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The Chargers say they have a problem: Qualcomm Stadium is antiquated. Sorry. The Chargers’ problem is much broader and deeper than that. The Chargers have a problem with San Diego. Period. It’s not big enough or rich enough to satisfy the financial ambitions of the ownership.

I recently had an email colloquy with Mark Fabiani, the team’s special counsel. His answers to my questions were revealing. He says the team is sedulously working to remain in San Diego. But I suspect he realizes that that is impossible, given the management’s monetary desires. I have thought for years that the team wanted the rich Los Angeles market. Economic and political conditions may prevent that for a while — perhaps a very long while. But unfortunately, the horrible City/Chargers contract inked in 2004 permits the team to walk off without saying a word beforehand. Therefore, the Chargers don’t have to move to L.A. and play in the Rose Bowl or Coliseum until a new stadium is finished. The Chargers can stay mum until a stadium is completed and suddenly move.

Other teams, however, want that juicy Los Angeles market. So the Chargers don’t have a sure thing. If they continue playing at Qualcomm, they will make plenty of money — just not as much as they could make in Los Angeles or a handful of other markets.

Says Fabiani, “Simply put, our stadium does not allow the Chargers to remain financially competitive with the top teams in the NFL (all of which are playing in, or about to begin playing in, new taxpayer-subsidized facilities). Qualcomm Stadium’s luxury boxes and club seats do not have the amenities for which customers in other markets are willing to pay top dollar.” He is talking about “luxury boxes, club seats, and electronic signage/sponsorship opportunities” that “create a huge and growing financial chasm between the Chargers and the top teams in the NFL.” (Because of so much revenue sharing, I don’t think there is any “huge” chasm, but that’s another subject.)

Fabiani goes on to say that luxury boxes and club seats were “both virtually sold out last season.”

That’s a mouthful. The Chargers virtually sold out the luxury boxes and club seats, but that’s not good enough. Let’s face facts: only a big, rich market could create the income stream that the Chargers’ management covets. San Diego cannot provide this. First, the business mix in San Diego does not lend itself to providing whopping revenues from super-luxury boxes. San Diego is filled with capital-intensive, cerebrally oriented companies (biotechs, telecoms) that can’t afford to entertain in luxury boxes and really aren’t suited to doing business at football games anyway. The real estate companies used to throw money around, but now they are struggling to survive. The big hotel owners still have money to burn, but there aren’t enough of them. Similarly, the average San Diegan is squeezed: the cost of living is 50 percent above the nation’s, but incomes are only 20 percent higher.

Bottom line: even if the Chargers built a new stadium, they would find that they couldn’t get that much more revenue from the corporations, superrich, and average fan. San Diegans, including most companies, live on psychic income. That won’t satisfy the Chargers. A new stadium would cost well over a billion dollars. The team could not recover those extra costs, even with a large government subsidy.

And that brings us to today’s macroeconomic situation. Governments at all levels are ailing. The City of San Diego is one of the worst off in the nation. Chula Vista, with which the team is now having discussions, is hurting. The recession will inhibit consumers for probably two more years. Building costs have soared. All around the country, housing markets are in desperate shape; teams’ hopes of financing stadiums with revenue from condos are, frankly, shot. The credit crunch is likely to last into 2010. The National Football League could have a strike or lockout in 2011; that prospect could cool off the building of new stadiums.

“Tax revenues are falling, governments are struggling,” says Dennis Coates, economist at the University of Maryland, Baltimore County. With real estate in the Dumpster, the always-specious argument that stadiums spur development is a tougher sell.

Rodney Fort, professor of sports management at the University of Michigan, agrees with Coates: in the near future, the private sector will have to put up more of the money. “Governments are less willing to foot the bill,” he says, so the teams will have to come up with more scratch. The NFL itself might put more into new stadium deals; it has always wanted desperately to return to Los Angeles, and in that 2004 contract, San Diego promises not to sue the league, which was already talking with L.A. at the time of the negotiations.

Fabiani admits that “Today, there is no chance that the Mission Valley project could be financed.” The housing market has “declined dramatically,” while stadium construction costs have skyrocketed. In my judgment, that deal was a fairy tale back in 2002 when the Chargers proposed it.

Fabiani believes a deal can still be worked out in Chula Vista. But 60 to 70 percent of the houses for sale in Chula Vista are distress sales. Fabiani hopes there could be a “consortium of universities” on the east side that could produce “a mix of development… that would include more than housing.” Sorry. “A consortium of universities” is not going to spring out of the ground in eastern Chula Vista. It might get a branch of a community college or of San Diego State, but that would be a long time away, and modest at best. Eastern Chula Vista is one of the messiest housing markets in the county. Fabiani admits, “We are a long, long way from moving forward” in Chula Vista.

He sums up, “The credit crunch, skyrocketing raw material costs, and [the] housing-market collapse are huge issues, and that is why completing our project in San Diego County becomes more difficult by the day.”

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Comments

Fred Williams Aug. 6, 2008 @ 1:19 p.m.

Is there a bookie somewhere I can place a bet the Chargers are out of San Diego in 2012..??

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Don Bauder Aug. 6, 2008 @ 3:38 p.m.

Response to post #1: Since the professional gambling industry and professional football are joined at the hip, the answer is no doubt yes -- you should be able to find a bookie who will take such a bet. Best, Don Bauder

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drenwick Aug. 6, 2008 @ 6:01 p.m.

What's the likelihood of the NFL stepping in and subsidizing the effort to keep the Chargers in San Diego County? After all, they are well supported and attended in San Diego (something the L.A market can't say) and this is by far the best place for a Superbowl every five years or so...

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Don Bauder Aug. 6, 2008 @ 6:46 p.m.

Response to post #3: The chances of the NFL subsidizing a new stadium for the Chargers in San Diego are nil. The only reason there is a chance the NFL might subsidize a stadium in LA is because of the huge TV market. The NFL a few years ago warned San Diego that it wouldn't get another Super Bowl until it provided a stadium to the Chargers -- blatant extortion. There are plenty of sunshine locales in which to hold Super Bowls. Best, Don Bauder

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MarkScha Aug. 6, 2008 @ 7:29 p.m.

"San Diegans, including most companies, live on psychic income." "San Diegans are paid [partly] in sunshine" is a phrase I remember from my childhood in Poway, in the 1970s.

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tellyman87 Aug. 7, 2008 @ 1:10 a.m.

Wow what if the Chargers move to L.A! The Faiders come here and finish destroying Mission Valley, and the 49er's build a new stadium, on the site of the old airport! Southern Cali would be the football capitol of the Nation!

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rickeysays Aug. 7, 2008 @ 1:56 a.m.

I always wondered why the Chargers say they need a new stadium to remain competitive, when there is a salary cap in the NFL. As long as they bring in enough to afford the salary cap (which they do) why do they need more? Could it be as simple as greed? I say let them move to Industry. Who cares. They'll still be on TV here, and we won't have to worry about blackouts if they don't sell out. But if Roski builds the stadium himself, will they become the Roski Chargers?

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Don Bauder Aug. 7, 2008 @ 7:20 a.m.

Response to post #5: Yes, there are several variations on the theme. Best, Don Bauder

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Don Bauder Aug. 7, 2008 @ 7:24 a.m.

Response to post #6: Your scenario would leave Northern California without a pro team. The NFL would still fret. As a market, San Diego can only afford one team. Keep in mind, though, as part of that bungled 2004 contract, the Chargers got a stark reduction in rent in San Diego. They are making plenty of money here and can continue to do so for as long as they like. Best, Don Bauder

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Don Bauder Aug. 7, 2008 @ 7:29 a.m.

Response to post #7: Yes, the NFL has revenue sharing. There are some exceptions: the teams get to keep luxury box revenues, for example. But the argument that NFL teams need new stadiums to be competitive is fallacious. There is really no correlation between the luxuriousness of the stadium and the competitiveness of the team. Want an example? The Chargers. The ownership says the stadium is inadequate, but the team has been one of the best in the league for the last several years. Best, Don Bauder

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Don Bauder Aug. 7, 2008 @ 10 a.m.

Response to post #11: McSweeney screwed up royally, and in the public eye, in the campaign, so he got bounced from the post. Then he shows up as stadium manager. Is anyone surprised? Best, Don Bauder

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baseballfaninsandiego Aug. 7, 2008 @ 10:14 a.m.

Mr. Williams and Mr. Bauder ought to get their facts straight about Mr. McSweeney before they bash him. Its not the same guy gentleman !!!!!

http://www.signonsandiego.com/sports/20080710-1844-n10stadium.html

"McSweeney reports to the city's real estate assets division under Mayor Jerry Sanders. He is not the same Mike McSweeney who served as Sanders' former campaign manager."

I do agree though that the former Sanders Manager was a jerk

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baseballfaninsandiego Aug. 7, 2008 @ 10:16 a.m.

Try this link:

www.signonsandiego.com/sports/20080710-1844-bn10stadium.html

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Fred Williams Aug. 7, 2008 @ 10:29 a.m.

=RETRACTION=

I jumped the gun. I did a bit more research and found that according to this article:

http://www.signonsandiego.com/news/metro/20080711-9999-1m11b2briefs.html

This is NOT the same Mike McSweeney who was fired from Sander's campaign.

I deeply apologize for my mistake and ask that the administrator remove my previous comment.

Fred Williams

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Fred Williams Aug. 7, 2008 @ 10:32 a.m.

baseballfansandiego, you beat me to it.

Again, my apologies.

Administrators, feel free to remove the erroneous and embarrassing post while leaving up my humble retraction.

Best,

Fred

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Fred Williams Aug. 7, 2008 @ 7:43 a.m.

[Erroneous and embarrassing post removed. -- the mgmt.]

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Don Bauder Aug. 7, 2008 @ 11:26 a.m.

Response to post #13: Mea maxima culpa from both Fred and myself. Our apologies to the other McSweeney. Best, Don Bauder

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Don Bauder Aug. 7, 2008 @ 11:28 a.m.

Response to posts # 14, 15 and 16: Repeat: we're sorry and admit our errors. Best, Don Bauder

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JustWondering Aug. 7, 2008 @ 3:27 p.m.

Don, For the record I've seen the apologies over the misstatement and I'm glad to see the reader removed the offending comment. Nevertheless, I'll also add; Stadium Manager Mike McSweeney, who I known for several years is a hard working honest man whose ethics are beyond reproach.

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JohnnyVegas Aug. 7, 2008 @ 6:06 p.m.

Says Fabiani, “Simply put, our stadium does not allow the Chargers to remain financially competitive with the top teams in the NFL (all of which are playing in, or about to begin playing in, new taxpayer-subsidized facilities).

Well, if that is the case then THEY need to build a new one-NOT the taxpayers.

I am sick and tired of these billionaire team owners sticking their hands in our pockets and ripping off the many, the poor and middle class many, so they can line the pockets of the few-as in the Spanos family few.

Screw them.

Go Chargers!!!! Go FAR away and never come back. I love the team but I am sick of this "give us free money" baloney.

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Don Bauder Aug. 7, 2008 @ 8:37 p.m.

Response to post #20: Remember, Fabiani specifically says SUBSIDIZED stadiums. What he doesn't mention is that in the horrible deal (for the City) of 2004, the Chargers' rent was slashed drastically. So they have a tremendous advantage on the cost side. Best, Don Bauder

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NovemberMan Aug. 8, 2008 @ 4:44 a.m.

I still don't believe the Chargers will ever leave San Diego- Stadium or no stadium.

The city is too easy to bilk and rob.

I don't see another city (or market as big) being as pliant as San Diego.

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Don Bauder Aug. 8, 2008 @ 6:33 a.m.

Response to post #22: Yes, San Diego is a haven for corporate pickpockets. Another factor is the huge discount on rent the team wangled in the 2004 deal when the City got skinned at the bargaining table once again. Why leave such a deal? The team wants to leave, but it can bide its time and make plenty of money in San Diego. Best, Don Bauder

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Fred Williams Aug. 9, 2008 @ 8:06 a.m.

Back to the topic at hand...

It's well documented how the Spanos family took San Diego for a ride, bilking us all out of tens of millions of dollars. We all continue to pay for this fiasco. For Fabiani to feel otherwise is fabulism.

Have we learned our lesson?

To Sanders' credit, he refuses to entertain the idea of giving away any more money to the Chargers. Aguirre is Fabiani's target of ire, often named by the team as the sole obstacle to the Chargers getting more city money. This is simply not true, yet another of Fabiani's many, many lies.

The obstacle is the voters of San Diego.

To be fair, Padres owner John Moores ripped us off for far more than the Spanos family. But it was the Spanos directed conversion of the multi-use Murph into a football only stadium that started the ball rolling.

Former city manager Jack McGrory's involvement in this egregious set of deals has never been properly investigated, much less prosecuted. But this one man's penchant for secrecy and creative book keeping is the root cause of San Diego's financial disaster today.

Soon after negotiating the Charger's notorious ticket guarantee and other bad for the city deals, McGrory jumped ship and negotiated on behalf of the Padres for their even more lopsided gift from the taxpayers of San Diego.

Now we're all stuck with paying off stadium and ballpark debt for the foreseeable future. None of the promised benefits ever materialized.

Only a fool thinks San Diego hasn't figured out their game by now. We don't want to play anymore. It's too expensive.

This is the cause of Charger consternation. We know they aren't good citizens of San Diego, sucking out far more than they ever put in. The football players seem to appear on the police blotter more frequently than in highlight reels.

Now that we are coming to grips with a harsh international economic reality, we have no more time for games like Fabiani plays. He's no more believable today than when he was claiming Clinton didn't ever misbehave in the White House. Why does he expect anyone to take him seriously (except the dunderheads at the UT)?

Don, when you talk to Fabiani does he seem delusional?

If Fabiani or McGrory have any morals they'd go find another job far away from fraudsters and charlatans, or maybe repent their shameful pasts and go off to a monastery somewhere and reflect on the many mistakes and betrayals they committed over the years.

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JohnnyVegas Aug. 9, 2008 @ 10:53 a.m.

Former city manager Jack McGrory's involvement in this egregious set of deals has never been properly investigated, much less prosecuted. But this one man's penchant for secrecy and creative book keeping is the root cause of San Diego's financial disaster today.

Agree 100%-MCGrory is the BIGGEST reason for the mess this City is in, collecting a $$150K pension every year for putting us there.

He should be living at the Chino State Pen right now with a bunkmate named Bubba.

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Don Bauder Aug. 9, 2008 @ 10:58 a.m.

Response to post #24: Fabiani's attacks on Aguirre are absurd. As I recall, one time he was claiming that the Chargers couldn't get a partner for their harebrained Mission Valley scheme of the early 2000s because no co-developer wanted to have anything to do with Aguirre. Just laughable. Those so-called potential co-developers were smart enough to see that it was a cockamie idea in the first place. Can you imagine what would have happened if they would have gone ahead with that deal? Those condos would now be empty, like the condos in the ballpark district, and the developer would long since have filed for bankruptcy. Best, Don Bauder

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Don Bauder Aug. 10, 2008 @ 7:47 a.m.

Response to post #27: Yes, he parlayed his San Diego experience into big riches -- using his knowledge of the San Diego bureaucracy and political scene to give value to those paying him, such as the Padres and the Price family. Best, Don Bauder

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Burwell Aug. 9, 2008 @ 9:01 p.m.

According to the UT, Jack McGrory's city pension is $7,195 per month, a staggering sum. He's too young to draw a city pension and should not be eligible for benefits until he reaches age 65.

http://www.signonsandiego.com/news/reports/watchdog/20051218-9999-1n18mcgrory.html

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anony_mous Aug. 15, 2008 @ 11:57 p.m.

29

The Rams left L.A after the 1979 season beacause the Coliseum Commission members were dragging their feet on their promise to Ram's owner Carroll Rosenbloom to build luxury boxes at the Coliseum, which Rosenbloom saw as essential to future success. The Raiders left for basically the same reason. Al Davis wanted a new, more modern stadium away from the Coliseum and the dangerous neighborhood that surrounded it at the time. In addition to sharing the venue with USC , the Coliseum was aging and stilldidn't have the luxury suites and other amenities that had also been promised by the Coliseum Commission when he moved the Raiders to Los Angeles. In both cases, promises of improvements were made before the teams got there.

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Don Bauder Aug. 16, 2008 @ 8:03 a.m.

Response to post #35: If you want more on the dubious relationships of Davis and Rosenbloom, read Dan L. Moldea's "Interference," which carefully documents the NFL's longstanding ties to organized crime. Best, Don Bauder

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btinsd Aug. 15, 2008 @ 3:10 p.m.

Don:

Thanks for reminding readers that you've been predicting the Chargers move to Los Angeles for years. Those of us who've been around awhile have grown accustomed to your conspiritorial Charger predictions that haven't exactly split the uprights.

This most recent effort is the weakest yet. It offers absolutely no hard evidence that the team is on the way to LA. In fact, your "analysis" fails to consider basic business common sense, shared economic and political realities, or actual public statements made by the pricipals involved.

The Chargers have invested and continue to spend millions of dollars studying options for a new stadium in San Diego. If they secretly long for LA, why would they be doing this? Perhaps it's intentional misdirection in your eyes, but their actions to remain here are stronger factual evidence than any conjecture you present.

If they really wanted to move to LA, they could have easily negotiated their way to LA by paying off the most recent stadium improvement bonds and throwing money at a cash starved city. Small sums in comparison to the riches you seem to think that LA would provide them with, not to mention the overnight increase in franchise value you infer.

You cite a sour economic and political climate in San Diego as the main reason that the Chargers can only have their dream home built in LA. Perhaps you just overlooked the poor economic conditions and political opposition to a new or remodeled stadium in LA that mirrors San Diego's current situation.

Did you consider that the escape of LA's previous NFL teams were due in large part to their inability to get the sweetheart deal you assume the Chargers will be gifted? What has changed since then? Using your own words, since their departure governments are MORE broke than they were then.

You trot out Ed Roski's proposed stadium in the City of Industry as the "glass slipper". Do you really think that this stadium is viable without majority ownership of the team that plays in it?

Of course not, because that relies on surrounding development facing the same economic pitfalls you point out. You've never forgotten to remind us that publically subsidized stadiums don't pay for themselves. Please explain how a privately financed football stadium without tenant ownership produces a better bottom line.

You must have missed Ed Roski's statement that his place can't be built without a team he has ownership in. What makes you think that the Spanos family would give up even 1% of the best investment they've ever made? You've accused them of many things over the years, but never being poor businessmen.

In fact, the Spanoses have been given lots of offers and proposals for their team. They continue to decline all of them and work instead on a solution in the greater San Diego area. Their actions and statements are clearly those of a team that is working to stay in San Diego.

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Don Bauder Aug. 15, 2008 @ 4:53 p.m.

Response to post #29: I appreciate the comments. 1. I have been saying for 7 or so years that the Chargers coveted LA, but I don't believe I ever PREDICTED the move. As I say in the column, it would probably require a subsidy from the NFL, and would certainly require the OK of owners, who may be reluctant; 2. The Chargers are not spending the kind of money they claim to be spending on Chula Vista, Oceanside or Mission Valley plans. For example, the MV plans of several years ago were a joke; 3. I think the Spanoses would gladly give up 25 percent of the team if they got enough money and a deal like Roski's; however, as the column says, I am skeptical of the Roski proposal; 4. The Chargers are probably angling to throw their weight around in the proposal for a dual use of the marine terminal downtown. That's a long way off; 5. In the meantime, the Chargers will make plenty of money at Qualcomm. They pay little rent now because of the horrible (for the City) deal in 2004. Best, Don Bauder

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JohnnyVegas Aug. 15, 2008 @ 6:43 p.m.

What makes you think that the Spanos family would give up even 1% of the best investment they've ever made? You've accused them of many things over the years, but never being poor businessmen.

You cannot seriously think the Spanos family are great business people can you???

They own a pro sports team. Teams which during the last 30 years have enrighed the few (themselves) at the expense of the many-mostly the poor and working middle class- through the funding of billion dollar stadiums, more often than not with a sales tax increase-the most regressive tax there is.

In fact our esteemed President Bush "made" (as in ripped off) his $15 million dollars off the Texas Rangers by just such a scam- build a baseball stadium for billionaires and make the poor pay for it through a local sales tax.

I have said it a million times before, if the Spanos Crime Family wants a new stadium they can BUILD IT THEMSELVES.

The taxpayers are not the bankers or Sugar Daddy for the Spanos Crime Family.

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Russ Lewis Aug. 15, 2008 @ 7:23 p.m.

Johnny, I'm totally with you there. No one has ever explained to me why, if a new stadium is such a can't-miss, sure-fire moneymaker, Alex Spanos isn't the first in line to fund it.

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Don Bauder Aug. 15, 2008 @ 8:49 p.m.

Response to post #31: Johnny, you are asking the Spanoses to be public-spirited business people. Btnsd said they were GOOD businesspeople, not GOODHEARTED businesspeople. They have made a bundle of money on the Chargers by fleecing San Diego. But they could make even more if they went to either LA or Vegas. In LA they would have a much larger market and many more wealthy individuals and corporations to use the luxury boxes. In Vegas they would have the rich folks to pay big bucks for the boxes. If they go for the inchoate dual purpose arrangement downtown, they would have the same problem as they have at Qualcomm: not enough big-bucks folks and companies to pour out money in the luxury boxes. Best, Don Bauder

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Don Bauder Aug. 15, 2008 @ 8:51 p.m.

Response to post #32: New stadia are sure-fire, can't-miss moneymakers for owners if they invest little in them. Team owners want to spend public money, not their own. Best, Don Bauder

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Don Bauder Aug. 17, 2008 @ 9:14 a.m.

Response to post #37: Frankly, I just can't figure that double-decker concept in an earthquake-prone area. New York City, which is not earthquake-prone, was going to build a stadium for the Jets above a railroad yard, but the project was abandoned. It was going to be very expensive. Private capital? Beware. Sports owners talk of a stadium being funded with private capital, but the devil is in the details; it usually winds up with the government funding most of it. Bud Selig was going to build a ballpark for his Brewers completely with private capital, as long as the government moved a highway. In the end, public money built the ENTIRE complex. The MLB owners were so proud of Selig that they made him commissioner. Best, Don Bauder

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a2zresource Aug. 17, 2008 @ 7:49 a.m.

I kind of like the idea of the Bolts playing in a stadium built above the port's cargo terminal... as long as private investors are serious about not needing public money to pull it off.

At least it'll be a money-making move for the Port, as opposed to losing money at the local airport authority over expanding Lindburgh when the headlines read that airlines are dropping routes and San Diego should experience a percentage drop in air traffic.

Besides, as cited in #22 above, Spanos has no real reason to leave town until were all grifted out... and as CCDC/SEDC, the post-wildfire cleanup costs, and the rest of local governmental current events show us now, that hasn't happened yet!

To think back to a simpler time, when all we had to worry about was Yellow Cab and later being parodied in "It's a Mad, Mad, Mad, Mad World"...

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