The first week of the NFL’s off-season OTA’s—organized team activities—is in the books. You can be sure that battles for roster spots have already begun. While those battles are important for individual players and may portend the success of individual teams, there’s another contest taking shape in the league boardrooms that involves billions of dollars: the fight for the Los Angeles market.
The NFL abandoned the LA market on two occasions, first when the AFL Chargers left for San Diego after the 1960 season and again in 1995 when both the Rams and Raiders left, the former to St. Louis and the latter to Oakland from whence they had come. The second largest media market in the U.S. has been without professional football for two decades. But that’s all about to change. League sources confirm that the NFL is likely to return to LA as soon as the 2016 season.
With zero chance of expansion, relocation seems to be in the cards. What is yet to be decided is which team – or teams – will move. There are three teams and two facilities currently in play. Ironically, the current front runners are the three teams that previously abandoned the market, the Chargers, Rams and Raiders.
San Diego may be more desperate than the other two teams because 25% of their support comes from the LA area. Should two teams—most prognosticators think the NFL wants two teams in the LA market—relocate 100 miles north of them, the Chargers will no doubt suffer financially. Throw in the fact that Chargers’ owner Dean Spanos is well liked among his fellow owners and San Diego appears to be a front runner, especially if they fail to get a new stadium deal. This being professional sports, where backroom politics is as unpredictable as the weather, the possibility of another team – or teams—entering the competition can’t be ruled out.
The game of musical chairs, or teams, is compounded by the fact that all three teams with an interest in LA are also negotiating with their current city for a new stadium. The Rams seem to be the closest to a new deal. St. Louis has proposed a billion dollar stadium along the riverfront to replace 20-year old Edward Jones Dome which was built to lure the Rams to town in ’95. Rams’ owner Stan Kroenke has refused to accept the deal unless the city assumes a greater percentage of the construction cost.
Oakland and San Diego have been negotiating for new stadiums for over a decade. Should either team get left out of the relocation mix it would leave them at the mercy of their current city. Or would it? If the Rams leave, St. Louis could turn its attention to the “loser” of the relocation derby. That would give either the Chargers or Oakland the possibility of a new home or more leverage in their home city. Either way, they win, despite not reaping the benefits of LA.
The cost of relocation is likely to exceed three billion dollars, perhaps as much as four. Kroenke plans to build a new stadium in Inglewood for $1.86 billion. Cost overruns will surely peg the ultimate cost above $2 billion. The Chargers and Raiders are working on a joint facility in Carson City that is estimated to cost $1.7 billion.
In addition to the stadium costs, the league will impose a relocation fee on each team that moves. Speculation on the amount runs upwards of half-a-billion dollars, perhaps as much as $1 billion. While that may sound high, according to Forbes the average value of an NFL team is $1.43 billion and the LA market is the last, great fertile land rush in the U.S. It’s unlikely that a fee of $1 billion—or more—will faze any of the current suitors.
With the 2016 NFL season only 15 months away, a decision will likely be made soon. A team will need 24 affirmative votes (out of 32) to gain approval for a move. Whether the owners will vote on each team individually or two simultaneously is unknown. What is known is the back room politics will be intense and fascinating. The post-approval book chronicling the behind the scenes maneuverings is guaranteed to be a best seller.
(Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is a Professor in the Sport Management Department at SUNY Cortland and maintains the blog: SportsBeyondTheLines.com Jordan can be reached at firstname.lastname@example.org.)