Chargers: Look at Petco Park Failure

Padres attendance is worse than it was at Qualcomm, even though the team had a great 2010 season and is slashing ticket and concession prices. So why do the Chargers want a stadium a stone’s throw from Petco, which is not working out for the Padres?

There are several theories on this, but the most salient one is that the Chargers really don’t want a stadium downtown. They prefer to occupy a stadium in Los Angeles, but because that is no sure thing, they want the backup possibility of remaining in San Diego. Since the team intends to put only $200 million into the proposed new local stadium, and taxpayers of an insolvent city would have to pick up the rest (at least $500 million and probably more like $700 million), what’s to lose by lobbying for a highly subsidized facility?

Although pro baseball and football respond to different economic forces, the Chargers should be paying attention to the Padres’ attendance afflictions.

During the 2010 season, when the Padres were in first place in the National League West for most of the season and were in play-off contention until the last day of the season, attendance averaged 26,318, up modestly from 23,699 in 2009, when the team had a losing season. But between 2000 and 2003, when the woeful Padres won 285 games and lost 363 and were last in the league three times and next to last once, attendance at Qualcomm averaged 27,720 — more than 1000 a game higher than in 2010 at Petco, when the team was in first place most of the year.

Even in 2002 at Qualcomm, when the last-place team won 66 games and lost 96, attendance averaged 27,415 — much better than last season at Petco, when the team went 90–72.

Attendance surged when the Padres opened Petco in 2004 but steadily dropped off, even though the team won two National League West titles during the period.

The Padres dropped ticket prices an average 27 percent in 2009 and 15.4 percent in 2010, according to the publisher of sports marketing information, Team Marketing Report. The team will lower prices again for 2011 — for example, the number of tickets costing less than $18 will go up 65 percent. The Padres have slashed concession prices dramatically too, according to Team Marketing Report.

Observers cite a number of factors for declining attendance: parking and traffic are much worse than at Qualcomm; despite the cuts, prices are still quite high; the recession hurts; tailgating is difficult; it’s a pitcher’s park and fans may prefer the long ball, among many things. The trading away of star slugger and hometown hero Adrian Gonzalez will not help 2011 attendance.

The top line has suffered, but the bottom line is another story. According to Forbes magazine, the Padres were worth $226 million in 2003. They were worth $408 million in 2010. That’s a hefty return during a period when other assets rattled along a rocky road. The team payroll dropped from $73.7 million in 2008 to $38.2 million in 2010.

Petco has basically followed the trend of other new parks: owners jack up prices tremendously for the initial novelty period, but then comes a steady falloff. “Petco Park hasn’t done all that badly compared to other parks,” says Neil deMause, who runs the website fieldofschemes.com. “The typical baseball-stadium honeymoon is two to eight years, depending on how the team does on the field.”

Says Rodney Fort, a sports economist at the University of Michigan who formerly lived in San Diego, “There is so much to do in San Diego. I suspect it is these other activities that drive much of the attendance issue for the Padres.”

Some of the Padres’ downtown problems would not be so nettlesome for the Chargers should they succeed in getting their downtown stadium. Traffic and parking might not be so bad on Sundays, for example.

Because in pro football there are far fewer games and more TV revenue than in baseball, says deMause, “You could put an NFL stadium in Kuala Lumpur and still make money so long as you could sell half a million tickets and get a share of national TV money.”

However, the differences between the Los Angeles and San Diego markets are stark. The L.A. metro market is 12.9 million versus 3.1 million in San Diego. More significantly, the Los Angeles market is home to the entertainment industry, which doesn’t suffer from the kind of foreign competition plaguing other industries. Los Angeles is satiated with billionaires. Any team locating there will have the pricing power to utilize such ploys as multiple luxury boxes and very expensive club seats.

Since back in the mid-1990s, when the Chargers lobbied for and received the makeover of the stadium now named Qualcomm, the team has left a trail proving that its first love is Los Angeles. Its original contract had a clause permitting it to shop the team around; when it agreed to drop the unpopular 60,000-seat guarantee, the team wangled three-month windows every year to announce any relocation; the cost of a notice of termination has dropped sharply; and there is no requirement that the team disclose that it is negotiating or has already signed a commitment to relocate. “Why would the Chargers ask for provisions like that if they are not intending to move?” asks former councilmember Bruce Henderson, who warned from the outset that the contracts San Diego was signing were “road maps to Los Angeles.” But he was vilified — and still is.

The economics of pro baseball and pro football differ. Consider: the two teams with the highest-priced tickets and concessions in baseball are the Boston Red Sox and Chicago Cubs. Their ballparks opened in 1912 and 1914, respectively. According to Forbes, the Red Sox are the second-richest team in baseball, worth $870 million, and the Cubs are fifth, worth $726 million. Football is a different story. The Dallas Cowboys, who have an obscenely glitzy new stadium, sport the highest-priced tickets and concessions and are worth the most in the league at $1.8 billion. The National Football League is hinting to Atlanta that it won’t get further Super Bowls because its stadium is so ancient. It’s all of 18 years old.

Former city attorney Mike Aguirre, who also warned that the Chargers contracts were the team’s ticket to Los Angeles, notes that Qualcomm seats 70,500 and the new stadium would seat 62,000. The Chargers would have to raise prices inordinately, and the Padres’ experience at Petco suggests that would be difficult in San Diego, where incomes are moderately above the national norm but the cost of living is far above average. San Diego is not loaded with billionaires or companies with money to burn on luxury boxes.

“San Diego is [the Chargers’] second choice; their first choice is L.A.,” says Aguirre. But everybody knows that — except San Diegans, who apparently enjoy getting fooled twice, three times, four times, five times…

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two reasons I don't go as often as I did when they were at Jack Murphy/QualComm:



Ticket Prices

Remember that John Moores promised that he would keep ticket and concession prices low. Of course, he never intended to do that, and didn't. This is the baseball park scam: raise the prices during the early, novelty years. Then as the novelty wears off and attendance plunges, lower the prices. Note that Moores promised he would spend more on players and actually slashed the payroll. I would also add that opponents of the massive Petco subsidy always pointed out that traffic and parking downtown would be much worse than at Qualcomm, which is ideally located and has abundant parking. Best, Don Bauder

Padres fans feel like they were bamboozled by ownership.

Moores gets huge amounts of city land for development downtown and a sweatheart deal at taxpayers expense for the new Petco Park. Moores/Padres promised to spend money and increase payroll once the new stadium was in place to be competitive every year.

Padres payroll has gone down since they left the Q and is actually vying with Pittsburgh and KC for the lowest payroll in MLB. The 38M figure the publicly release for 2010 is inflated. Padres payroll was essentially under 30M.

New ownership is similar to the old "Gang of 13" from the Tom Werner era----penny pinching----too cheap and essentially financing the purchase of the team off of fan generated revenues and not putting the $$$$ back into the team to build a contender.

Fans have stayed away because they are not stupid. They know the team was not "built to win". Moraad was waiting for the team to tank so they could unload Gonzalez and Heath Bell and pocket the $$$$.

Fans did not believe the team would make the playoffs with its very thin roster.

Once owership shows it is serious, credible and with a long range plan to win, then the fans will be back.

Moores is said to have raked in $700 million to close to a billion on ballpark area real estate. He sold the land that he got at early 1990s prices to condo developers. But the condos are barely occupied. As you point out, the payroll is one of the lowest in Major League Baseball. Oh, the lies that were told in that 1998 election! The ballpark was to be revenue neutral; hotel tax receipts would service the bonds. Bureaucrats later admitted to a grand jury that they had been pressured to jiggle those numbers to make it look like TOT revenues would service the bonds. Best, Don Bauder

Once owership shows it is serious, credible and with a long range plan to win, then the fans will be back.


And when will an owner get serious?? Werner had a fire sale back in 93-that was 18 years ago, same is going on today, and most likely will be happening 18 years from now too.

Remember: it is not a game. It is a business. A ruthless one. I guess you could say that the name of the game is that pro sports isn't a game. Best, Don Bauder

I don't think the AEG group is going to do anything about an LA stadium until the NFLPA signs a new agreement with the owners. If an agreement is reached look for the moving vans out of Mission Valley in the middle of the night

The league is saying that it's optimistic that there will be a deal, and no strike or lockout in 2011. I haven't heard the players union say that, although I may have missed it. Best, Don Bauder

I was curious about something. If stadiums are bad investments then why are the folks at AEG rushing to build one in Los Angeles with little public financing? I'm guessing that Phil Anschutz made some pretty smart business decisions to become a billionaire. Why would he decide to invest in something that is going to lose money? Is there something that he knows that the rest of us are missing?

I was curious about something. If stadiums are bad investments then why are the folks at AEG rushing to build one in Los Angeles with little public financing? I'm guessing that Phil Anschutz made some pretty smart business decisions to become a billionaire. Why would he decide to invest in something that is going to lose money? Is there something that he knows that the rest of us are missing?


LOL...and what makes you think "AEG [is]rushing to build one in Los Angeles with little public financing"??????

Because THEY said so! You make funny, that was not very funny. They are not rushing to do anything, much elss buld a stadium with their own money. BTW, they "became billionaires" fleecing muni's out of free money to build stadiums.

See my offer above-put money where mouth is alfromcbad.

Los Angeles has already said it is through giving subsidies to pro sports facilities. I think Anschutz and his co-investors probably will have to put up the capital, although LA might pay for infrastructure. Also, the part of the stadium that is tied to the convention center might be subsidized by the government. That does give AEG some wiggle room to suck on the government teat. Best, Don Bauder

You have posed a wonderfully perceptive question. When billionaire owners are begging a city for a huge stadium subsidy, they always say that it won't pencil out without government help. If they don't get a subsidy, they will have to move. But when governments put their foot down -- e.g. New England Patriots, San Francisco Giants -- the owners back down and put their own capital in to build it. And they make oodles of money. Best, Don Bauder

You're nuts. Petco is one of the easiest stadiums to get in and out of. Traffic and parking should not come up as an excuse not to attend a Padre game. The fact of the matter is Padre fans are not going to show up for games until they feel like ownership lives up to their end of the bargain by putting out a winning team. Not a good team, not a team that almost gets to the playoffs or even a team that gets to the playoffs. We want a team that we feel has a chance to win it all. Take the Angels for example. The stadium offers nothing compared to Petco. Parking is expensive and traffic is bad. But the Angels get close to filling up that stadium every night because they field a team that COULD win it all. They pay to bring in free agents and they pay to keep the good talent they have. The Padre front office displays nothing of the sort. The Pads are content with being being a second or even third tier team and keeping overhead low and winning in the pocket book. The Chargers are different. Fans flock to the games at Qualcomm not because of the cheap $90 ticket, the $9 beer or the $20 parking but rather because of the organization, although maybe not dedicated to SD, the Chargers are dedicated to winning. The bolts pay to bring decent talent in but more importantly pay to keep the super stars they have. The Chargers may not win the Super Bowl this year but we still go to the games because we know if some things go our way, we COULD win it all. Bring the Chargers to downtown and watch that stadium fill up.

Chargers tickets are slightly above the NFL average. If they get a highly-subsidized stadium that seats only 62,000, they will have to raise ticket prices considerably. Pro football is very cyclical. Teams are good for a stretch of several years and then fall off. The draft is one of several reasons for this. By the time that stadium is built (and I don't think it will ever be) the Chargers could be bad again, as they have been so often. Best, Don Bauder

The Chargers are different. Fans flock to the games at Qualcomm not because of the cheap $90 ticket, the $9 beer or the $20 parking but rather because of the organization, although maybe not dedicated to SD

I guess you were not here when they lost Bobby Ross in 1996, and the 8 years after that, or the 10 years before Ross where they had 6 head coaches in those 10 years.

Even today the Chargers are not selling out every home game, and they have won the division the last 5 years straight.

The Chargers have been one of the worst run teams in the NFL the last 20 years, not whithstanding they have been incredibly lucky the last few years because of an extra ordinary talented QB, TE and RB.

The Chargers have been quite good over the last six years or so. But in the early part of the century, they were not good. For many of the Spanos years the Chargers were so-so or simply lousy. But that's not all the team management's fault. The draft and other NFL procedures are great equalizers. Best, Don Bauder

Bring the Chargers to downtown and watch that stadium fill up.

Exactly what the Padres said-how did that work out???

Won't ever happen.

There will be no stadium and even if one were built the Charges would go into the tank the second it was completed.


Mr. Fabiani said the Chargers and the NFL would put $400 million into a new stadium, the previous private investment was $300 million. Also said the deal has to be a win for the team and taxpayers.

p.s. What is the secret to creating live links?


I put down at least one space before and two spaces after to insure that the editor recognizes any text starting with ""http://" as a link... something somebody else clued me into!

Leaving out spaces at the end sometimes causes the link to include extra characters such as assumed end-of-paragraph tags, so that some links end with the mysterious "<p" or something similar...

I am confused by this post. Best, Don Bauder

It's just a way of putting active links into comments as requested by laplayaheritage. Of course, I'm known for causing confusion!

As I was writing this column, I emailed Fabiani about how much money the Chargers were willing to put in. It was $200 million. The Chargers say the NFL will put in an amount, but the fund that is used for such projects has run dry. The Chargers believe it can be pumped up. I never heard that the NFL would give $200 million. I think the most I heard is $100 million. It would be wise to count on nothing from the NFL. Best, Don Bauder

The live links talk is going right over my head. Best, Don Bauder

RE "You're nuts. Petco is one of the easiest stadiums to get in and out of":

It's easy to do that when nobody goes to the games. There's nothing but 2-lane surface streets for blocks around except for Harbor Drive, and that hasn't been improved since sometime deep in the last millennium.

There are good reasons why so many fans arrive by trolley... and the bars up in the Gaslamp District are counting on sellout fans (if and when that happens) not being able to get out of there all that fast.

These answers may be valid but don't address the cost of parking, which is a problem. Best, Don Bauder

You're nuts. Petco is one of the easiest stadiums to get in and out of":

Here is a reply off the link that laplayaheritage posted at 6;47 PM, this reply is posted on the webpage that was linked;

tompen | November 22, 2010 at 12:26 p.m. ― 1 month ago

"If Petco Park is any example, there should not be consideration of building a new stadium downtown without solving the traffic problem. I am a season ticket holder for the Padres too, on game days with big attendance, the Imperial Ave. exit backs up the right lane all the way back to Interstate 8 creating a huge traffic hazard. And that's the short way to get into the parking."

And how much money does the city or the state have to solve the traffic problem? Zero. Wait until you see what the rain has done to the potholes. Best, Don Bauder

In a few years, if what I think will happen to the economy happens (more of NO JOBS), then the inner City of San Diego will not be a place that many will want to drive into or out of, especially late at night!

This will add an entirely new dimension to the Downtown Stadium dilemma!

HiDef, Giant Screen, 3D SurroundSound without all the ripoff prices and all the hassles of traveling to and from the game, especially since there will not be the tailgating party's for all to enjoy will completely change the Stadium dynamic several years from now!

Of course, the Padres aim for an upscale audience. Double-digit unemployment doesn't bother management. One of the advantages of Qualcomm is that tickets and parking were reasonable, and a game could be a reasonably-priced day or evening entertainment. That's no longer true, even with the price slashes that began in 2009. Remember, we have a plutonomy (economy run for and by the rich) as well as a plutocracy (government by the rich). Best, Don Bauder

Agreed, but my point is that "getting" to and from the game will become much more of an ordeal than in the past; especially when huge numbers of folks are standing in the streets with their hand out!

Personal safety in the future, will be several orders of magnitude more important than it is right now! Only so many security escorts can be on the street at one time before they start slowing each other down...

Mexico City is a great example of what San Diego may look like very soon, now that our City is being run by and for the Ultra Wealthy!

Mexico City? Ouch! Things aren't that bad. Best, Don Bauder

How much does the city lose on PetCo each year?

We're paying those bonds until 2032?

Yet the fanatics continue their blue-faced screaming that this is a wonderful deal...look at Dean Calbreath's hilarious article in the UT claiming football makes lots of money for the city.

Isn't it time to ignore the fanatics and liars, and listen to common sense?

Most folks like to talk but few like to listen!

The city loses $20 million to $25 million yearly on Petco. It also loses on Qualcomm, but if a new stadium is built, the loss would be far, far larger. I do not know how the insolvent city could finance a subsidy of $500 million to $700 million. It would take a huge amount of building downtown to throw off income to service those bonds, but commercial real estate is already massively overbuilt. Have you looked at the number of hotels going under? Best, Don Bauder

SP's Right On

"It would take a huge amount of building downtown to throw off income to service those bonds, but commercial real estate is already massively overbuilt."

The entire City of San Diego will have to pay for this $PORT$ "gift" that will never stop "Taking" money, not just Downtown!

Well said. The entire city would have to pay for this stadium that would benefit only a small group -- particularly the billionaire owners of the Chargers. Best, Don Bauder

I do not know how the insolvent city could finance a subsidy of $500 million to $700 million.

It can't. It couldn't even pay the $68 million in 1996 for the refurbished Jack Murphy, so how could it possibly pay for 10 tiems that amount today. Besides Susan Golding promised the chargers would stay put until 2020 if the Murph were upgraded, and Golding and Spanos would not babozzle the taxpayers would they? . .

It would take a huge amount of building downtown to throw off income to service those bonds, but commercial real estate is already massively overbuilt

Commercial real estate is in the toilet so bad it will take a decade or more to recover. The CAP rates have fallen thru the floor.

Warren Buffet was on a morning business channel today and said the exact same thing. Sell your shares in CB Richard Ellis, Cushman Wakefield, Jones Lang LaSalle and Grubb and Ellis.

And buy shares in all the Security services in town, as they will be the only ones raking it in!

There is a lot of work to be done on infrastructure, potholes, other maintenance, streets, sewers, etc. They have been long neglected by Murphy and Sanders. So there is a lot of work to do. But would you have your company doing that work if you suspected you would never get paid? Best, Don Bauder

Keep this in mind: Susan Golding was running for U.S. Senate. She was given great support by both Spanos and Moores. So she destroyed the City of San Diego's finances for her self-aggrandizement. Thank goodness, she didn't get anywhere in her Senate run. Best, Don Bauder

Yes, but we now have Kehoe and Atkins in the State Capitol!

Thank goodness, she didn't get anywhere in her Senate run.

LOL...Goldings senate hopes evaporated before she even ran....there was a scandal that sank her but for the life of me I cannot recall what it was.......

I can't even recall that there was a scandal at that time. Suppose she would have run for the Senate and -- God help us -- won. She would have been in office, probably, when people learned she had drained the pension fund to pay for the Republican convention at which she was showcased. Best, Don Bauder

Thinking back on it I think it was the Chargers stadium expansion. It turned into a hot potatoe and she never recovered from it since it happened in her own backyard.

There was the lawsuit that slowed it down, and then costs increased from $60 million to $78 million-and that is when Qualcomm stepped in and paid/covered $18 million for naming rights-all of it upfront.

I agree that the entire stadium episode was a scandal, but I didn't think that was what killed her Senate hopes. The really unpopular move was the 60,000 seat guarantee. Best, Don Bauder

The really unpopular move was the 60,000 seat guarantee.

The ticket guarantee (really, who would agree to something that stoopid??? the fix was in on it) was not even known until a few years into the deal after they fired Bobby Ross and the team went into the toilet for 10 years, and most if not all the games failed to sell out. Then people were PO'd about that welfare ticket guarantee.

The scandal that involved Golding was that of her husband, Silberman, and his money laundering. Oh, the media and all the local pols tried to pretend that none of the taint rubbed off on her. Beyond that, she just wasn't a compelling candidate statewide. Her "cute" was fading fast, she let her weight balloon, and when the facade of good looks was gone, there was nothing behind it. Of course, look what we have elected and reelected from California. Would she be any worse, or less connected to reality?

I'm trying to remember the timing of the money laundering case against Silberman. (I wrote a lot about it, and remember it embarrassed Golding, but, again, the dates of that long-running episode escape me at the moment.) They divorced at some point. Somebody could easily fill the blanks through Google. Best, Don Bauder

The Silberman fiasco was before Golding made her senate run. I am thinking the Chargers stadium deal is what torpedoed her senate run. That deal ran into so much opposition-you being the most vocal- there were just too many problems with it- that deal had as many people opposed to the welfare as were for it......

I'd like to think a stadium swindle buried a politician, but I don't think that's what did Golding in. Yes, a lot of people recognized the deal for what it was, but I think Golding just destroyed herself in her run. Best, Don Bauder

RE: d like to think a stadium swindle buried a politician...

How about having it happen to Sanders?

If the current proposed stadium scam buries Sanders, San Diego will be much better off. Best, Don Bauder

The traffic is terrible to get into the Padres games, especially day games. I take I-5 south to Imperial exit and the slow lane of the freeway can be backed up all the way to I-8, creating a safety hazard. They should turn Imperial into a one-way street on the way in, and reverse it on the way out. That way they could get the cars off the freeway, but of course, they still have buses trying to get to the transit center so it's a complete mess. Why would the Chargers want to go downtown? They draw far more traffic and have difficulty managing even with the much better access at Qualcomm.

That's good information -- similar to what I have heard from others. The parking and traffic are terrible for Petco. The traffic might even be worse for the Chargers. Chargers parking might not be so bad, however, on a Sunday. But you can almost be certain that ticket and concession prices will soar inordinately, since 8,000 fewer seats are planned than there are now at Qualcomm. And prices are always jacked up at new facilities. Best, Don Bauder

Downtown + New Stadium = New Income Stream + New $D Contract + $$$

I was answering: "Why would the Chargers want to go downtown?"

They will not go Bankrupt,

but the City of SD already is!

Again, there is a good question whether the Chargers really want that goofy downtown stadium. It's clear the team prefers LA, but wants a backup in San Diego if it can't pull off LA (and that's possible). The idea of the technically insolvent City of San Diego putting $500 million to $700 million or more into a subsidy for a billionaire family is so preposterous that even some fans may realize it can't be done. So the Chargers could then go to other owners and say that San Diego clearly didn't want them. And then the other owners would permit them to pack up for LA. Best, Don Bauder

Maybe if they just had a great season, but as it stands now, I think the Chargers have lost a big bargaining "chip" being a winner!

One of the reasons the Padres got the vote by an overwhelming 60-40 in 1998 was that Moores rented a great team for that season. It went to the world series. Stacking a team for one season is difficult in the NFL, which has so many equalizers. Also, with the threat of a strike or lockout hanging over 2011, the team would have to know whether to plan for a great 2012 or 2013. Best, Don Bauder

We don' need no stinkin' futbol nor no beisbol! They ain't bean berry, berry good to me! One thing I would be with the GOP on if there was evidence that they really, really meant it--cut unnecessary expenses. If the fan-atic base can't support it, OUT, damn sports! Our blood is on their jerseys--no offense to cows . . . We've got high school and college teams, that have real home-boys--well, sorta.

Friends, Roamans, and city-hick/hack suckers, lend me yer ears--we don' need more moores, we need more mores! We should all go down and take over the stadiums and orate until the rico-bums and their boors leave!

Creatively said. The people who are fanatically attached to pro sports, along with the businesses that supposedly will profit from it, should pay for a stadium. However, don't expect the businesses to chip in. They know, but won't admit, that the stadium doesn't help their businesses at all. Best, Don Bauder

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