stadium adjoining the convention center site last week. The politicians responded with their rationale behind why they believe the Mission Valley site is a better fit for all sides. The main issue is that the land that the Chargers would need to fulfill the downtown project is not owned by either party in this scenario. The costs, the risks, and the potential for public approval are all significantly greater with the downtown proposal because of the purchase of the land and the associated legal costs. The financing for that endeavor becomes tricky because the public has to vote by a two-thirds majority to approve any ballot initiative that includes a tax increase. The public support may not be there for this project which will set back the entire time frame of getting the stadium built.

Meanwhile, the Mission Valley site is where both the city and the county proposed a $1.1 billion stadium project on land that is city owned. The viewpoint of the city officials is that this project site will provide a smoother and more cost effective option to development of a new stadium. The Chargers, according to ESPN and other news outlets, have been working with JMI which is the same real estate developer that helped the Padres develop Petco Park.

According to JMI they estimate that the cost of the expansion of the convention center and the new football stadium downtown to be at around $1.4 billion. In a move to push back against the city and county officials, JMI claims that the cost to develop both sites, the convention center and the Mission Valley stadium would cost the city close to $1.8 billion dollars for two separate, stand-alone buildings.

The Chargers are pushing for the downtown site for two reasons: better access points for fans and the inclusion of the convention center and the other areas surrounding it in the downtown Gas Lamp district would provide for a great setting for the Super Bowl and other large scale events. The Chargers know that to keep the franchise in San Diego they need to be able to compete with Los Angeles for those big events, and a new stadium in Mission Valley will not achieve that objective. The public vote in November is the next big hurdle in this scenario.

Out of Oakland?

The Oakland Raiders have also been left without a long term solution for a place to call home for their franchise. They did just agree to a new stadium lease that allows them to keep playing in Oakland Coliseum until another arrangement can be made.

The team owner, Mark Davis, has explored relocation to San Antonio and has just met with officials in Las Vegas recently as well. The main issue with remaining in Oakland is that the city and county have basically zero money to allocate for the stadium project and the public appetite towards public finance of a stadium in any form, whether it comes from an increase in a hotel tax or via another mechanism, is not very likely at this point.

Davis has scaled back his proposals to Oakland with the last proposal seeking land for a smaller venue that was more intimate for fans. The Oakland politicians are concerned about the viability of any project because they also feel pressure from Major League Baseball to figure out a new stadium solution for the A’s.

The developers in Oakland had once pitched the Coliseum City project which would have encompassed 800 acres and included new stadiums for both teams. That proposal, which you can read plenty about if you wish because many news outlets in the Bay Area covered it extensively, died out and is no longer an option.

In all my research and in covering both the NFL’s “race to LA” and the Raiders and Chargers over the years, I just do not see a way for the Raiders to stay in Oakland. I also thought they had a slim chance of going to LA because of the grudge that the NFL owners have for the Davis family built over years of hostilities.

Conversely, I have had a gut feeling over the years that the Chargers could wind up staying in San Diego. The community there is very supportive of the team and they have built a history there spanning decades. It is a great city for the Super Bowl because of the climate and location, but it needs an upgraded stadium to host that event in the future. I think that the Chargers could end up making it work there with the downtown site.

In the event that the Chargers and the San Diego officials cannot make it work, then I think the Raiders have a chance of going there next year if the Chargers leave for Los Angeles (they have a one year option to do so). The Raiders could end up going to San Diego and leveraging the city and county into a new stadium once the Chargers have moved on.

The San Antonio option for the Raiders is interesting because Mark Davis owns land halfway between San Antonio and Austin where he could build a stadium and take advantage of a rapidly growing area in football crazy Texas. However, the political NFL reality is that it is unlikely that Dallas Cowboys owner Jerry Jones or Houston Texans owner Bob McNair would vote to approve such a move. They are both powerful owners with friendships with other owners, so Davis probably faces a steep hurdle to gaining approval for that endeavor.

The Las Vegas option is interesting and could gain some traction. The Raiders had discussions there regarding a new project that potentially would build a domed stadium on land on the Vegas Strip for a facility that would be shared by the UNLV football team and an NFL team and cost close around $1 billion. The big casino and hotel resort owners are backing the project because they see the potential for that investment to be paid off by having new visitors who would otherwise not come to Las Vegas. This new untapped customer base could be worth a significant return in hotel rooms and additional tourist dollars for having a stadium capable of hosting large scale events.

Mark Davis came away impressed and called Las Vegas “a global city” so that is speaking directly to the league office which has sought different ways to grow the NFL internationally in recent years (i.e. games played in London, Canada, and Mexico). That is a subtle play by Davis to try to leverage that sentiment from the owners for a potential relocation bid.

In my view, I would be surprised if the Chargers left San Diego at this point, unless the whole thing falls apart with the public financing for the downtown site, because even if the team could play in a bigger market in L.A. they would be sharing that market with the Rams. Furthermore, the Rams will have had a full year in the L.A. market and have gained all the top sponsorships. The Chargers would be a tenant in L.A. and stand to make less on the ancillary revenue streams due to that type of arrangement; where by staying in San Diego they are the only team in the market and they would have their own stadium with full access to more revenue streams.

The situation bears watching as it is very fluid in the case of both franchises involved. The end game will be that both Oakland and San Diego work with the teams to keep them in those markets, or two new cities will be on the NFL map in the future.

by Frank Maduri

NFL To Los Angeles Update: More Twists & Turns

The ongoing quest of the NFL relocation process to Los Angeles took a few more twists and turns recently following a set of meetings between the league, the owners, and the parties from three NFL teams interested in gaining a foothold into the nation’s second largest media market.

 

Those meetings took place in the Chicago area and presentations were made by the Chargers, the Raiders, and the Rams regarding potential relocation to Los Angeles and their respective stadium proposals. I have reported on this topic for a few years now and I can attest that the situation is an evolving one, to put it diplomatically.

 

In order to provide some backdrop for readers who are not aware of the relocation scenario with the NFL and Los Angeles it essentially boils down to back room politics within one of the most profitable sports leagues in the world. The Rams, who initially played in L.A. and moved to St. Louis for a sweetheart deal on a new stadium in the mid-1990s, are now positioning themselves for a move back to Southern California. Their owner, Stan Kroenke, has made a huge land purchase in Inglewood on the site of the former Hollywood Park horseracing track (see my earlier article which focuses exclusively on this deal) with the aim to build a world class football stadium on the site.

 

The Chargers and Raiders moved quickly following Kroenke’s land move to secure land for a joint stadium project in Carson, California which has been fast tracked through the government permit and environmental review stages to be a more “shovel ready” project at this point than the Rams proposal. The Chargers have worked with San Diego (though some in San Diego municipal government claim the Chargers never worked in good faith) on a new stadium for 15 years with no progress being made in that time period.

The Raiders have worked with Oakland for a similar time frame (if not longer) to find an acceptable proposal to replace the aging Coliseum but with no success. The Raiders have positioned themselves well in the “race to L.A.” because they do not want their own stadium, they prefer to be a partner or a tenant in whatever stadium bid gets accepted by the NFL.

 

The NFL would prefer to have two teams in the market and not three, so somebody is going to be left out of this equation, and it is looking more likely that it is not going to be the Raiders. In the mainstream media press conference after the Chicago meetings regarding the L.A. relocation, an NFL Vice President was quoted as stating that the Raiders have no viable way of staying in Oakland.

 

Horse Race

 

The horse race to L.A. was viewed prior to the meetings in Chicago by NFL insiders as scenario where the Chargers/Raiders proposal in Carson being the lead proposal for acceptance by the league ownership. The rationale being that both teams are based in California and have worked diligently to remain in their current markets with no progress seen in that regard.

 

The view prior to the meetings was that Kroenke’s move with the Hollywood Park land purchase was too bold and aggressive. It also should be noted that St. Louis has put together a viable option for a new stadium on the waterfront for the Rams to remain in Missouri that has intrigued NFL owners and league executives.

 

However, according to sources in the mainstream sports media, after the meetings in Chicago it appears that the Rams proposal for the stadium at Hollywood Park in Inglewood has gained significant traction. There is also some movement by San Diego to put together a proposal for a new facility to keep the team from relocating.

It is going to be interesting to see how this plays out between now and the expected official decision on which teams will be in L.A. which is expected in January 2016. The Giants owner, John Mara, stated to the media that he expects a team to be playing in L.A. by 2016 in a temporary venue.

 

Alternate Plans

 

Once the two teams that are approved by the NFL to relocate to Los Angeles are announced, the issue becomes finding a temporary home for the teams while the construction of their long term home is being undertaken. The Rose Bowl has, according to mainstream reports, told the NFL that they are not interested in temporarily hosting a NFL franchise. The LA Coliseum apparently is willing to serve as a temporary venue for a relocated franchise to the city.

 

Then, on Monday, in a strange turn of events, San Antonio has stepped up and announced that they would be willing to host the Raiders temporarily if they get relocated to LA because their lease with Oakland ends at the end of this season. The Carson stadium will not be ready for another two years and the Inglewood stadium could take three years to construct.

 

My first thoughts when I saw this news earlier was that it was strange, but the more I thought about it, it represents a really smart move by San Antonio. The Raiders owner, Mark Davis, has already visited San Antonio and met with officials there as a potential relocation site for the franchise (see my earlier article on the Oakland stadium) though that turned out to be a maneuver to gain leverage so that Oakland would approve funds for a new facility for the team.

 

The scenario in Oakland between the municipal government, county leadership, and the Raiders executives has gone downhill rapidly from bad to worse. The Coliseum is known throughout the league as the worst facility and the appetite in Oakland for spending public funds for a stadium is tepid at best. The NFL beat writer for the Raiders reported to CBS Sports that Mark Davis went to the Oakland officials with a reduced stadium plan purposing an intimate venue with 50,000 seats versus some other NFL stadiums which have close to 70,000 capacity. The smaller facility would have a reduced price tag and environmental impact, the two sides could not come to agreement on that proposal.

 

The Raiders may need a temporary home for a few years until the move to L.A. and it may need to be outside of Oakland with the state of the relationship between both parties. In the hypothetical scenario that the Rams and Raiders are both awarded L.A. relocations by the league, the Rams would most likely play at the LA Coliseum on a temporary basis. It may be difficult to schedule two teams to play at that facility, so that is where San Antonio is making their sales pitch at this point.

 

When you think about it, it makes sense for both sides. The Raiders could gain exposure to a whole new demographic of fans and due to their success earlier in their franchise history they already have a national following, they could add to that fan base by playing in Texas. The NFL let a study gain media attention a couple of weeks ago where there was a survey done of Raiders fans, and the majority said that they would support the team regardless of where they based their operation. It was an obvious placement by the NFL to soften the ground for the LA relocation of the franchise, but it could also play a role for San Antonio to appeal to both the Raiders and the league that they can be a viable temporary home.

 

It makes sense for San Antonio because they would gain tax revenues from the team operations, game days, and an increase in tourism/ hotel stays from the team playing there temporarily for two to three years. The Alamodome would be the site for the games and that facility is undergoing an over $40 million dollar renovation including wider concourses, a new scoreboard, larger locker rooms, and other amenities in preparation for the stadium to host the NCAA basketball Final Four in 2018. The Raiders would be able to play games indoors in an upgraded facility that is far nicer than Oakland Coliseum at this point. The local fans in San Antonio would get NFL football for two to three years right in their city, and the city would be able to show the NFL that they can handle an expansion or other relocated team on a permanent basis down the line.

 

Switching Places

 

On Monday night a report emerged regarding the Chargers – Raiders joint project in Carson. The NFL has reported that if that stadium initiative is accepted by the league, then the teams will no longer remain in the same division, the AFC West in this case, or the same conference. The NFL would realign the teams so that one would most likely join the NFC West.

 

In that scenario, in order to keep the conferences and the divisions evenly balanced in the four divisions with four teams in each conference, another team would have to change conferences as well. Carmen Policy, who is heading up the NFL to LA movement at this point and was heavily involved in the presentations in Chicago related in this report that several intriguing realignment options are on the table at this point.

 

I had thought about this scenario while writing an earlier article on this topic. In many ways, approving the Inglewood project is a much more streamlined process for the NFL because the Rams would relocate to Southern California and remain in the NFC West, and the Raiders would most likely be their co-tenant and remain in the AFC West with no realignment of the league being necessary.

 

However, that still leaves the Chargers in a potentially untenable situation in San Diego, which the NFL certainly internally knows much more about just how dire that situation is, certainly more than I do. That may be the impetus behind the drive for the Carson project, to resolve the Chargers stadium issue  as well as the Raiders issues all in one bold sweeping move.

 

I know that Jason LaComfora of CBS Sports first reported this several months ago, and it is an intriguing idea. He thinks that if the Rams move to LA and the Inglewood project goes ahead and the Rams leave St. Louis, then the team that is left out of the LA market could wind up moving to St. Louis and playing in the new proposed riverfront stadium. In light of recent events, with the NFL open to realignment, all options could be on the table. The Chargers could wind up moving to St. Louis and staying in the AFC West where they would have a regional rival in their division in the Kansas City Chiefs. The Chargers would also still play the Raiders and Broncos in that scenario twice per season as they currently do.

 

In my view, that would be the biggest issue with the Carson project is having to shift multiple teams and realign the league. That would eliminate the rivalry games that NFL fans look forward to from back in the old AFL days, fierce rivalries between the Broncos and Chargers or the Raiders and Chiefs.

 

The other point that I have to mention here is that the NFL does not want 3 teams playing in the Los Angeles market, and if they decide to keep the Rams out (it seems Kroenke is set to go there) how will the league prevent a billionaire from moving the operation of his team from St. Louis to the nation’s second largest media market and the entertainment capital of the world?

 

The issue is further complicated when consideration is given to the fact that the Rams once played in Los Angeles and they have a passionate following and supporters there that want the team to return to Southern California.

 

In that scenario, what happens to St. Louis and their plans for a new riverfront stadium? Some within NFL circles question whether St. Louis deserves another shot at a team because they lost the Cardinals previously, so if the city loses the Rams as well, are they the right market for an NFL team?

 

This situation certainly is a delicate one for the NFL and for three franchises who are vying to gain entry into a coveted and largely untapped marketplace. It will be interesting to see how the NFL, the owners, and the executives from the three teams involved handle the next steps in what has become a race to get NFL football back to Los Angeles.

 

(Some background information courtesy of CBS Sports.com)