MP: Ryan Leaf?
BH: Ryan Leaf. Who everyone apparently knew was a difficult personality. And now he's turned out to be worse than a difficult personality, and they've had to try to find other quarterbacks. And suddenly you may have exceeded your salary cap and you've got an excuse. In other words, you can go to the other NFL owners and say, "Well, look, you know, gee...we got this Ryan Leaf, and we thought that he'd do great and, uh, he's proven to be a real problem and we've had to bring in all this other talent to make up for the problem with him but we still have to pay his salary. So, therefore, we've exceeded the salary cap."
Then the Chargers can go out, shop the team, and negotiate. If they get an offer from somebody, then, under Section 31, they come back to the city. Technically, it goes like this: Say they, the Chargers, start in January of 2000 quietly negotiating up in Los Angeles. I say quietly, because as far as I can tell under the contract, there seems to be no requirement that they notify anyone that they are engaged in negotiations. Then, say they come back to the city and give them notice that the salary cap has been exceeded, and they would like to renegotiate the contract. Well, then the city and Chargers negotiate for the first of two periods lasting 90 days. At the same time, the Chargers can continue negotiations in L.A. If the Chargers don't reach a new agreement with the city acceptable to the Chargers, then the Chargers have 18 months to finalize the L.A negotiations. At that point, when they've finalized the deal in Los Angeles, they have to present to San Diego this offer, say, from Los Angeles, and San Diego has a period of 90 days to match it.
MP: When you say "match it," what's that mean?
BH: Well, presumably, say the Chargers find a coalition of people in the city of Los Angeles who agree to pay the NFL $500 million dollars to move the team to Los Angeles and provide the Chargers with a stadium seating 100,000. The Chargers bring this offer back to San Diego and say that if you, that is, San Diego, match it we'll keep the team here in San Diego.
And you have 90 days to raise the money -- make the decision and raise the money. Well, of course, the likelihood of the City of San Diego being able to raise $500 million is unlikely, let alone agreeing to construct a new stadium seating 100,000. And that would be pretty much a minimum offer to the NFL and the Chargers. After all, when the expansion team went to Houston, the NFL was paid, I think, $700 million.
MP: Would the offer come in the form of a cash offer or the offer of a stadium, or is that made clear in the contract?
BH: Well, if you look at Section 31, it says that San Diego would have to match "the financial and overall economic terms of the proposed third-party transaction." That's about as broad as language can get. It's a provision that seems clearly drawn by the Spanos attorneys and just as clearly not reviewed or carefully considered by the City of San Diego.
For almost a year now, I've been saying to people that I thought the NFL expansion team would go to Houston because of this team-shopping clause of the Chargers.
One of the big questions this year was, "Well, gee, you know, will the NFL go to Los Angeles or will it go to Houston?" And, of course, on the face of it, one would have thought, well, the answer was easy. The NFL would go to Los Angeles because they want that Los Angeles market. Of course, Houston's a pretty big market, so the NFL also wanted to go to Houston. So the question was, where would they go first? Well, the answer was, to me, obvious. I could almost hear Alex Spanos whispering to all of those owners, "Look, go ahead and move the team to Houston because I'm going to be taking the Chargers up to L.A." And, of course, the other guy that was whispering in the owners' ears was [Oakland Raiders owner] Al Davis. And, in fact, just a few weeks ago, the Raiders and the City of Oakland went to court to argue about whether or not the Raiders have to stay in Oakland through the year 2011 under their current franchise agreement. Now, if the City of Oakland wins that fight, it means that L.A. is open. And there's only one team that I'm aware of in the United States that could move to Los Angeles, and that's the San Diego Chargers using Section 31. If Oakland wins that lawsuit, then you've got a situation in which Al Davis and Alex Spanos may go head to head over who gets to move.
MP: And didn't Spanos argue publicly for giving that franchise to Houston?
BH: Yes, that's my memory of it.
MP: So he didn't make any secret of his desire to have it in Houston?
BH: That's right. That's right. And all the San Diego Union-Tribune right now reports to people is this claim by the Spanos family that, "Well, we don't have the slightest intention to ever move out of San Diego." In which case, anyone who has read the agreement would ask, "Well, how do you explain the presence of Section 31 of the Chargers' agreement, this team-shopping clause. Why is the team-shopping clause in the contract?"
You can imagine how much more billionaires who want to own an NFL franchise would pay for the L.A. franchise as opposed to San Diego, with all the marketing rights up there -- all of the distribution rights for T-shirts and hats and mugs and toys and all of those things that the team would be able to sell in that market once they developed a loyal fan base and TV following.