Faulconer: “It’s so much more than an opportunity for a new sports team."
  • Faulconer: “It’s so much more than an opportunity for a new sports team."
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The Los Angeles Times is reporting this evening (March 9) that Anschutz Entertainment Group (AEG), owned by multi-billionaire Philip Anschutz, is pulling out of its plans to build a football stadium in downtown Los Angeles.

"We are no longer in discussion with the NFL or any NFL team," reads a company statement. Just a week ago, it appeared that AEG was going all-out to block the plans of multi-billionaire Stan Kroenke, owner of the St. Louis Rams, who has all the entitlements to build a stadium in Inglewood.

The move may — may — open doors for the Chargers to try to be a second team occupying the Inglewood site, along with the Rams. Kroenke would bring in much more money if he had a second team to bring in ticket, advertising, naming rights, parking, TV, and other revenue at the planned stadium. However, money could be the hangup.

Forbes estimates the Spanos family is worth $1.25 billion, and $1 billion of that represents ownership of the Chargers. Kroenke would probably demand more than $250 million, and the family would be reluctant to put the rest of its money in a stadium. However, the Chargers could figure that the team's value would rise, perhaps by a billion dollars, and it could afford to borrow to get the second slot at Kroenke's stadium.

The Oakland Raiders would like to get into L.A., too, but the owning Davis family doesn't even have one billion in assets, according to Forbes. Oakland might wind up in St. Louis, playing for almost nothing. That city knows it will probably lose the Rams and doesn't want to be stood up a second time. St. Louis built the current stadium, which is only 20 years old. The Los Angeles Rams moved there in the mid-1990s. Earlier, the team that is now the Arizona Cardinals left St. Louis high and dry.

Actually, the Chargers do not have the funds to contribute any significant amount to a San Diego stadium. The team claims that 30 percent of its fan base comes from Orange and L.A. Counties. That's probably hyperbole, but if it is 20 percent, it is a big bite out of revenue and may be enough to kill the idea of a new stadium.

Attendance at Qualcomm has been mediocre in recent years. The most likely result is the Chargers continuing to play at Qualcomm and the Raiders continuing to play in Oakland. But AEG's dropping out does present the Chargers with a long shot in Inglewood.

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Comments

Ken Leighton March 9, 2015 @ 9:46 p.m.

um... Don....um....i think you made a little error here. What's sad is that no one else busted you. The Chargers and the Raiders are looking to move to CARSON. The Rams are looking to move Inglewood. Come on Don. I'm a huge fan of yours. Don't lose it at this most important juncture. We need you. We read you. We respect you. But don't lose it! This is not a good thing.

You got the important part right about AEG when you repeated what was reported in the LA Times that AEG is giving up...but for the love of God PLEASE get the rest of the facts right. No one ever said he Chargers were trying to hook up with the Rams. It was the Chargers+Raiders Don. It was the RAMS and the RAIDERS in CARSON Don. Oy vey.

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aardvark March 9, 2015 @ 10:45 p.m.

Actually, I think Don is correct by not even mentioning the Carson project. I don't think that project ever gets off the ground. But by looking at a recent survey of teams that LA area residents wanted to move to LA, the Chargers came in a very distant third--way behind the Rams and Raiders. The NFL is probably sweet-talking Stan Kroenke and trying to see just what it would take to have another team play in Kroenke's new stadium. And if that second team isn't the Chargers, you can rest assured they won't stay here.

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Ken Harrison March 10, 2015 @ 8:57 a.m.

The 10 million population L.A. market is large enough to send the worst NFL team to L.A. and still succeed. Oh, wait, maybe that's what's being planned.

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Matt101 March 12, 2015 @ 12:09 a.m.

The NFL doesn't have to sweet-talk Kroenke. They just have to tell him that in order to get enough owners to vote in favor of his move, he'll have to agree to let a second team play in his stadium.

But the NFL isn't going to make Kroenke share his stadium for free. If he builds it, he will be able to charge a fair rent and/or get a sizable investment in the project from the second team. Shouldn't be too difficult to determine what a fair rental rate would be, because when the Jets moved into the old Giants stadium (before they built the new one that the teams co-own), the Jets paid rent to the Giants.

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danfogel March 12, 2015 @ 7:55 a.m.

The Jets moving to the Meadowlands was just a little different. In this case, IF Kronke builds his own stadium, any other team playing there would, for all practical purposes, be his tenant. The Meadowlands was owned by New Jersey Sports and Exposition Authority, so when the Jets moved there, that is to whom the rent was paid, not the Giants. I don't recall how much they paid in rent, but it was said to be less than they were paying at Shea, which was $560K per season. That's about $2.3 million in 2015 dollars. I don't see Kronke spending $1.5 Billion on a stadium and "renting" it out for $300k per game, especially when you consider the home gate alone on a 70K seat stadium,(the minimum the NFL would allow) would likely be in the neighborhood of at least $6 million. A "fair" rental rate would be a highly subjective decision. Something else to consider. The NFL covents Los Angeles. If a billionare owner is going to pay for for his own stadium to move his team into, the NFL is not going to strong arm hm into doing anything, including demanding he allow a another team to play in his stadium.

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Don Bauder March 10, 2015 @ 4:40 a.m.

Ken Leighton: I deliberately omitted mention of the announced plan of the Chargers and Raiders to build a stadium in Carson. The idea is so absurd it is not worth mentioning. Neither team has the financial wherewithal to make even a small contribution toward such a stadium. It's a sham -- so laughable that I don't know why the suggestion was thrown out. Best, Don Bauder

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ImJustABill March 9, 2015 @ 10:27 p.m.

Don, I'm glad to see you're doing OK!!!

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Don Bauder March 10, 2015 @ 4:52 a.m.

ImJustABill: I am not OK yet. I may not be until mid-April. But I am making some posts again. Best, Don Bauder

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Duhbya March 10, 2015 @ 8:05 p.m.

Hi, Don...I think I might have jinxed you. Take your time and don't overdo it.

Duhbya

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danfogel March 9, 2015 @ 10:30 p.m.

don bauder, moving ANY team to Los Angeles will not increase it's valuation by a billion dollars, or anywhere close to it. When figuring the value of a team, Forbes uses four categories: sport, market, stadium and brand.. In their valuation of the Giants and Jets, the valuation of market and stadium is split between the 2 teams. I can see the total valuation for moving to Los Angeles being $1 billion, maybe slightly more, but with that split between the two teams, not per team. BTW You mentioned the Spanos clan having to pony up some cash if they move the Chargers. Forbes gives them a collective value of $1.3 billion and the Chargers are valued at $995 million. So the question is how much of that remaining $305 million do you think is actually cash, or at the very least liquid? It seems like a great deal of their wealth would be tied to A.G. Spanos Companies. BTW2 There was a Missouri House hearing scheduled for today to analyze a new stadium’s costs and benefits.

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Don Bauder March 10, 2015 @ 4:43 a.m.

danfogel: Forbes' latest assessment of the net worth of the Spanos family is $1.25 billion. That was made a few days ago. Best, Don Bauder

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danfogel March 12, 2015 @ 8:01 a.m.

donbauder, as of March 2, it was $1.3 billion. Today it is $1.26 billion. Forbes has this thing called "Real Tim" net worth, so maybe that means regular updating.

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ImJustABill March 12, 2015 @ 12:04 p.m.

Forbes has a track record of underestimating the value of LA teams. Forbes was WAY off on estimating the value of the Dodgers and the Clippers.

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ImJustABill March 9, 2015 @ 10:30 p.m.

I think the Chargers will be playing in LA - it's just a question of playing in Carson with the Raiders or playing in Inglewood with the Rams.

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Don Bauder March 10, 2015 @ 4:50 a.m.

ImJustABill: Playing in Inglewood with the Rams is least unlikely. Best, Don Bauder

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ImJustABill March 9, 2015 @ 10:35 p.m.

Recent stories claim that Goldman Sachs is a major player in these negotiations - http://voiceofsandiego.org/topics/news/goldman-sachs-wants-chargers-los-angeles/

Apparently GS is willing to put up a lot of financing for the Chargers if they move to L.A. but not so much if they stay in SD. "Coincidentally" an ex-GS man is considered the NFL's point man for LA.

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Don Bauder March 10, 2015 @ 4:47 a.m.

ImJustABill: Anything Goldman Sachs puts up will have to be paid back. The firm won't back the goofy Carson stadium idea. Anything the NFL puts forward will have to be paid back. Best, Don Bauder

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danfogel March 10, 2015 @ 8:10 a.m.

don bauder The NFL won't put anything into a new stadium in Los Angeles hen the NFL revived it's stadium loan program in 2011, the 2011 G-4 Resolution, it included a provision that relocation funds could not be used for relocation. Section 4E: "The project must not include any relocation of or change in an effected club's "home territory(as defined in the Constitution and Bylaws". It would take a 3/4 majority of the entire league to change this in the NFL Constitution and Bylaws and Goodell has already addressed this and said no changes. An exception to this would be the Raiders. The NFL Constitution and Bylaws include a special provision, 25.3(C) that states that any changes relating to or involving to the arrangements or conditions under which the Raiders franchise is operated require unanimous approval by all member clubs. Add to that the fact that the league would only issue matching funds, which the Chargers don't have anyway, and it seems unlikely that the Spanos clan would be able to get much, if anything, for renovations or a new stadium in San Diego. The 49ers got $200 million because they moved a few miles away. San Diego won't be getting a loan unless they stay in San Diego and the Spanos clan ponies up some cash.

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aardvark March 10, 2015 @ 8:35 a.m.

And yet with all that, an owner as powerful as Jerry Jones has said that if a team wants to move, they will, and there really isn't anything the league can do to stop them. Especially since Stan Kroenke has said nothing about asking the NFL for any money--he would build his own stadium with his own money (whether that actually happens or not remains to be seen, but he has enough money that he doesn't need a loan from The League). The team could always be punished, such as no Super Bowls in his new stadium, but then again, The League claims they desperately want back into the LA market with at least one team, so I think the next year in regards to the LA market should prove to be a very entertaining scenario.

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danfogel March 10, 2015 @ 9:09 a.m.

A couple of comments. First, it is Jerry Jones, and I take everything he says with a big ole grain of salt. With that said, he is probably more right than wrong in this instance, because I do believe that the NFL does want back in the Los Angeles market. With respect to stadium loans, at this point, the Chargers brass seem to be targeting either a shared stadium in Carson or a new stadium in San Diego. Even IF,and it's a big IF, they end up in Carson, there will be no stadium money from the NFL and if they stay in San Diego, as I said, the NFL would only match whatever cash Spanos tosses in and I don't believe that they have anywhere near the $200 million that Fabio was proclaiming "might now be available" in 2011. My previous comment did not address Kronke, since he is claiming that he will pay for his own stadium. Back in the day, my old VW van had a bumper sticker on it that said "cash, grass or ass, nobody rides for free. Well, if Kronke indeed does build his own stadium and another team also ends up there, they ain't gonna be playin' for free. Kronke is gonna want a steep price because he likes playing with other peoples money. I can imagine a scenario in which another team that is playing in his stadium without footing any of the costs, gets none of the money from naming rights and advertising and maybe parking fees also. He's going to want rent, probably a steep one, probably coming from the tenants home gate and TV money. Frankly, I can't see a scenario with either the Chargers or Raiders moving into a Kronke built and owned stadium and coming out much better financially than they are now, except that they would have cash flow from PSL's and luxury boxes, and I would be willing to bet that would be factored in to their rent. My guess is IF, and it's a BIG IF at this point, that if Kronke builds a Los Angeles stadium and there is a second team, it's the Chargers ad the Raiders end up in St Louis. At this point, however, I think the more likely scenario is the Rams stay in their new taxpayer funded stadium, ditto the Chargers and the Raiders are stuck playing below sea level because Mark and Mama Davis have less money than the Spanos clan and can't do anything on their own. Just my opinion. Opinions vary.

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aardvark March 10, 2015 @ 9:17 a.m.

I actually agree with almost everything you said. I think the NFL is negotiating with Kroenke to somehow get a 2nd team playing in his Inglewood stadium, but he obviously controls that discussion. The only thing I disagree with you about is what team (Chargers and Raiders) go to what city. Based on the recent survey of fans in the LA area, it appears that not too many people want the Chargers in LA, but they DO want the Raiders. But the NFL won't be doing the Raiders any favors, so we will see what happens in the next year.

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danfogel March 10, 2015 @ 10:20 a.m.

aardvark I take those polls with that same big ole grain of salt. There is a certain part of the population that wants the Raiders. After more than 20 yrs in the area, I know a whole lot of people and most of them really don't care either way whether or not the NFL comes back, but they do not want a team if it involves public. money. Over the course of the last 4 or 5 years, since all of this stadium insanity began, I literally have not spoken with a single person I know who wants to see the Raiders return. Almost universally, they have said that if it is the Raiders, they would not even consider going to games. My impression, and several have said so, is that it's the Davis name. On the other hand, over the last few months, when talking about the Rams moving back, most of us seem to have the same opinion. Georgia is not around anymore, the Rams were in LA before most of us were even born so as long as no public money is spent on their stadium, they would pretty much be welcomed back. As for the Chargers, I am really ambivalent. We had season tickets the whole time we lived in San Diego. Now, even though I can get to the Murph fairly easily, I seldom bother to even think about it. I can get their quicker than I can get to Inglewood, so if I don't bother now, I don't see it if they do end up in Inglewood. As you said, we shall all see how the "drama" plays out. How amusing it would be if a year from now, the Rams were waiting on construction to begin on their new taxpayer funded, state of the art, Jerry's World east, the Raiders were still below sea level, cleaning the sewage out of the locker rooms, and Fabio was still extolling the virtues of having the Chargers host a Super Bowl in San Diego, all the while still pleading for a new stadium, taxpayer funded, of course. What's the old saying? Ah yes, the more things change, the more they stay the same.

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AlexClarke March 10, 2015 @ 6:19 a.m.

The billionaires will decide where a stadium will be built and that will be driven by how much taxpayers put in. They are counting on the fans and public officials to back their play. Never use your money when you can use someone else's especially the stupid taxpayer.

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Carlos Becerra March 10, 2015 @ 8:12 a.m.

My goal is to keep a nfl franchise in san diego!

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MURPHYJUNK March 10, 2015 @ 8:56 a.m.

how long will they be scheming to keep it from the voters to decide ?

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aardvark March 10, 2015 @ 9:18 a.m.

If the city wants to wait until November of 2016 to put this on a ballot, it may not matter.

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MichaelValentine March 10, 2015 @ 11:14 a.m.

What I find highly ironic is that all three of these teams have moved out of LA at one point or another.

Could it be that Sothern California just isn't NFL country?

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Visduh March 10, 2015 @ 2:35 p.m.

That AEG proposal has been around for quite a long time, I think. The lack of progress on it makes me think it was never all that serious. So, now we can scratch Farmer's Field. Since I agree that the Carson proposal was just a ploy, and had no chance of ever being built by those two teams, that leaves Inglewood. So, if anything is to happen, it will have to be done by Kroenke. But is anyone really going to pay the full price to build a stadium? Oh, we hear what a great deal one is, and how much economic value flows from having a NFL team, but to date nobody has built a facility with 100% private funding. Sheesh, if he actually builds such a place, it will forever alter the NFL landscape, and might just spell an end to taxpayer blackmail and a host of other abuses by the billionaire owners.

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danfogel March 10, 2015 @ 7:55 p.m.

visduh, I think the initial proposal for the stadium was back in mid 2010. You left a stadium out though. Don't forget that Ed Roski still has his "shovel ready" project. LOL

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Visduh March 10, 2015 @ 8:25 p.m.

Was that the one in Industry? The list was long, but were the proposals anything but pipe dreams?

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Matt101 March 11, 2015 @ 11:43 p.m.

The AEG proposal was serious, but the driving force behind it was Tim Leiweke, who was forced out of AEG by Anschutz a couple of years ago.

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ImJustABill March 10, 2015 @ 9:08 p.m.

My very coarse analysis:

Leaving LA vacant has been in the NFL's best interest over the last 2 decades because it provided great leverage to persuade taxpayers to hand over money to NFL teams.

Now that almost every NFL team has a new or renovated stadium there is little incentive for the NFL to keep the lucrative LA market empty.

Therefore, there will soon be at least 1 team in LA.

Once you put 1 team in LA, you might as well put in 2.

Therefore, within 5 years L.A. will have 2 NFL teams - most likely 2 of the Rams, Raiders, or Chargers.

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Ken Leighton March 10, 2015 @ 11:47 p.m.

with all due respect...the Carson deal is not "so absurd so as to not even mention" because the stakes are much higher in L.A. Major investors are willing to plop down big bucks because you have America's biggest money generating diversion talking about relocating to America's second biggest market which has been starving for an NFL franchise for decades.

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ImJustABill March 11, 2015 @ 7 a.m.

I agree. Goldman Sachs appears to support the idea and GS is obviously a powerful entity.

Of course, the whole thing could just be a big bluff to help force SD taxpayers to kick in some dough.

But I'm not sure at this point what the Chargers' plan A is and what their plan B is. At this point I think moving to L.A. is their plan A and sticking it to SD taxpayers is plan B.

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dwbat March 11, 2015 @ 10:46 a.m.

Goldman Sachs' participation runs from Plan A to Z, meaning whatever NFL team builds and/or relocates, GS is going to make beaucoup bucks.

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Matt101 March 11, 2015 @ 11:57 p.m.

Perhaps not 100% absurd, but still very unlikely.

The Carson financing ideas seem very shaky and would probably cross over into absurd if only one team wants to move there. In other words, if the Raiders aren't there along with the Chargers, it won't happen.

The NFL isn't going to put 3 teams in LA, or build 2 stadiums. A Carson stadium can only get built if all of these things come to pass: (1) Spanos finds enough NFL owner votes to keep Kroenke out of LA, or finds another way to block Kroenke; (2) Kroenke doesn't sue to overturn that block; (3) The NFL then votes to allow both the Chargers and Raiders to move to Carson; (4) The NFL doesn't charge either team a "relocation fee" (neither team can afford it, so the relocation fee would kill their move); (5) Goldman Sachs and the NFL finance the entire Carson project with neither the Chargers nor the Raiders putting in any money up front (again, the teams can't afford it).

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danfogel March 12, 2015 @ 8:04 a.m.

matt101 Valid points, all. But you were incorrect about one thing. A stadium in Carson is indeed 100% absurd!!! NO ONE is going to pay $3 billion plus for a stadium in Los Angeles and that is what it would end up costing if GS is involved.

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dwbat March 13, 2015 @ 9:48 a.m.

Why don't the Chargers move to L.A., and play at the Los Angeles Memorial Coliseum (where they played back in 1960)? That would be a far cheaper solution.

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danfogel March 13, 2015 @ 11:30 a.m.

dwbat It would indeed be cheaper, but it would not be practical.

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dwbat March 13, 2015 @ 3:14 p.m.

Right, but it would get them OUT of San Diego! ;-) Isn't that a good thing?

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ImJustABill March 13, 2015 @ 4:13 p.m.

I don't think its a good thing. I would like the Chargers to stay in SD. But I don't think building a stadium for an NFL team is an appropriate use of tax dollars.

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danfogel March 13, 2015 @ 4:53 p.m.

Well, as long as they don't move north of the OC-SD county line, I really don't care where they end up.

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Twister March 13, 2015 @ 10:02 p.m.

I've been out of town. What's this stuff about Don? Or is it a private matter?

I've been in and out of, er, four ER's and hospitals, including three ambulance rides over the last ten or twelve months, but I've bounced back. Well, crawled back in some cases. Anyhow, I hope we're both around and full of piss and vinegar for at least another decade. Some pretty young nurses to flirt with helps the healing a lot.

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ImJustABill March 14, 2015 @ 12:58 p.m.

There's a few notes about Don's illness in the H1B story. Based on what I've read Don had a severe bout of flu and pneumonia but is recovering now.

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Twister March 18, 2015 @ 6:55 p.m.

I'm in great sympathy with him; I, too, had a severe bout of the flu and pneumonia last year. I reckon I've got so much DDT in my fat cells that when I die I may fail to rot.

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