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How about the San Antonio Chargers?

Los Angeles Times op-ed says local team likely won't be moving north

Roger Noll, emeritus economics professor at Stanford, often considered the top expert on pro-sports economics, says, "Expect the Chargers to stay in San Diego." Noll made the statement in an op-ed he wrote today (January 22) in the Los Angeles Times.

One reason: "If the Chargers come to town, the prices the Rams can charge for tickets, luxury boxes, and personal seat licenses will have to drop a bit. The Rams probably will then seek compensation from the Chargers in high rent or control of some revenue sources from the Chargers games," says Noll, who is frequently quoted in the Reader.

Then, if the National Football League seeks a relocation fee of, say $550 million (as Rams owner Stan Kroenke is supposed to have paid), the Chargers relocating to L.A. "has very long odds."

Dean Spanos

Dean Spanos

Stan Kroenke

Stan Kroenke

Perhaps because he is a gentleman, Noll doesn't mention why these costs would deter the Chargers. It's because the Spanos family doesn't have anywhere near the wealth of Kroenke, who is building a stadium worth between $2 billion and $3 billion, surrounded by real estate development —residential units, shopping mall, office, buildings, and a casino (though the NFL says it opposes gambling).

The Spanos family is worth about $1.6 billion, and most of that is in ownership of the Chargers. Kroenke and his wife, a Walton, are probably worth around $12 billion or more.

Noll expects the Chargers to remain in San Diego, but "if they move, it's more plausible that they'll end up in San Antonio or Las Vegas. Or even St. Louis," he writes.

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I thought Jerry Jones resisted any more NFL teams in Texas.

Ponzi: Jones, the owner of the Dallas Cowboys, along with the owner of the Houston Texans, are said to be opposed to any more teams in Texas. But that is speculation. We don't really know if they would block a team moving to San Antonio. Best, Don Bauder

Real estate is the real reason for these stadium scams. In the case of the Chargers, they never explain the problems the new Stadium is meant to fix, except a bigger TV set, and exclusive party rooms for billionaires, so they won't have to mix with the millionaires. They do mention the gigantic condo complex intended for the Stadium land.

Psycholizard: I believe one good solution is for the Chargers to remain in San Diego and play at Qualcomm, which could get a moderate fix-up at the expense of both the team and the city. I think the main need is more bathrooms, particularly ladies' rooms.

I would hope that the Qualcomm rehab wouldn't cost more than about $30 million. Much more than that is too high. This is a matter of priorities. The city has a multi-billion dollar infrastructure deficit. How important is a stadium that will be used ten times a year in the regular season and pre-season, and only a few times more? Best, Don Bauder

A number of well-known sports journalists believe the Chargers may be better off staying in SD than moving in with Stan Kroenke in LA. The relocation fee to LA is huge and they will not be getting what they want with the Inglewood site. But perhaps most importantly, nobody in LA cares about the Chargers.

"The San Diego Chargers should stay right where they are", Bill Plaschke, LA Times http://www.latimes.com/sports/nfl/la-sp-chargers-plaschke-20160120-column.html

"Should the Chargers stay put"? Mike Florio, NBC http://profootballtalk.nbcsports.com/2016/01/20/should-the-chargers-stay-put/

ImJustABill: It is not simply a matter of what the Chargers want. It is a matter of what the Chargers can afford. I suspect (but admittedly don't know definitively) that the Chargers cannot afford Inglewood. Commentators are now putting the price of that stadium well north of $2 billion -- $2.6 billion is a good estimate now.

If the Spanos family insists on L.A., then it should sell the team to a multi-billionaire -- or sell roughly half the team. Best, Don Bauder

So the stadium may end up costing $3B by the time all is said and done, meaning if the Chargers are equal partners they need to come up with $1.5B to be an equal partner PLUS $0.55B for relocation fee. So $2B total to move to LA. Even if (HUGE IF) they can get $2B financing is that all worth it? Would the value of the Chargers really increase by $2B moving from SD / QCOM stadium into Inglewood / Stan's World stadium?

ImJustABill: According to good estimates, the Spanos family is worth $1.6 billion, and most of that represents its ownership stake in the Chargers. Kroenke and his wife are worth more than ten times that.

Of course the Spanos family could not afford to put in half of a $2.6 billion stadium, or even a $1.9 billion stadium (the original estimate) without some fancy accounting prestidigitation. And, of course, it could not afford to pay a $550 million relocation fee, as Kroenke supposedly did by writing a check, unless it was given 30 years or so to pay the fee.

If the Spanos family insists on doing this deal, I think it likely they will have to rent from Kroenke. Supposedly, the NFL is in on the negotiations to make sure Kroenke doesn't fleece the Spanos family. But how much can one expect Kroenke to sacrifice, just to have a partner with nowhere near the money he has?

I believe the Spanos family should sell the team to someone in Kroenke's wealth range. It may be Alex Spanos's wife who is holding up the sale of the team. (Alex is non compos mentis with Alzheimer's.) Best, Don Bauder

There was a discussion thread last story about what constraints there are upon Kroenke in his negotiations with Spanos (or Davis) for setting the terms of partnership / lease to the Chargers (or Raiders) in LA?

I thought that Kroenke originally wanted the LA market to himself but the NFL owners forced him to agree to share with the Chargers or Raiders as part of the agreement.

But if Kroenke can truly set ANY terms he wants then he could just insist on absurd compensation, e.g. charge $1B rent per year. Nobody would possibly take that deal. I would think there must be some agreement in place between Kroenke and the other owners regarding what terms Kroenke would have to accept.

Don Bauder made this same point on an earlier thread but I'm not sure if the question was resolved.

ImJustABill: Yes, I have made the point for some time that the Chargers probably cannot afford what Kroenke demands. The Spanos family just does not have that kind of money. A second problem is that the Spanos family has fouled its nest in San Diego, and possibly could not win a vote for a new stadium.

The answer is to go back to Qualcomm, or to sell the team to a multi-billionaire. There are several in L.A. who might want it as a toy. Best, Don Bauder

Something does seem odd. Keeping the team and moving to LA under the terms that now are in place doesn't seem to be the best option for Spanos - but based on rumors that seems to be the option Spanos is pursuing most vigorously.

I haven't heard much about Spanos trying to sell the team or about Spanos re-engaging negotiations with SD (and starting the big P.R. campaign for their taxpayer handout).

So looking from outside it seems like moving to L.A. while the Spanos family still owns the team is not a good option but that seems to be the only option they are pursuing. It seems either Spanos is making a mistake or there is critical information we don't have.

ImJustABill: Yes, you haven't heard much about Spanos trying to sell the team. I may be the only journalist writing about that possibility, although others may have, too.

Nor is there much discussion of the Chargers trying to get back in good graces with San Diego. San Diegans are quite forgiving; they may cave in to blandishments inflated by big money.

Yes, it appears that right now, the Spanos family is concentrating on L.A. That is logical. It wants to pursue its avaricious dreams first. If they are unattainable, the family may turn to San Diego -- first to get a subsidized stadium, and if that fails, to return to Qualcomm. At the same time, it will consider other markets like London, San Antonio, Las Vegas, or St. Louis.

Again, the best option may be to sell the team while prices are exorbitant. Best, Don Bauder

Michael Mulrenan: Don't blame Fabiani, the hit man lawyer to whom you refer. He was doing just what the Spanos family wanted -- alienating San Diego, so the NFL would buy the argument that the city didn't want the team.

Could the Chargers win the community back? First, they would want a special election in which most voters would not show up. Radical Chargers fans would, in great numbers. Then The Spanoses would have to spend a huge amount on advertising to persuade the public. So the family faces two big roadblocks: 1. It can't afford Kroenke's terms in L.A. 2. It might lose a vote for a new stadium in San Diego.

There are two ways out of this dilemma: 1. Sell the team, or at least half of it, to a multi-billionaire; 2. Continue to play at Qualcomm. Best, Don Bauder

Mike Murphy: Excellent analogy. Best, Don Bauder

Dave Orr: You may well be right. Spanos/Fabiani may have already destroyed the team's relationship with San Diego. That possibility is critical for the Spanos family. Best, Don Bauder

Fred Jacobsen: If memory serves (and it often doesn't these days), there was an NFL team in the 1940s that couldn't get any support in its home city, so it finished the season only playing away games. Then I think it dissolved after the season ended. I think this may have been a Miami team starring a halfback named Buddy Young, but, again, I don't trust my memory on this.

I'll bet danfogel knows. Best, Don Bauder

Don: You might be thinking of the original Dallas Texans in 1952.

aardvark: After writing the entry, I tried looking it up. I didn't get very far. Original Dallas Texans were named in some accounts of those days. Best, Don Bauder

Don: I used Wikipedia. Buddy Young was on that '52 Texans team. Also, according to Wikipedia, those Dallas Texans were the last NFL team to fold.

A little known fact about this team is that it actually folded mid season. The NFL moved the team to Hershey, Pennsylvania, and the team played their last 2 home games there.

danfogel: That might have been what I was trying to pry out of my memory. The team was playing home games away for at least part of its season. Best, Don Bauder+

aardvark: Then it looks like I was at least partly right. Incidentally, Buddy Young was a star in college (University of Illinois) and also in the pros. Best, Don Bauder

don bauder You are partly right, partly wrong and mixing up different teams and different leagues. The Miami Dolphins are the first and only NFL team to play in Miami. There have been several leagues that tried to compete with the NFL. One of them was something called the All-America Football Conference. Although I am familiar with the AAFC and its history with the NFL, I didn’t know that there was a Miami team in that league, one that played only in 1946 and was named the Miami Seahawks. At the end of the first season, the owner went BK and the team was confiscated by the AAFC and its assets were purchased by a group who reorganized it as the original incarnation of the Baltimore Colts. The Colts, along with the Cleveland Browns and the 49er’s merged with the NFL in 1950, but folded after 1 year. There were several teams that merged or folded during the 1940’s, but most of them were due to losing players to WWII service, but as far as I can tell, they all played full home/away schedules; the Miami team actually played almost its entire 2nd half schedule at home. My memory of Buddy Young is that he played for what I thought was the original Baltimore Colts. It seems that while the Colts history went with them to Indy, the NFL doesn’t recognize that first team that played in Baltimore. Young retired before I was born, but I do remember that he was the first black executive hired by a major sports league, as the NFL director of player relations. He did play for the Dallas Texans and the second incarnation of the Baltimore Colts in the NFL, but he got his start playing for the New York Yankees. Not the baseball Yankees, but the pro football Yankees, which was the name of the team before it moved to Texas. Most people probably don’t know about the AAFC, but when they started they had 8 teams, to the NFL's 10, and 2 of them were the New York Yankees and the Brooklyn Dodgers.

danfogel: This is essentially what I learned, although I didn't go into it as thoroughly as you did, as usual. I believe the Chicago Rockets were one of the AAFL teams, and folded. The Cleveland Browns were in a new league when they invaded the territory then occupied by the Cleveland Rams (later the L.A. Rams, the St. Louis Rams, and soon to be L.A. Rams again, I presume.) I think Otto Graham was the star quarterback of the Cleveland team and his presence may have been a reason the team left for L.A.

There was an L.A. team in that league that, if memory serves me right, had Glenn Davis, the former Army star. He was not that good in the pros. That's one reason I believe that the celebrated dynamic duo of Glenn Davis and Doc Blanchard was great against weak competition during the war, but Davis-Blanchard were mediocre players against tough competition. (Blanchard stayed in the military and never played pro.) Best, Don Bauder

don bauder The Rams first season in Los Angeles was the Browns first season in Cleveland, so I don't know about the Rams leaving because of the Browns arrival. Glenn Davis was a great football player at Westpoint. I would say that it would be hard to quantify how much better, if any, those other teams would have been.They did play some good teams and didn't lose a game in 3 years, including 1945 and 1946 when there were no young men going off to war instead of to college. According to an article I read a few years ago after he died, Davis tore up his knee while making a movie, before he served his 3 yrs in the Army. I think that Davis had a good season as a rookie, but tore the knee up again the next year and was done. I'm going to play devil's advocate and say that tearing up his knee after college, spending 3 years in the Army before joining the Rams and then tearing up the knee again in his second year probably accounts for him being "not that good in the pros" and that the "weak " competition in college had little, if anything, to do with his lack of success in the NFL.

I wasn't there, so it's just my opinion.

Opinions vary.

danfogel: You may well be right. But I do think it is logical that Davis and Blanchard were a lot better during the war playing college teams that were depleted. It's intuitive that they wouldn't have been as good when the good players returned. Since Blanchard didn't play pro, and continued his Army career, it's possible that he knew he wouldn't be so good against tougher competition. Best, Don Bauder

don bauder, Actually, he didn't continue his Army career. After he was drafted 3rd overall in the NFL draft, he sought a four-month furloughs from military service in order to play in the N.F.L. After he was turned down, he chose a career in the Air Force and became a fighter pilot. My guess is that after losing 3 years due to his service, he decided that being a fighter pilot wasn't too bad of a gig.

danfogel: i think he retired as a colonel. Best, Don Bauder

I"d say that there is a large probability that an announcement will be made soon that the team has been sold to a very rich buyer. Spanos now has doors open all over the place; the door back to SD isn't closed at all. The fans will be insanely happy if the team plays another season, or two, or several, at Qualcomm. When the Clippers sold for that fat price, it said that ego-motivated billionaires can and will spend nearly anything to have something they want.

I really doubt that Spanos shopping the team would be done in the open. There has to be a place/group of people who can handle such a thing with maximum discretion. The secrecy would be akin to that of the Kissinger trip to China that set up Nixon's visit there in the early 70's. Hard to keep under wraps? Oh, for sure, but not impossible. I'll go as far as to say that there are feelers out and preliminary negotiations underway now to sell the team. Will a deal be made? I have no idea, but I think it is highly probable.

Either that or Deano is far more inept than any NFL team owner in history has been. That would mean he has asked for something he cannot afford, and thus cannot have. And if this plays out as some predict, that's something he should have known already. Is he that dumb?

Visduh: Of course, I agree with you. There is a distinct probability that the Chargers will be sold to a multi-billionaire. I think you are right that there is a good chance that negotiations are going on now -- in fact, may have been going on even before the NFL owners' vote in Houston.

Yes, negotiations such as this would never be in the open. I do think there could be intra-family problems that are blocking the Chargers from selling. Alex Spanos's wife may not want to sell for nostalgia reasons while her husband is still alive, although he is mentally gone. Dean Spanos's children now have top jobs in the Chargers organization. They won't want to give them up, as they would probably be forced to do if the team were sold. There are other members of the family who don't seem to be connected with the Chargers and may just want the money.

When all of us estimate the wealth of billionaires (or multimillionaires) there is one imponderable: how much money is stashed in tax and secrecy havens in Europe, the Caribbean or elsewhere? We can guess how much a plutocrat is worth, but the offshore havens are black holes, as they are meant to be. Best, Don Bauder

Flapper: Through the years, I have done many columns on offshore tax and secrecy havens. I don't remember any that referred specifically to pro sports team owners, however. Best, Don Bauder

don bauder My prediction is that within the next few week, probably no later than March, the Chargers will announce their agreement with Kroenke to move to Los Angeles. I think it is possible that they will play the 2016 season in San Diego and then relocate for the 2017 season. I think that the Raiders will then relocate to San Diego. I'm guessing that they would move in time for the 2018 season with San Diego agreeing to spend some money to spruce up Qualcomm a bit. That being said, if the Chargers can make arrangement for playing in Los Angeles this season, then the Raiders timetable would move up by a year.. Oakland is smart enough to not give the Raiders any subsidies for a stadium, while San Diego is has proven it is just dumb enough to go ahead and do it.

That's just my opinion.

Opinions vary.

danfogel: I think Oakland won't give money to the Raiders more because the city is so rundown than because its leadership is smart. Maybe one could say that the leadership is just smart enough to realize that the city is so rundown that the pols would be run out of office if the city subsidized the Raiders. How is that for a comprormise?

San Diego is also rundown to the extent that there is a massive infrastructure deficit. But leaders figure they can finesse that. Could they? Who knows? Best, Don Bauder

I think you are on to something Visduh.

I just checked ebay - I didn't see any listings for "NFL team with rights to move to LA" starting bid $1.5B. As you say, the marketing / negotiation process for sale of an NFL team would be a lot more secretive than that.

ImJustABill: The negotiations would be completely secretive. Best, Don Bauder

Sale of either the Chargers or the Raiders will trigger huge tax liabilities. The forced Clippers sale cost the Sterlings over 500M in taxes. Then, in the case of the Chargers, Estate taxes on the death of Alex could be very steap also

ImJustABill: Have you tried Craigslist? Best, Don Bauder

So if the Chargers are sold, is the permission slip to move to LA from the NFL completely transferable to a new ownership group?

Does anybody know about the wording of the permission to move to LA? If ownership changes would the timing and other terms of the permission period still be the same?

ImJustABill: I don't know the wording and I am not sure anybody other than NFL owners and administrators know.

I would guess that the deal mentions the Chargers but not the current owner of the Chargers. I even suspect that the owners, in that 30-2 vote, were hoping that both the Spanos and Davis families would sell their teams. Remember, I said "suspect." Best, Don Bauder

Don, you are right. NFL and its billionaire owners do not consider either Mark Davis or Dean Spanos part of their "Club". Both men have inherited their teams and not shown any business acumen on their own. Without inheriting their teams, it is doubtful either man or their families would be involved in the NFL in any way, shape or form. The NFL's actions with regard to the LA market appear to be a "shakeout" or "shakedown" if you prefer. The "Buyin" for this poker game (550M entry fee into LA and at least half the cost and/or credit to build the multibillion dollar multi team sports facility in LA) may leave both Spanos and Davis outside of this high stakes poker game. If the Rams or the Raiders really want to move to LA, then it may require selling close to half their team or more to deep pocketed investors. I cannot imagine any billionaire or hedge fund pouring a billion or more into either the Chargers or the Raiders to compete in LA without demanding controlling ownership interest in either team.

SportsFan0000: Agreed. Remember all those media stories saying that Spanos had all these buddies among the 32 NFL owners? The way the mainstream media talked at one time, Carson was a shoo-in because the owners didn't like Kroenke.

Personal likes and dislikes are always trumped when money is on the table. And Kroenke allegedly wrote a check for his $550 million relocation fee. That was big bucks in every owner's pocket. Who would let a little thing like personal animus get in the way of quick millions? Best, Don Bauder

Raiders (Mark Davis) already own land in San Antonio. Raiders have 12 corporate sponsors there that want them to move the team to San Antonio. Red McCoombs billonaire former owner of the Minnesota Vikings and San Antonio resident is pushing hard for a Raiders move to San Antonio.

Raiders/Davis may be too "cash poor" to pull off a partnership deal with Kronke/Rams in LA. (Chargers are facing many of the same issues with an LA relocation).

SportsFan0000: I didn't know the Raiders have land in San Antonio. Would the wild Oakland fans travel to San Antonio to continue following their team? Best, Don Bauder

Raiders have already secured land in the Austin/San Antonio area for a potential stadium. With the Alamodome already in place, this strongly suggests that the Raiders could be playing in Texas as soon as next season.

SportsFan0000: Except the owners of the Dallas and Houston teams may not approve. This has been rumored but we have no idea if it is true. Best, Don Bauder

The land is between San Antonio and Austin. Red McCoombs has lined up investors. He has told Mark Davis that he could bring in moneybags guys even take partial ownership in the team or let Davis keep 100% of the team...they appear to be flexible. Unless the Raiders have some investor/Angels in LA waiting for the Chargers deal to go sideways, then San Antonio looks like a viable option especially since the Raiders could termporarily play in the Alamodome that is already in operation.

It will be somewhat difficult for Mark Davis to retain 100 percent ownership of the Raiders when he only has a 47 percent ownership now.

danfogel: Yes, it is my understanding that Mark Davis and his mother, Al's widow, own 47 percent of the Raiders. Other owners include some hedge fund people. Best, Don Bauder

danfogel: I should add that I think -- remember, "I think" -- that although they own less than 50 percent of the Raiders, Mark Davis and his mother are granted control of the franchise. Best, Don Bauder

don bauder You are correct. When Al Davis sold 20 percent of his ownership in 2007, part of the deal was contractually guaranteeing Big Al and his heirs controlling interest.

I believe that "I believe" is the most appropriate phrase.

Flapper; The late Frankie Laine (spelling?), who retired to Rancho Santa Fe, sang the song, "I believe." One line was "I believe for every drop of rain that falls, a flower grows." Even as a high schooler, that sounded like an awful lot of flowers. to me. Best, Don Bauder

Well, at least that's what he or the song-writer believed, but it took thinking for you to question them. I would tend to agree with your conclusion, so I believe you are more right than they.

Flapper: Yeah, but they made a helluva lot of money on that song. Who cares about a little white lie when there is money at stake? Best, Don Bauder

SportsFan0000. I think one could say that San Antonio has a chance of getting a team fairly soon if things fall just right in L.A. Best, Don Bauder

According to Steve Hartman (1360 AM) a high-ranking Rams official says the talks between Kroenke and Spanos have "stalled".

http://profootballtalk.nbcsports.com/2016/01/25/report-rams-chargers-at-impasse-over-l-a-move/?ocid=Yahoo&partner=ya5nbcs

Kroenke and Spanos don't like each other. Kroenke does not want Spanos as a full partner. Don't know if NFL would force a partnership or Kroenke could make the terms so onerous that the Chargers seek other options.

SportsFan0000: Yes, I think it is clear that there is animosity between Kroenke and Spanos. However, in negotiations such as these, the most important variable is MONEY. Interpersonal feelings take a back seat to bucks. Best, Don Bauder

don bauder I think it is important to remember that while the animosity between Spanos and Kreonke is no secret, neither is directly involved in the negotiations at this point. Also keep in mind that the basic parameters under which the agreement must fall have already been laid out; they were part of the proposal that was approved by the owners and they have to be followed.

ImJustABill: If in fact the talks have stalled, as a radio announcer allegedly says, this is not surprising, given the vast difference in wealth of the Spanos and Kroenke families. Best, Don Bauder

Kroenke wants LA to himself. So, if the Chargers pass, it is very likely that Kroenke offers a bad deal to the Raiders also, that they reject.

If the Raiders wanted to be a Tenant in a Stadium then they could just make a deal with the 49ers and play in their new Stadium in the Bay Area.. Levi Field in Santa Clara.

Raiders are currently on record as against sharing a stadium in Santa Clara with the 49ers (like the Jets/Giants setup in New Jersey). The NFL would be in favor of such a set up if they could get the Raiders to agree.

All 3 teams are looking to make a cash killing in whatever market they land in.

I am not seeing how the Chargers improve their situation financially by staying in San Diego and that appears to be the whole point of this game of musical chairs/stadiums.

SportsFan0000: There are Missourians who have known Kroenke a long time and think he definitely wants the stadium to himself, particularly in the early years, despite what he has allegedly told the NFL. Those Missourians think it is an ego-driven position. However, from an economic perspective, it makes sense to test the water with one team before jumping in with another. Best, Don Bauder

Kathryn Robertson: Yes, the Chargers were losers this season. On the other hand, the Rams have been losers for around a decade or more. Best, Don Bauder

Architect Dan Meis (apparently he has a lot of expertise in stadium construction) says that QCOM Stadium can be restored to a level suitable for Super Bowls for $500M.

http://www.insidesocal.com/nfl/2016/01/28/world-renowned-architect-qualcomm-stadium-can-be-renovated/

From an interview on XTRA 1360:

" Judson: Dan, hypothetically speaking, if I cut you a check for $500 million…could you make the Q something the NFL would say ‘okay, we would host a Super Bowl here?’

Meis: “No doubt, no doubt. It could definitely be done.” "

ImJustABill: If the Chargers pay the $500 million, I am all for it. Best, Don Bauder

An old familiar song. Once you get the ok, there's no way to back out of "cost overruns."

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