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In Assessing Chargers Options, Do Cost Comparisons

The propaganda machine behind a taxpayer-financed new Chargers stadium is picking up steam, and looking more ridiculous. This morning (May 21) the Union-Tribune leads with a story about a study claiming that the City's annual operating loss at Qualcomm Stadium is $10.6 million to $13.8 million a year. Then the U-T quotes Mayor Jerry Sanders bemoaning such a taxpayer expense and saying how he is working with the team to develop a multiuse sports complex downtown near Petco Park. But the Chargers say they will only put in $200 million (much less with naming rights, etc.) and they hope the National Football League will plunk in up to $100 million. Forget any NFL contribution; the well is dry.

So the City will have to come up with $600 million AT A MINIMUM -- far more if it's a so-called "multiuse" facility. The minimum annual bond servicing would be $24 million to $30 million a year, and that's without considering opportunity costs and a sinking fund, says former Councilmember Bruce Henderson. He says the City is probably losing $10 million to $20 million or more on Petco, which was subsidized to the tune of $300 million, and on which the Padres pay a mere $500,000 a year in rent. Henderson notes that in 2002, the City made an horrendous deal with the Chargers, giving up almost $100 million in rent through 2020 in exchange for the team dropping the 60,000 seat guarantee, which had almost run its course. Now the City's leadership is being set up to be snookered again.

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The propaganda machine behind a taxpayer-financed new Chargers stadium is picking up steam, and looking more ridiculous. This morning (May 21) the Union-Tribune leads with a story about a study claiming that the City's annual operating loss at Qualcomm Stadium is $10.6 million to $13.8 million a year. Then the U-T quotes Mayor Jerry Sanders bemoaning such a taxpayer expense and saying how he is working with the team to develop a multiuse sports complex downtown near Petco Park. But the Chargers say they will only put in $200 million (much less with naming rights, etc.) and they hope the National Football League will plunk in up to $100 million. Forget any NFL contribution; the well is dry.

So the City will have to come up with $600 million AT A MINIMUM -- far more if it's a so-called "multiuse" facility. The minimum annual bond servicing would be $24 million to $30 million a year, and that's without considering opportunity costs and a sinking fund, says former Councilmember Bruce Henderson. He says the City is probably losing $10 million to $20 million or more on Petco, which was subsidized to the tune of $300 million, and on which the Padres pay a mere $500,000 a year in rent. Henderson notes that in 2002, the City made an horrendous deal with the Chargers, giving up almost $100 million in rent through 2020 in exchange for the team dropping the 60,000 seat guarantee, which had almost run its course. Now the City's leadership is being set up to be snookered again.

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Actually the city's leadership is setting up the voters to be snookered again. I doubt that Sanders believes any of this junk coming out of his mouth.

That piece today described Qualcomm Stadium (as it is known today, what its name will be in the future we can only wonder) needing about $80 million of repairs and improvements over the next seven years. That's a bargain compared to putting $600 million that the city doesn't have into a brand new facility downtown. If you look closely at that $80 million quoted, note that over $30 million of it is more in the category of "nice to have" things and not necessary. So, the $80 million (which I thought looked high) isn't that much after all, unless someone really wants to do some things and wants to blow the money doing them.

It is doubtful that in these times the city can even find $44 million to put into repairs and improvements. But that is still a far more sensible approach and one with a hint of realism.

May 21, 2011

You are absolutely right. The so-called repairs and improvements to Qualcomm pale by comparison with the monstrous cost of a new stadium, which a bankrupt city can hardly afford. And as you point out, that estimated $80 million includes some so-called improvements that are hardly necessary. Qualcomm has a great location, along with great parking and tailgating. Petco is poorly located logistically, and expensive, and the proposed new Chargers stadium would be right near it. The proposal is insane from the taxpayers' viewpoint, but would make bundles for developers and construction companies, and line Chargers ownership's pockets. And, unfortunately, that's what will sway this mayor: big bucks from the downtown plutocrats. Best, Don Bauder

May 21, 2011

You are absolutely right. The so-called repairs and improvements to Qualcomm pale by comparison with the monstrous cost of a new stadium, which a bankrupt city can hardly afford.

Why is KFC Sanders even bringing this up. NO ONE is going to underwrite a bond issue for a billion football stadium for San Deigo, because it will never be paid back.

Money is long gone, and BK is still just around the corner.

It is crazy talk to even bring up a taxpayer financed stadium. And the $200 million the chargers put in is going to be ZERO if they collect the naming rights-in fact they will likely cut a deal worth more than $200 million- thereby making money. Any naming ritghts money should go directly to the taxpayers, as it should have at Petco Park.

May 22, 2011

Stranger things have happened. Never say never.

May 22, 2011

The bond market can do crazy things. Remember that the original Petco Park bonds had an interest rate of 7.66% -- astonishingly high in that market. Merrill Lynch was going to sell them to customers, then at the last minute kept them itself and refused to say why. Later, they were refinanced at a lower rate. Best, Don Bauder

May 22, 2011

For more then a decade and a half, I have asked why the money from naming rights should go to the team, rather than to the city that financed the stadium. I have never had a rational reply -- because there is none. Best, Don Bauder

May 22, 2011

The team currently pays $700,000 per year in rent.

Simply moving the rent to market solves all maintenance issues plus the city can make a profit.

Here is how it works.

Tampa Bay pays $8.1 Million per annum in rent. I think San Diego should charge at least $10 Mil.

To make the calculation simple, let's assume the rent stays the same year after year and the discount rate is 5%.

The Net Present value of an annual $10 Mil. rent is then the following:

NPV = Annual rent divided by discount rate = $10,000,000 / 0.05 = $200,000,000.

Therefore by simply bringing the rent to market, the City has created a net present value of $200 Mil. against which it can easily draw a loan of $80 Mil. or even $100 Mil. for stadium improvements. It can also book a profit of $100 Mil or more.

And this is not the only part of the potential revenue. As Don commented before, the other substantial part is the naming rights revenue. So, let's say a good negotiator for the City can strike a deal for $200 Mil. for extending Qualcomm's rights for an additional 20 years plus the right of first refusal (I actually think the City should get $500 Mil. for that , but hey, let's not be greedy like someone we all know).

So the City can come out of this a winner and the citizens can take actual civic pride from engineering a deal that makes all of us feel and look smart.

May 24, 2011

As Don commented before, the other substantial part is the naming rights revenue. So, let's say a good negotiator for the City can strike a deal for $200 Mil. for extending Qualcomm's rights for an additional 20 years plus the right of first refusal (I actually think the City should get $500 Mil. for that , but hey, let's not be greedy like someone we all know).

The City of San Diego should have received ALL of the $154 MILLION naming rights of Petco Park, they did not receive a sinbgle penny.

Even split 50% would have been $77 million, but the money all went to John Moores, a billionaire. That kind of fraud cannot happen without payoffs, without quid pro quo bribes. That kind of fraud happens for a reason, just like the so called "ticket guarantee" the Chargeres received.

I mean, who in the business world would agree to such ridiculous one-sided nonsense?? NO ONE WOULD, the fix was in.

The fix will be in on any naming rights for Jack Murphy too. Mark my words.

BTW-the $18 million Qualcomm deal was a very good deal for the City when it happened, it was a market rate rent, but it was ALL paid UPFRONT-$18 million cold hard cash upfront, instead of $900K over 20 years. The present value of money therefore made that deal well above market for the time. Of course back in the mid 1990's these naming right deals were peanuts compared to what they are today.

May 24, 2011

SurfPuppy619:

This is good info.

So, how much do you think is the market rate for San Diego NFL team naming rights, given the fact that LA just cut a 30-year deal worth $700 Mil without even having a team yet?

May 25, 2011

That kind of fraud is inherent in naming rights deals. The teams get the revenues. Best, Don Bauder

May 25, 2011

Historically in these pro sports deals, there has been no such thing as a good negotiator for the City. Best, Don Bauder

May 25, 2011

Why not? I would think that a great negotiator is worth every penny.

May 25, 2011

Actually the city's leadership is setting up the voters to be snookered again

Sanders is getting under the table kickbacks, all of the clowncil are.

May 22, 2011

Are you suggesting we look for contributions that went to a numbered account in the Cayman Islands? Best, Don Bauder

May 22, 2011

No, I bet it was a cash pay off.....with $20's, unmarked and non-sequential.

May 22, 2011

The $20s would make a big bulge in your pocket or force you to carry a very large briefcase. How about $100s? Best, Don Bauder

May 23, 2011

As of right now, there is no NFL. The League was only a set of agreements, and the owners won't meet those agreements. If the league explodes, not impossible with so much hot gas in the room, the stadium deal would also blow up.

A new stadium will also need maintenance and improvements, and with a retractable roof and fancy TV screen, will likely cost more than the current stadium. Cheaper maintenance might be another reason to keep the present design and location.

We should also consider the toxic waste underneath the present site. Long term this should be fixed perhaps, but this won't be cheap,

Perhaps those proposing this think the end of the world is soon, so they might as well run up their credit cards.

May 21, 2011

Hey, an $80 million repair job is cheap, particularly if it would be done over eight years and much of that $80 million really isn't necessary. I suggest that the City get those who would benefit from the stadium -- the media, for example -- to chip in. Here's an idea: the telecom company Qualcomm got an incredibly good deal in 1997 when it got 20 years of naming rights for only $18 million. The company, now a corporate giant, has benefited greatly from this name association. So why can't Qualcomm agree to pick up the tab for much if not all of the repair in exchange for naming rights for another 20 years? It would be a win-win -- for the City and for Qualcomm. Other necessary steps: the Chargers would have to agree to stay (And they should -- the stadium is far better-located than anything near Petco). If the Chargers insist on going to LA, which they covet, the NFL could agree to put another team, possibly an expansion team, in San Diego at Qualcomm. It's the kind of compromise the NFL must start making in light of civic de facto bankruptcies across the country. The NFL will have to abandon its shakedown racket: build us a stadium or we move. It worked for many years, but this is a new environment. Best, Don Bauder

May 22, 2011

Don:

This is an excellent idea re:naming rights. In fact, beyond excellent. It is now a requirement that the City should try to mitigate its losses and this is a very legitimate way to do it.

Again, this is the way to go.

As far as Chargers going to LA this is pure fantasy/scare tactic. It's insulting to fans' intelligence to repeat such trash.

May 23, 2011

The idea for having Qualcomm pick up repair costs in exchange for naming rights came to me from a friend whom I am not at liberty to disclose. It wasn't my idea. I do believe that the Chargers covet the LA market. I don't believe the chances of their going to LA are fantasies. Best, Don Bauder

May 23, 2011

Let me explain why it's a fantasy:

Let's do some back of the napkin math:

Exit fee from Q: $24 Mil. NFL entry fee for LA market: $500 Mil. Net Present Value of New LA lease: $240 Mil.(note 1)

Total Cost of LA Move in Present $s = $764 Mil.

Note 1. I used an imputed annual rent of $12 Mil. for the LA stadium discounted at 5% (what Jerry Jones pays for his bonds). The formula is NPV = Annual Rent divided by discount rate (an annuity).

So, the whole key in assessing the cost to move to LA is the NFL entry fee. In a prior lawsuit filed by Al Davis about a failed deal in Hollywood Hills, he put the value of that market at $1.1 Billion.

So, ask your friend if he knows what the NFL LA entry fee is. That's the million $ question.

May 24, 2011

If it's that expensive, will any team move to LA? Or would an expansion team go there? It would have to pay a huge fee to be a new team. Best, Don Bauder

May 25, 2011

You got a point.

But I think it's not unexpensive.

May 25, 2011

...inexpensive

May 25, 2011

omho, the real bottom line is what will make the most profit for those controlling the games.

May 22, 2011

Of course. Owner profit is the bottom line -- always has been. Yet owners will say with a straight face, "It's a game." One of the best books on the topic was written in the early 1970s by Bernie Parrish, an ex-NFL player. The title: "They Call It a Game." The book not only got into the owners' greed, but had a chapter devoted to the owners' organized crime backgrounds. That was followed by Dan E. Moldea's 1989 book, "Interference: How Organized Crime Influences Professional Football," which went into great footnoted detail on the organized crime backgrounds of owners. You have to understand that while the NFL piously proclaims that players may not associate with gamblers, the whole idea is a farce, because the owners themselves are high rollers, quite often with organized crime backgrounds. Best, Don Bauder

May 22, 2011

Not surprised. Most of them, owners, look like thugs anyway.

May 23, 2011

They look like thugs and act like thugs. Yet they are celebrated as paragons of civic virtue in the media. Best, Don Bauder

May 23, 2011

So did you just pull that $600 million dollar figure out of thin air or did the AEG propaganda machine give that to you?

May 23, 2011

The very least this stadium will cost is $800 million. You have to consider a bunch of costs such as moving the bus facility and dealing with a plume. My guess is that any cost -- particularly if the stadium will be roofed for convention events -- will be at least a billion dollars, and the City will pay for $800 million. I was being conservative using $600 million. The early estimates of these stadium costs are always very low. Best, Don Bauder

May 23, 2011

The new costs of acceptable NFL stadia is a minimum $1 Bil.

May 24, 2011

Yes, new stadiums are running $1 billion or higher. That's because pro football has now become an elite entertainment experience, with massive TV screens, fancy dining, etc. Best, Don Bauder

May 24, 2011

All politics (in the current vernacular) is double-talk.

May 23, 2011

Or quadruple-talk. Best, Don Bauder

May 24, 2011

Don:

The Chargers can covet the LA market all they want, but the idea that they can move there is a fallacy of the first magnitude that needs to be urgently debunked.

The rights to that market belong to the NFL and entering it has a substantial fee attached subject to the approval of 32 owners. When Al Davis initially tried to move Oakland to LA the NFL voted him down 22-0. He had to sue to enter the LA and he had to pay a fee. Now, Davis claims that the LA market belongs to him based on the fee paid and he is prepared to sue any team which contemplates an LA move.

However, the true insiders know that the LA market is not for sale because it removes negotiating leverage for the NFL, especially now that absent public subsidy new stadia are unfeasible.

This is a point that needs to be driven home, because it changes the whole chemistry of the city's negotiating position.

May 24, 2011

The NFL is desperate to put a team in LA because it is such a huge TV market. Some argue that the possibility of moving to LA is only being used to get various geographical areas -- San Diego, Jacksonville, Buffalo, St. Louis, particularly Minnesota -- to build subsidized new stadiums. That strategy was definitely used in baseball when Tampa Bay had a stadium but no occupant. Several teams such as the White Sox threatened to move to Tampa Bay as a ploy to get the new ballpark. (The White Sox's strategy succeeded.) But LA is too juicy a market to be used as a ploy to get a new facility. Tampa Bay is a small market. In re Al Davis: remember, he moved to LA when there was already a team there, the Rams, which later moved to St. Louis. Now the team says the stadium it got the first time is no longer good enough and it wants to go back to LA. Where these owners should go is jail. Best, Don Bauder

May 24, 2011

Don:

This is a quote of a Forbes article on the matter:

"For all the ongoing fanfare and speculation about Los Angeles, the town’s appeal as an NFL market is limited. Competition from other sports and entertainment options is plentiful. With no local television revenue to capture under the league’s money-sharing T.V. model, the natural big-market advantage that other sports leagues enjoy doesn’t really apply. And the NFL doesn’t necessarily need a franchise there to boost the area’s general Sunday viewership, notes [sports business consultant Marc] Ganis. As an open territory, L.A. is the beneficiary of an NFL doubleheader every week, with the league free to feature its most appealing match ups. Giving up the certainty of an established season ticket base to start from scratch is a risk most owners would rather avoid."

May 25, 2011

I think it is a great market desperately coveted by the NFL but I do concede that the Rams and Raiders (when there) didn't draw as well as a team in that market should draw. Best, Don Bauder

May 25, 2011

Don:

Allow me to insist on this point. The reasons Chargers are not a "fit" for LA are (a)market related (b) ownership related.

San Diego is the 8th most populous city in the nation. You don't swap #2 with #8. In fact all the top tier 20 markets are not exchangeable with LA. The bottom 12 markets (21-32) probably are, but San Diego is not one of them.

The owner here has a bit of an inferiority complex, so him moving to LA and mixing it with some really radiant personalities is not in his comfort zone.

Even though the LA market is a theoretical possibility for an NFL team, the Chargers under the current ownership are anything but.

May 25, 2011

The size of the city means nothing. The size of the market is the key. San Diego has 3.1 million in its market. LA has 19 million. End of story. Best, Don Bauder

May 25, 2011

Yeah, but only 75,000 or so fans can go to a given game.

The NFL already has the 19 Milion market with the double header best two games on any given Sunday.

You think LA fans will sacrifice that to go and see the Chargers? They can do so any Sunday, either drive or by air to SD.

May 25, 2011

I do think LA fans would sacrifice the Sunday doubheader on TV to watch a game live, whether it be played by the Chargers, Vikings, Bills, etc. Best, Don Bauder

May 26, 2011

As someone who has lived in LA all my life, except for college, I am pretty certain that LA would support an NFL team, as long as it remained a winning team. Which of course could be an issue for the Chargers.

May 26, 2011

Here's a perfect example of the importance of market size. According to the NFL, in 2008, NFL telecasts had only a 7.2 household rating in Los Angeles,lowest of any major market. But because of the sheer size of the L.A. market, that 7.2 share represents more viewing households than New Orleans, Buffalo, Jacksonville and Kansas City COMBINED. I had do a little research on this, but according to Nielsen, the L.A. market had 5,654,264 tv households in that year. The equates to 407,104 households watching . By contrast, the SD market had only 1,066,680 tv households. Even if the SD market had the highest share, the 14.9% that NY has, there would be only 159,935 tv sets tuned to the NFL, barely 1/3 of the L.A. market

May 27, 2011

"I do concede that the Rams and Raiders (when there) didn't draw as well as a team in that market should draw" Don Bauder, In reference to the Raiders you are correct. However you are in error concerning the Rams attendance. When the Big A was configured for football, capacity was about 65K. From the very first season until the late 80's, many, if not most game were sell outs, discounting the '87 season. I know. We were season ticket holders for many yrs. As I recall, attendance started lagging about midway through the 90 season, From 90-93 the Rams never even had a .500 team. Georgia spent very little money on aquiring good players and traded away many of the ones she already had. You have to understand that L.A./O.C. is no different than any other area when it comes to sports. With few exceptions, fans are not going to pay good money to watch a bad product. Even more so a team that loses 60% of it'd games over 5 years. That's why people quit showing up and that's why the Rams left.

May 25, 2011

That only goes to show how wrong Forbes can get things. "Competition from other sports and entertainment options is plentiful" defines almost every ADI in the nation, yet the NFL prospers and most owners get rich. Again, Forbes reports nonsense.

May 25, 2011

I do think, though, that there are more outdoor entertainment options in LA, relatively speaking, than in other markets. Best, Don Bauder

May 25, 2011

The rights to that market belong to the NFL and entering it has a substantial fee attached subject to the approval of 32 owners. When Al Davis initially tried to move Oakland to LA the NFL voted him down 22-0. He had to sue to enter the LA and he had to pay a fee

The NFL/Raiders/Davis lawsuit had nothing to do with a fee, it had to do with the NFL Rule/Requirement thta NAY move required a 3/4 % approval from the other NFL owners-Davis sued on Anti-Trust grounds and won, not over any fee.

If the NFL rule had been a SIMPLE MAJORITY vote to approve or deny a move, then the Rule would have been constitutional, but the arbitrary 75% approval was held to be unconstitutional.

And last, Davis cannot claim to hold two geographical areas as "his", Oakland and Los Angeles. He is in Oakland, he went there of his own free will, he has no standing to sue anyone for moving into the LA market.

I do not recall a "fee" being involved for the Oak->>LA move, are you sure about that?

May 24, 2011

Al Davis and his lawyers can be expected to make all sorts of claims, no matter what the NFL rules and the U.S. law is. Best, Don Bauder

May 24, 2011

Al Davis did not pay a fee because the NFL owned the "rights" to the L.A. area. The NFL has specific procedures for relocating a team. A team that wants to relocate from must make an application. Among other things, the application has cover issues of expected profitability in both cities, along with perceived fan support and the attitude of municipal authorities in both locations. They also have to address the issues of the actual and any proposed stadiums and the terms of the leases. They can also bring up any other issues they think are relevant to its case. The team’s application is submitted to the commissioner, who then issues a report to the League board and eeventually there is a vote. I think there is a specific timetable to all of this that is followed. I don't know exactly what it, but it does relate to the regularly scheduled owners meetings. The NFL can , and apparently most of the time does, require the team to pay a relocation fee as a condition of the League’s approval. Basically, a bribe to me. When the Rams moved to St' Louis, their relo fee was $29 million. I don't think Al Davis ever paid a relo fee. His judgment when he won his case against the NFL was about $35 million and ended up getting about 1/2 of that. His lawsuit was over the antitrust issue. My assumtion has always been the either the NFL gave up on the relcation fee issue when they lost their case or that Davis ultimately accepted 1/2 he was awarded because the relocation fee was not part of the court case. The NFL bases their relocation fee based on how much a team’s value increases by moving to a new market, everything I have read puts the amount the Chargers would have to cough up at somewhere around $200 million as a minimum. If the Spanos clan only sells part of the team, they would most likely have to pay part of it. I can't see a group agreeing to only a partial interest AND paying the whole fee. BTW, the NFL, not the teams control the designated market areas, as they call them. They are the ones who came up with the 75 mile rule, the secondary market rule, the blackout rule and all of the other rules regarding team territories. Personally, I would prefer the downtown location, but I would go to either. That said, I don't see either as coming to fruition anytime soon. I still remember John Semcken, Roski's VP at Majestic saying in an interview on TV a year ago this past Christmas that there was a 50/50 chance of a team returning to LA for the 2010 NFL season and a 100% chance for the 2011 season. How well has that gone so far???!!!

May 24, 2011

Roski hasn't been as swashbuckling in recent months as he previously was, but he is sending his minions to deprecate every plan that AEG puts forward downtown. It's high comedy. Best, Don Bauder

May 25, 2011

Tom:

The $200 Mil. relo estimate seems reasonable for the LA market.

This is why Spanos is offering the same contribution towards a new San Diego stadium.

However, in the San Diego case the naming rights alone would be enough to reimburse the owner contribution and then some.

That's why I think the owner is not honest with the people of San Diego. He is offering money that basically he will recapture soon afterwards and in any case the naming rights belong to the City but his proposal on the new stadium assumes that those are his for the take.

As Don said, the City can strike(negotiate) a nice naming rights deal and then fix the Q and then enjoy any surplus.

Viewed under this context, the owner is proposing a deal which is 100% OPM (Other People's Money). He wants to use OPM as a downpayment and wants City OPM for the rest. This is ridiculous.

May 25, 2011

True.

Davis lawsuit had nothing to do with the "entry fee".

However, having prevailed in his lawsuit Al Davis has paid a substantial entry fee (in 82-83 dollars) which he claims must be reimbursed to him (with interest) if another team (other than the Raiders) enters the LA market.

I am not arguing the validity of the claim; simply I am trying to discover what the "entry fee" for LA is.

In a non-related issue, Davis sued the NFL again for a failed deal in Hollywood Hills; a case which he eventually lost.

His alleged damages on that deal were $1.1 Billion or so, which goes to show you what the value of a "license" to operate the LA market would fetch.

I am of the opinion that the "NFL entry fee for LA" is a very substantial figure.

May 25, 2011

And keep in mind that when a team pleads poverty when asked to put a reasonable amount into a stadium, the billionaire owners are raking in fees, such as expansion fees, all the time, in addition to the obscene amounts they make from TV, luxury seating, etc. during the season. Best, Don Bauder

May 25, 2011

Yeap.

May 25, 2011

Pro football teams are big money makers. But they won't let anybody see their books. Best, Don Bauder

May 25, 2011

The revuenues of each team are pretty much well known.

Now Dallas is a money maker(due to their facilities and brand name) but not the Chargers.

The money you are talking about is in the team value appreciation. Spanos bought the Chargers for roughly $65 millions in '82(?) and they are now valued at $900+ Mil. So, the way to unlock value is to take on debt, if you are a team owner. The Chargers have something like 13% total debt as a % of total value.

Anyway, Forbes 2010 has all the team valuations if you Google it.

In a good year the Chargers can make $10-15 Mil. of net revenue. So, I wouldn't call them big money makers.

They are small money makers but the team values appreciate at an incredible pace.

May 25, 2011

zeus, you are not paying attention. There is no "entry fee" There are only two "fees" a team would have to pay. If it is a new expansion team, it's the franchise fee. It's exactly what it sounds like; the price someone pays for buying an NFL franchise, basically no different then buying a McDonald's franchise. That fee is established by the other league owners and is loosely based on the expected value and expected profits of the newly created team.The other fee is the relocation fee already discussed. Reread my previous post for a description. The determination of that fee won't be made until a specific team considers a move, because it is partly based on the increase value in value the team gets from moving. For example, the Dallas Cowboys are valued at about $1.8 billion, almost 2x that of the Chargers. A relocation fee for them would be considerably higher than of the Chargers. Conversely, the Raiders are worth $150-200 million less than the Chargers. But instead of e lower relocation fee, a move by them into a market like LA would likely result in a higher fee because of a larger increase in over all value than the Chargers would gain.. Al Davis may think he is owed money if a team moves to L.A., but he will never see a penny. He doesn't "own" the rights to the L.A. area any more than the Oakland area, the NFL does. As I stated above, it was a relocation fee. If you move, you pay and you don't get your money back if someone replaces you in that location. It's not a refundable "fee". Davis just didn't lose his case over the Hollywood Park stadiun(in Inglewood, NOT Hollywood Hills, btw) he got THUMPED. What he actually sued for was breach of contract, unjust enrichment and other violations of the league constitution and bylaws along with claims that the NFL acted with "oppression, malice or fraud " in dealing with the team. He tried to claim juror tampering and misconduct when he lost the verdict 9-3. The final ruling in the case by the California Supreme Court was UNANIMOUS. Some of the jurors in the original trial later said the reason they found in favor of the NFL was because of the press release the Raiders themselves put out when they moved. It simply said "The Raiders organization has chosen to relocate to Oakland".

May 25, 2011

Tom:

I hear you.

So for a top of the line team such as Dallas moving to LA would probably result in a negative or very small relo fee.

But the Chargers are in the lowest 1/3 of team valuations, so their relocation will result in a substantial relo fee.

Which is what, according to your opinion?

As for Davis, I am aware of his particulars. What I am saying though is that Davis will attempt to exact "something" from any team entering LA. Now, his claim might not be solid but some may attempt to settle on the basis of nuisance factor. As such, when I look at the Chargers this is another cost I have to consider.

BTW, do you see any scenario of the Chargers moving to LA that does not have a minimum rent of $10-12 Mil a year for a new stadium?

O.k. the Net Present Value of that alone is in the $200-250 Mil. category.

So, at minimum the Chargers move will cost them in present dollars upwards of $300 Mil. (lease+termination fee+relo fee+ other)

If so, why is Spanos offering only $200 Mil. for the new stadium here? Shouldn't he offer at least as much as the cost to relocate?

And if so, given the NFL contribution of $100-200 Mil. the owner should offer the value of at least $500 Mil.(about twice of what he is offering now).

May 25, 2011

No actually you don't hear me. I used Dallas as an example because they are the highest valued team in the NFL and the second most valued sports team in the world, behind only Man-U. The wouldn't move into the countries 2nd largest market and lose value. A large portion of their value is due to their new stadium. Assuming a stadium of equal value, they would indeed increase in value do to the change in market. The Chargers are only the 24th most valuable team in the NFL. Generally speaking, any team not in the New York Market, would benefit from moving to a new stadium in the # 2 market. I have no idea on the rent of the stadium. There are way too many factors for any outsider to have any idea. Accordingly I have no opinion on what the relocation fee,. The NFL will make that determination. Much of it has to do with the revenue generated by the stadium, so until plans are finalized and approved and a stadium location and capacity is known, it's all just speculation. As I said above, the general concensus in the media is a MINIMUM of $200 million depending the factors I mentioned plus many more I'm sure. As I said there will be no money for Al Davis. Zip, nada,nunca, zilch, zero. He has no grounds. The suit will never make it to court, there will be no settlement. Al Davis will NOT be a factor in any way. At this point, it is high likely that Davis is not even mentally competent to participate and he is the only one that wants to due. The lawyers just do what he asks because it's a fat payday. I have no comprehension of why the Spanos clan would offer any particular amount towards a new stadium. I would say that if the Chargers move, it will be precipitated by at least a partial change in ownership, meaning the new owners will pay a percentage of the relocation fee, probably at least equal to their percentage of ownership. I would also expect that in such a case I would expect that the new ownership would be the majority, if not the complete, cost of the buyout from the current lease. ANY smart businessman would make that a condition. I haven't really followed the Chargers since Dan Fouts retired and really don't care either where they play in San Diego or if they stay. I will say, as someone who has been to several of the newer stadiums, including Cowboy Stadium, that by comparison the Murph is a dump. Agree, disagree, I don't care. I have been to the others and that's my opinion. Feel free to disagree.

May 25, 2011

No, I agree that the Dallas stadium is a jewel, top of the line stuff.

It's just not doable in California. Thank Heavens this is not Texas.

As for Q being a dump, of course it's not. It's just an old stadium.

As a fan, I couldn't care less if the stadium has amenities or not. I don't go to the stadium to see the freaking structure over and over again. I go for the team.

BTW, the average ticket in Jerry's World is $180, and I never pay for my tickets.

I am always a guest.

May 25, 2011

The idea that a city -- any city -- would plunk down half a billion or more to subsidize a stadium providing 30 hours of football entertainment a year (and the two preseason games are not much entertainment, so it's really 24 hours) is so preposterous that you wonder why these deals continue to go through. Best, Don Bauder

May 25, 2011

Agreed.

May 25, 2011

Don Bauder, You keep referring to a football stadium as being used to provide only a few hours of entertainment per year. Not all football stadiums are used for football only, I'll reference back to the above mentioned Big A, Anaheim Stadium. I can recall back when Arte Moreno bought the stadium a discussion of its other uses. Prior to his purchase of the Angels , the Big A was used for quite a bit apart from baseball and football and Anaheim wanted that to continue.Somewhere around 4 million people went their every year. You're talking 500k-600k in attendance NOT related to BB or FB.There were in upwards of 150-175 event held there most years. Discounting FB and BB, that's one event every 4 or 5 days, as an average. I can remember from the news a couple of years when Billy Graham had his crusades their and another 500k were their above the other events. Several times thru the years, we've gone to watch the kids of our friends play in CIF games. Every been to a high school football game with 20-25k in attendance? It's very cool. My point? Not all stadiums sit empty 355 days of the year.

May 25, 2011

No, they don't.

And this is the art of management in booking events and generating revenue flow. Not all teams and locations can do that.

Some are better than others.

May 25, 2011

Several times thru the years, we've gone to watch the kids of our friends play in CIF games. Every been to a high school football game with 20-25k in attendance? It's very cool.

The CIG championship games the last few years have been played at the newer Carson Home Depot facility, which is used for soccer and football, and is a beautiful stadium, minus all the BS like "luxury boxes". The Chargers used to hold their pre season training camp in Carson but I don't recall if they practiced at the Carson stadium or not.

Holds 25K or so and is really awesome if you ask me, showing you dont need al the new igh tech $$$$$$ mumbo jumbo-dont get me wrong, the high tecj screens may be nice but are not a cost effective need.

May 25, 2011

I think they have played the Championship games have been played at the Home Depot Center for the last 5 yearsThey were working with a series of 2yr contracts. I'm not aware that a longer contract has been signed. I wasn'trefering to just the Championship game. Sectionals are played in various locations and next years there will also be CIF regionals. The Home Depot Center holds 27k. It cost $150 million in 2002. How much would it cost today? How much would it cost if it had been built for say a 75K capacity instead. BTW the Home Depot Center was developed by and is owned and operated by AEG.

May 25, 2011

Soccer stadia are a completely differenat animal.

Any sports architect can tell you what is the per seat cost for each different sport.

May 25, 2011

I wish the pros had the simplicity of the high school stadiums. Best, Don Bauder

May 26, 2011

Yeah but can you build a stadium that hold 75k using the same engineering methods and materials as in a high school stadium. I wouldn't think so.

May 26, 2011

Soccer stadia cost about $2,000 per seat.

Football stadia around $12,000 per seat.

May 25, 2011

Home Depot Center: $150 million, 27k seats. $5555 per seat

Red Bull Arena: $225 million, 25k seats. $9000 per seat.

University of Phoenix Stadium: $455 million, 63,400 seats. $7176 per seat.

Cowboys Stadium: Cost $1.3 billion, 80000 seats. $16500 per seat.

You were saying again?

May 25, 2011

Cowboys Stadium: Cost $1.3 billion, 80000 seats. $16500 per seat.

=== Take out that 300 foot sony jumbotron and the price woudl drop to $5K per seat I bet! I love the Home Depot center in Carson, awesome place.

May 25, 2011

Surfpuppy619, I am making the assumption that your comment was meant as sarcasm. The screen was only something like $40 million. A drop in the bucket in a $1.3 billion stadium.

May 25, 2011

The Dallas stadium was loaded with everything imaginable.

It has at least a 30% premium over a "normal" NFL stadium.

I like the Galaxy too, but I liked the Rose Bowl as well.

May 26, 2011

I've only beento one game in the RoseBowl.Could barely see. Best,Don Bauder

May 26, 2011

These are BS overinflated US numbers.

We are suckers in this country that's why.

Go to Europe and see the cost of state-of-the art stadia.

And learn something in the process.

May 26, 2011

Agreed. US stadiums should be simpler and half as expensive,(And the owners should pay for them.) Best, Don Bauder

May 26, 2011

The high tech screens are signs of an entertainment-obsessed society. Best, Don Bauder

May 26, 2011

I should have said 30 hours of PRO football. The Q is used for Aztec games and two bowl games. It's also used for other entertainment like tractor pulls. Best, Don Bauder

May 26, 2011

Actually, I think you did and I just missed it. We've been down to many events at the Murph over the years. Sky Shows, a lot of concerts,GNR and the Stones come to mind, soccer( I think Real Madrid is playing a match there sometime this summer). Wasn't it just last year that the filed was turned into the worlds largest slip and slide. And you can't forget when it hosted the world's largest slumber party 3 or 4 yrs ago. And for those inclined to imbibe, isn't there a beer fest there sometime during the summer? Yes the Murph has many uses indeed.

May 26, 2011

Either Roski or Anschutz would want a pretty hefty percentage of the team that would be relocating. Best, Don Bauder

May 25, 2011

The Spanos family is only offering to put in $200 million in a stadium here (actually much less because of naming rights, etc.) for two reasons: 1. The Chargers really don't want to stay here. Even San Diegans might vote down a preposterous offer; 2. Since both the Padres and Chargers have completely snookered City of San Diego lawyers, and voters, in the past, why not try again? The Chargers covet LA, but if the league turns that down, or some other team gets the plum, then the team wants a sweet deal in San Diego. Best, Don Bauder

May 25, 2011

Since both the Padres and Chargers have completely snookered City of San Diego lawyers, and voters, in the past, why not try again?

No one was snookered, the "give away the farm" deals were done intnetionally. You make it sound like the lawyers for the city were country bumpkins and couldn't write a decent deal-baloney, they gave away the farm on directives from Golding and others.

I have said it a million times, a first semester law student with just one semester of Contracts I under their belt could have wrote a better lease and done a better negotiation than what San Diego did with the Padres or the Chargers.

May 25, 2011

I am sure that Golding was giving orders, but remember that the City lawyers were working for Casey Gwinn, who was at sea in complicated deals, and couldn't negotiate. Best, Don Bauder

May 26, 2011

Blame it on the flack. Best, Don Bauder

May 25, 2011

Al Davis may think he is owed money if a team moves to L.A., but he will never see a penny. He doesn't "own" the rights to the L.A. area any more than the Oakland area, the NFL does. As I stated above, it was a relocation fee. If you move, you pay and you don't get your money back if someone replaces you in that location. It's not a refundable "fee".

Well then, if there is a fee to relocate, what did the Raiders relocation fee from LA>>>OAkland cost back in 1995 when the Raiders moved back???

It seems to me that the entire Oakland move back deal was based on Oakland/Alameda stadium authority/City of Oakland giving away the farm in goodies.

Oakland is a much less lucrative market than LA, so the NFL should have PAID Al Davis to move back if it were based on value to the team, at leat it seesm so to me.

May 25, 2011

As I remember it, the Oakland/Alameda BOS voted unanimously to approve the deal with the Raiders. The agreed to something like $200 million in renovations, a lease at something like $500k, that coincidentally is supposed to expire after this coming season, the one that's probably not going to happen. Part of the deal also was that Coliseum authority got to keep the PSL fees for the first 10 years, which I'm sure they used to help pay for the bonds they issued. I don't believe that the Raiders payed a relo fee when they moved back. In fact, I think the NFL called a special vote just a few days after the BOS approved their deal. I read at the time that the Raiders met league requirements to relocate and that they weren't taking away an expansion site the way the Rams did. With the 49ers already in the Bay area, they weren't even thinking about an expansion team and who else but Al Davis would take on the 49ers. If LA had ever been able to get it's collective shit together , they would have had a team. In 1999 the NFL owners approved the resolution that awarded LA the expansion franchise that eventually became the Houston Texans. There were also a couple of teams looking to move at the time. I remember one of them was the Cardinals. They were tired of playing at ASU in Sun Devil Stadium. The Raiders have probably averaged 45-55 K since they moved back. That's less than in the LA Coliseum, but in Oakland, Davis has something he never had in LA, luxury boxes. And he doesn't have to share that revenue.

May 25, 2011

Part of the deal also was that Coliseum authority got to keep the PSL fees for the first 10 years, which I'm sure they used to help pay for the bonds they issued

I thought the PLS's were a complete bomb on Oaktown and did not sell, or at least did not sell for anything near the original asking price, wasn't that turned into a lawsuit too??? Yes as I recall. . . And he doesn't have to share that revenue. ================= Yes, this is what is so funny. The so called "luxury box" revenues are not spilt with the league, all of it gos right into the owners pocket. That is a rule, of the NFL, designed to milk the localities into building new stadiums by making the bogus claims that the owners without the BS luxury boxes cannot compete with stadiums thta do have those boxes.

Real simple solution to that one, make the luxury box revenue part of the gate revenue. Problem solved and everyone is again on the same level.

But those boxes are an intentional scam, so that wont happen.

May 26, 2011

Yes and no on the PSL's. Remember the city of Oakland and Alameda County ran the PSL program, not the Raiders; all of the money went to them. The original agreement was for 10 yrs. At one time that had probably 25k license holder but by 2005 I think less than half of the season ticket holders bought PSL's, so when they original term expired 5 yrs ago, they didn't renew it and as part of the settlement for the lawsuit Davis had against the Oakland-Alameda County Coliseum Authority , the Raiders took control of all of the ticketing and marketing

May 26, 2011

That's why the luxury box deals are still another NFL scam. The teams don't have to share the revenue. So the stadiums built only a couple of decades ago, before luxury boxes became the rage, can be called out of date. The team can claim that it won't be competitive with other teams unless it gets a new stadium with luxury boxes. Best, Don Bauder

May 26, 2011

Remember that in recent years the Raiders have fielded a lousy team. That may have made a difference in attendance. Best, Don Bauder

May 26, 2011

The Raiders weren't too bad in the late 90's under John Gruden. They went to the playoffs (got screwed in one on the play which led to the very rule that the Chargers got screwed on last year) a couple of times and I think went again with whoever was coach the 1st year after Davis fired Gruden. At that time their attendance was pretty good. But even so, a lot of people don't want to pay extra just to be able to buy season tickets in the same seat every year. Add that to a really bad team and well I'm sure anyone can figure it outThat was basis for Davis' suit against the Coliseum Authority, that they mislead the Raiders about future attendance revenue, among other things. That's why not that many pro teams have them. Oddly enough, I think the Padres still have them. I wonder how that's workin' out thees days.

May 26, 2011

I don't get the logic. Oakland is a much less lucrative market, so the NFL should have paid Davis to move back to Oakland from LA? Explicate, please. Best, Don Bauder

May 26, 2011

Tom:

Just to be clear:

In a possible relocation to LA, the Chargers will be paying two separate fees.

  1. A termination fee for the Q, estimated at $24 Mil.
  2. A relo fee. This is the same fee I call "LA entry fee" because my description cuts more to the essence. This is a fee a team has to pay the gatekeeper(NFL) for the perceived value of a bundle of rights over and above what the team has today. You might be right about the term "relocation fee" (but it's a sissy term and sounds like you are paying your local U-Haul movers). My term is more animalistic and openly describes what the fee is all about. It's the same fee type that you have to pay at the gates of Disneyland to get in. Once you get in it's up to your skill as to the quality of the experience.
May 25, 2011

Relocation fee, entry fee, it's just semantics because they are the same thing. I refer to it as a relocation fee because that's what the NFL calls it. You can call it what you want. But again you don't pay attention. It's not a fee for " the perceived value of a bundle of rights over and above what the team has today". It's a fee based on the increased value the team will gain from moving into a larger media/fan base market and from playing in a new, probably larger stadium. Not the same thing Since you only joined 2 days ago, have only commented on this story, and continually have ignored factual information provided because it seeming doesn't fit your ideals, in my opinion you have nothing to contribute to this discussion, which, by the way has already been played out several times in the Reader. In other words, you appear to be nothing more than a troll. As such, you can find someone else to share your witty(not) repartee with. 'm off to find a more intelligent conversation.

May 25, 2011

Hey Tom:

That's not nice. You sound particularly sour.

May 25, 2011

We all make sour statements on this blog. Best, Don Bauder

May 25, 2011

Not sour, Don. Just don't like trolls.

May 25, 2011

Now we're getting some animalistic invective. Best, Don Bauder

May 25, 2011

Well, it's entertainment Don.

What do you think the NFL is?

A bunch of animals chasing a football; in an entertaining way that is.

May 25, 2011

Of course it's entertainment. But they call it sports. Best, Don Bauder

May 25, 2011

Hey Tom:

I have both build stadia and looked at projects that never made it beyond paper.

As with everything in life you can pay inflated prices up to the limits of your unsophistication. Skilled professionals know how to buy services and how to take advantage of flactuating material and labor costs. And they hire the best in the business to guide their decisions in pricing based on multiple competing offers.

The stadia costs you are showing are a testimony of stupidity and lack of professional skills in execution.

And I don't know why, but here in the US we are particularly prone of paying exaggerated prices for large scale/public character projects.

Go to Germany, England, Europe and we can find a plethora of state-of-the art stadia for the right price.

May 26, 2011

I have read about some European soccer stadiums that looked reasonably-priced. Best, Don Bauder

May 26, 2011

Don Bauder, you are correct that there are many reasonably price soccer stadiums in Europe. But you also have to understand that UEFA categorizes the stadiums. Some are required to have as little as 200 seats. Even an elite stadium is required to have less than 10k seats. I would also point out that when it comes to the League Finals, these stadiums see no action. That's when they go to the big boys. This year it's at Wembley. Wembley holds about 90k and cost a mere $1.5 billion(that's $16666 per seat for those counting) Next year it's in Germany in a stadium that seats about 70K and only cost about $1/2 billion. Just like in the U.S. there is no hard and fast rule about how much a stadium costs. It depends om what you want or what you can afford. For example, Man U, the most valuable sports franchise in the world, plays in a stadium that cost only £90,000 to build. Of course, that was in 1909. But let's not get ahead of ourselves. They have also spent somewhere between $25-$35 millon in renovations and expansions since the early '90. It's no different than in the U.S. You can find inexpensive stadiums, relatively speaking. But when you get to the big leagues the biggest and best teams want the biggest and best stadiums.

May 26, 2011

It is ridiculous and absurd that pro sports teams want new stadiums and arenas every 15 to 20 years. University stadiums were built 100 years ago and are still going. The Cubs and Red Sox ballparks are around 100 years old. In pro football, all that money is shelled out for 30 hours a year of football entertainment. Best, Don Bauder

May 26, 2011

It may be ridiculous and absurd, but 19 NFL teams have built new stadiums in the last 15 yrs and very few if any utilize their stadium for only 30 hours per year. And it's just not in the US. There are probably 3 dozen soccer stadiums being built or recently completed in Europe. And these are not small stadiums. They range in capacity from 25k to 80k with most of them being at least 50k in capacity. As far as I have been able to find, none of these are "$2,000 per seat" stadium. Many of them are $150 million or more. And it's not only ball sports. A few years ago Spain built a new tennis complex that seats about 18k and spent over $200 million to do it. That's over $11k per seat, btw, more than all but 2 American football stadiums.

May 26, 2011

As the Romans said, the proletariat will be happy with bread and circuses. Best, Don Bauder

May 26, 2011

And if there's no bread, then as Marie-Thérèse said, "Let them eat cake", or at the very least brioche.

May 26, 2011

And which of those European countries are you a native of, zeus? Because you are clearly not from the U.S. Your syntax and grammar help spell that out pretty clearly. We are talking about football and soccer in the U.S. not Europe, so what you can find in Europe is irrelevant. That said, I would say name a "state-of-the art stadia Germany, England, Europe" that was built in the last 10 yrs at a total finishe cost of only $2k per seat. As I said, we are talking about stadiums in the U.S. There have been 19 new football stadiums built in the last 15 yrs. Only ONE cost in the range you gave. The two most extravagant are Cowboys Stadium and the new Meadowlands Stadium. But the rest cost considerably less that you figure, most less than half that figure. I don't know much of soccer stadiums as I,m only a fan during WC and the Olympics, but I can tell you that the newest soccer stadium opens in KC next month. It seats 18,500 and cost about $150 million. That's over $8k per seat, 4times your purported "cost" of a soccer stadium. You're the one who made the statement of what these stadiums cost with no qualifcations as to amenities. you can call them BS overinflated US numbers, but they are what they are.Some are higher, most are quite lower. Like it don't like it, I don;t care. the facts are the facts. If you want to believe that the Chargers don't have any option to move, feel free. Everyone's entitled to their opinion. Obviously from choosing a name like zeus, you have a pretty high opinion of yours. Not all of us share that opinion.

May 26, 2011
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May 26, 2011

Let's see now. Who was it that said of their trip to Cowboys Stadium "I never pay for my tickets. I am always a guest." ? Why that would be from zeus, yesterday. Who bragged that "I have both build stadia and looked at projects that never made it beyond paper" and told us exactly how much they cost with no data to back it up? Why again that would be zeus. Who has been challenged to back up their statements on stadium costs and has yet to do so? Still that would be zeus. Who has yet to provide any factual information to refute the information I have give? Once again, it is zeus. Who has attempted to spin the conversation in a different direction, such as from FB and soccer stadiums in the US to European stadiums, when presented with data contradicting his claim? As always, that would be zeus I never said I new anything about the "soccer Business". Quite the opposite in fact. I said the only time I follow it is WC and Olympics. I did take the time to visit the sites of several soccer teams to garner information about their stadiums. There are also a couple of very good websites that provide a list of and information about every current and every under construction sports stadium in the world. It was very interesting. For example, I found info on an open air volleyball only stadium in Spain that seats only 5k, yet cost $17 million. Based on your response, it appears I was correct in my assessment of you being from Europe. Contrary to what you say, I have not attacked you personally, except for calling you a troll, which is a matter of interpretation. That is unless of course, you consider, whether correct or not, being from Europe an attack. My wife is French and I'm pretty certain she would not consider that any more of an insult that she would being referred to as am American, which is what almost everyone assumes unless they hear her speaking French. Yet apparently you take it personally, I wonder why that is. Really, the only thing I've done is refute some of your statements with actual data, challenge you to do the same, voice a differing opinion and state the obvious that you have a high opinion of yourself. Yet you on the other hand decided to make it personal. One of the first rules in debate is not to make your attacks personal. Personal means emotional and when you get emotional instead of passionate, you've already lost the debate. We do agree on one thing: we don't care about each others opinion. Nice thing about this whole internet thing. Anybody can go anyplace and shoot of their mouth without providing any facts to back it and remain totally anonymous in doing so. Kind of like some republicans I've heard. LOL I just like to provide some actual factual info sometimes.

May 26, 2011
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May 26, 2011
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May 26, 2011

Let's get realistic: the Chargers lust after that LA market. It's a rich one. But the Chargers might not get LA so they want to have a fleece/deal in San Diego in their pocket. Best, Don Bauder

May 26, 2011

I have no idea why the conversation has morphed into cost of stadia and associated comparisons.

The issue here is very simple:

Does the Charger football owner have option to move to LA? The answer is a thunderous NO. (take it from Zeus). And anyone who believes that the owner does has fallen victim of misinformation and acute propaganda.

Therefore what the Chargers (ownership) want or don't want is irrelevant. What they get is what they have. A place to play at the Q.

If the condition of the Q is a problem then the team needs to negotiate a new rent with the city in the neighborhood of $10 Mi./year and then armed with the new contract and the naming rights the city will do the rest.

The very idea that the Chargers can dictate terms here is beyond laughable. It's absurd to even talk about it. The only entity capable of laying down terms is the city. Anyone who tells you otherwise is perhaps not a good practitioner of the negotiation process.

May 26, 2011

You have to realize, Zeus, that there is a good chance the Chargers will move to LA. It's not just a scare tactic, although other markets such as Minnesota are using an LA move as a threat to relocate, just as the Chargers are. These teams coveting LA are all going down two tracks: one is LA, the other is using LA as a method of getting a ridiculous deal in their home city. Best, Don Bauder

May 26, 2011

OK, there was no more room to do reply posts.

The sony jumbo tron screen comment was over the top sarcasm, but pointed out high tech, high cost items that are not truly part of the live game experience, and not needed.

May 26, 2011

Got it.

Jerry's World was an overload, no doubt.

It would be the equivalent of going to the auto dealer for a brand that has a manufacturer's suggested price of 50 and walking out of the dealeship having paid 100 just because...

May 26, 2011

surfpuppy619, not saying cowboys Stadium isn't over the top. It is. We've been there a hand full of time and it's a great experience. Our friends have a suite and it's over the top, first class all the way. But I'll also say I have enjoyed foot ball just as much watching UCLA in the Rose Bowl or the 49er's at the Stick. FYi, about 75% of the new NFL stadiums bult since 1995 have cost less than $500 million and half of those have cost less than $300 million.

May 26, 2011

Of course the high tech is not needed.. But if the damned fool voters will pay for it... Best, Don Bauder

May 26, 2011

"The very idea that the Chargers can dictate terms here is beyond laughable. It's absurd to even talk about it. The only entity capable of laying down terms is the city. Anyone who tells you otherwise is perhaps not a good practitioner of the negotiation process." As evidenced by the past deals both the Chargers and Padres have gotten, obviously the city of San Diego doesn't dictate the terms That's also clearly evident by the cities financial condition.

May 26, 2011

That's why we will draw the line and start a new page.

If you think about it the Chargers have no real leverage here . What are they gonna do if a new stadium is not provided? Hold their breath?

To say that they can go elsewhere is fallacy Grande. They can't for a number of reasons.

So, that's it. The City has the upper hand here. Whether the city realizes such it's another story.

May 26, 2011

Your committing one fallacy in your calculations. That's the rent the Chargers would pay if they moved. The ONLY scenario in which the Chargers move, in most peoples opinions, is with a change in ownership, whether it be minority or or majority. If it is to Ed Roski's proposed stadium, he is on record stating he wants a majority, if not complete ownership. The figure I have read should it be the AEG downtown L.A. stadium is something around 35% on the outset with an option for majority ownership at a later date. If the Chargers end up In either stadium up here, the same entity will own both the team and the stadium, as both have said they will not use public funds for the stadium. That being the case, their would be no rent payment. That relieves, at least according to your figures, a minimum of $10 million from operating expenses. Probably just enough to cover the interest on the note to build the stadium As I said, feel free to have your opinions. IF a stadium every gets built in L.A., and I have my doubts on that, then we'll know who is correct. Have a happy Memorial Day Weekend, if that's a particular holiday that you personally celebrate.

May 26, 2011

AEG says there will be no use of public funds. That is a blatant lie. I recently had an item on that: there are millions in public funds that would be used for that downtown stadium, greatly in bond financing. Best, Don Bauder

May 26, 2011

Are you referring to the retirement of previous bond issues for the LA convention center or for infrastructure improvements?

May 26, 2011

To say the City has the upper hand is absurd. The mayor has already capitulated to the Chargers, as he does to all downtown real estate interests that line his pockets. Best, Don Bauder

May 26, 2011

It's clear you don't understand San Diego. The downtown real estate establishment dictates terms to the City all the time -- not just on sports stadiums and accoutrement. Best, Don Bauder

May 26, 2011

Don:

Perhaps. Eventhough what you say is the accepted wisdom, therefore you are not telling me something I haven't heard before or I don't know.

Same all same all, the politicos are corrupt and the developers are running City Hall. Old story really.

Let me repeat it lest it helps you to understand. No one in LA wants the Chargers and the team owner can not move to LA because to put it simply the decision is not his to make.

As for the scenario you heard about selling 33% or so of the team, this is the share of the old man -who is close to his expiration date - and wanting to avoid the Obama capital gains tax thought to end last year. So he had Goldman Sachs talk to a few people, among them AEW's Philip but nothing came of it because Obama extended the favorable capital gains treatment. Are you crazy? That of all people the old man will give up his share of the team as an exchange for his son of lesser competence to move the team to LA and to his eventual extinction? Not in a billion years.

May 26, 2011

The old man is not only close to his expiration date, he has lost the shingles off his roof, by the admission of his family. Alex won't be negotiating anything in this. His offspring will. Bottom line: the Chargers covet LA, along with several other teams. The Chargers want to set up two deals: 1. LA. 2. San Diego -- another fleece job. Best, Don Bauder

May 27, 2011

Don Bauder, correct me if I'm wrong on this, but don't each of Alex Spanos' kids each own a 15% stake in the team? I haven't read anything that Spanos senior has transferred his share to the kids yet, given his condition. NFL by-laws require that one person must own 30 percent of an NFL team to control it so if Alex Spanos still owns his 36%, he controls the team. That is unless his kids all act in concert, or decide to sell all or part of their shares to a single individual this giving them controlling interest. In other words, as you said, the family will do the negotiating and as a group they have the power to make the decisions. Also, I have always been under the impression that Alex was not concerned about cap gains tax as much as estate taxes.The estate tax stays the same this year and next at 35%, but in 2013 it goes up to 55%. I wonder what your thoughts are on this.

May 27, 2011

There you go again. An accountant's mentality with estate tax trivia.

Who gives a rat's a$$ what the internal distribution of ownership % is?

You are the one who put forward the feeble idea that in order to get the Chargers to LA instead of rent there will be some sort of barter ownership %.

Are you mad or a complete amateur?

You think that in an effort for Spanos to "Break Free" from SD (The equivalent of a Free Willy a la Chargers) that the leftover Spanoses will be able to agree on a fair price for the team and thus efficiently transfer shares to AEG or Roski in lieu of?

BTW, don't you understand in the simplest possible terms that without getting a hefty rent for a new football(or other sport) stadium the stadium developer can not get financing to build it?

May 27, 2011

Perhaps you can tell me how much rent the Dallas Cowboys pay to play in Cowboys Stadium, or how much rent Jets and Giants pay to play in the new Meadowlands Stadium? BTW, IF the Chargers move to L.A.(and as I have said, I have my doubts that a stadium will ever get built), it WILL involve a change in ownership. Be it downtown or in Industry, be it the Chargers or any other team(s), both entities will only go forward with at least partial ownership of the team and with an agreement for eventual majority ownership.

May 27, 2011

oh! so now you want teams who own a stadium to pay rent to themselves so that bookeeper Johnston can relax?

You continue to provide punctuated nonsense.

I am fairly certain from your replies that you have very little understanding of the business world.

So here is your bright idea. There are two potential sites in LA each costing about $1 Billion to construct/develop. So, in your land of fairy tales you can approach either of them, offer 36% of the Chargers or whereabouts which is worth give or take $300 Mil.

At that point, according to the Gospel By Johnston, the owners of both stadia will be so overjoyed that they will proceed immediatelly to put $1 Billion out of their own pockets to build a stadium.

BTW, is this a deal that you will ever make yourself? If I give you $1 will you give me $4 back?

This is absurd.

May 27, 2011

Ownership of an NFL franchise is a license to steal -- the profits are enormous. That's one reason why Roski and Anschutz will each want a piece of the equity. Best, Don Bauder

May 27, 2011

I agree that it's highly likely that both Roski and AEG will want an equity stake in the Chargers if the team moves to LA. Best, Don Bauder

May 27, 2011

As I recall, Roski has said he will want a significant piece of any team moving to LA. There have been rumors that Anschutz will want a piece of a team, too, but I can't remember his confirming that. Best, Don Bauder

May 27, 2011

I once knew, but have forgotten, how big a share each of Alex's offspring owns. There is little question that high-powered lawyers will do the negotiating with input from the offspring. As to the tax matter, I would assume that the lawyers on the Spanos estate know what they are doing and will take it into account in any negotiations. Best, Don Bauder

May 27, 2011

Don Bauder, I believe I read it in an LAT article right around Christmas. It was his 36%, the kids 15% each and the other 4% split between 2 other minority partners. I knew their names at one time, but have forgotten them. I do remember that the article specifically said the sale of any portion of papa's share was going to be for estate planning. Perhaps you can refresh my memory on another item. Isn't there a specific time frame every year that the Chargers have to get out of their lease? As I remember, literally all they (or someone else,new owners perhaps?)have to do is write a check? And the amount goes down each year if I remember correctly. Putting ownership and league approval issues aside, isn't it literally that easy for them to get out of their lease, simply give the proper notice during the proper time frame and write a check for the proper amount?

May 27, 2011

You are entitled to make up your own mind of course, but not your own facts. It's not my plan, it's just what has been published. I have neither read nor heard comments from either AEG or Majestic which involve anything other than at least partial ownership of the team that plays in the stadiums they want to build, and Ed Roski has gone as far as to say he wants majority ownership. In fact, both entities have said they will not build until they have secured their teams. BTW, I am still waiting for you to tell me how much rent the Cowboys/Giants/Jets pay under the terms of their respective leases, because they do both indeed pay rent.

May 27, 2011

You should be able to find out easily how much rent the Cowboys, Giants and Jets pay. I don't remember Roski saying he wanted majority ownership of a team, but he certainly may have said it. Best, Don Bauder

May 27, 2011

Actually, a copy of the entire lease agreement between the Cowboys and Arlington is readily available, complete with notarized signatures. Roski has been very specific about his ownership requirements. For example, he was quoted in an article in SI as saying that he "won't put a shovel into the soil until he is a full or majority owner of a team." That quote was widely circulated.

May 27, 2011

Re Roski: I bow to your expertise. He wants control of a team. Best, Don Bauder

May 28, 2011

Actually, let me correct my self. Tim Leiweke of AEG did say a couple of months ago that AEG doesn't need to own an NFL team to start construction on the downtown stadium but aren't averse to an ownership role in whatever team moves to L.A. and AEG would consider partnering with Magic Johnson Casey Wasserman as local owners of an NFL team in L.A.

May 27, 2011

If AEG is iffy on owning a team while Roski insists on more than 50%, that could be a suggestion that the Chargers are in the running for the downtown LA stadium, if it ever gets out of the ground. Best, Don Bauder

May 28, 2011

You really need to stop and take a breath here because you are mixing apples and oranges with abandon.

  1. The minority owner is a certain George Pernicano with 3% share.

  2. Anschutz Entertainment Group (AEG) owns the Los Angeles Galaxy, Houston Dynamo (50%), Los Angeles Kings, Ontario Reign, Manchester Monarchs, Eisbären Berlin with Berlin O2 World Ice-Arena,, Hamburg Freezers, 49% of Hammarby IF Fotboll, as well as interests in the Los Angeles Lakers, Los Angeles Sparks, Hartford Colonials and Reading Royals. The company also purchased the Champions on Ice figure skating tour in 2006, and own 12 % of Djurgårdens IF Hockey. The company makes a significant amount of its money by leveraging its sports interests, already significant earners, by using the stadia in which these teams play to host various other entertainment events, most notably concerts. Indeed, Philip Anschutz created the company by buying up several small local promoters in Los Angeles including ConcertsWest and Goldenvoice, promoter of the annual Coachella Valley Music and Arts Festival in order to fill up the schedule for his new sports venue, Staples Center. It is now the second-largest event promoter in the United States.

  3. The world highest value sports franchise, Manchester United, plays in a stadium that was built in 1909 (more than 100 years old) and I think for approx. 90,000 pounds. It also has a manager that has been in the same position for the last 25 years. There is no nexus between the quality of a team and the age of a stadium. A mediocre team put in a brand new stadium will still be mediocre.

Here is my suggestion:

Watch the Barcelona vs. Manchester United game at Wembley on Saturday to see what it means to mix World Top 10 clubs with a fantastic/legendary sports venue.

None of that can ever happen in San Diego. In London, home of the legendary Wembley there are at least 20 excellent football clubs within a radius of a few miles.

Tip: Barcelona wins.

May 27, 2011

Percano is one of a group of SD locals who were involved in the purchase of the Chargers with Baron Hilton. I am pretty certain the is still 1 more of those guys around, I just can't remember who. Perhaps I'm incorrect, but it doesn't really matter, does it; just a minor detail of no significance.

It's nice that you can use google to look up info on AEG, something that my 6 yr old niece in San Diego can do. At least you didn't just do a cut and paste from their website. I'll give you credit for that.

You forgot to mention the fact that the 100+ yr old stadium ManU plays in, Old Trafford, has had what, about $50-$100 million in upgrades end expansions in the past 20 yrs. In fact, aren't plans afoot to further expand the stadium so that it is bigger than Wemlbey. I think it's great that good, old stadiums get upgrades and remain in use. I have never seen a game at Wrigley Field, but would love to. And I love watching football at the Rose Bowl. We've been going for along time and as I said earlier, we enjoy it there every bit as much as we did at Cowboys Stadium, even more so in some ways.

I have already said that I am really only a fan of soccer during WC and the Olympics, so I have no plans to watch. That "fantastic/legendary sports venue" you refer to, that would be the New Wembley Stadium, correct? You know, the one built on the site of the Old Wembley, and opened about 4 yrs ago, at a cost of only $1.57 billion? Yeah, been there, done that. The NFL has played there a couple of times. Both sellouts as I recall. Seems those Brits are willing to shell out the big bucks to watch a bunch of yanks play a bastardized version of rugby. And since soccer has been around almost 3000 years, and football maybe 300 yrs, that's hardly a fair comparison. Given that the that the first settlement in what is now London was almost 2000 yrs ago, it's not hard for one to imagine that some cultural and social activities in London are older and more popular than not just SD, but the whole country. My ancestors were farming in Ireland before North America was even "discovered", so what's your point?

BTW, have you used you google skills to find those rent figures yet?

May 27, 2011

johnston:

Of course old stadia get upgrades. The same way the Q will get an upgrade for $100 Mil. and the Chargers will play there for the next 50 years.

The point on AEG is that they are promoters, just like Jerry Jones' skill set. And yes they prefer to own a piece of the team but they certainly will not be willing to pay the ridiculous price that the Spanos leftovers will probably ask. So erase that possibility from your mind. You have neither a willing seller nor a willing buyer here.

The new Wembley is also over the top but it serves other functions. It will be there for the next 100 years and beyond.

And no, European football has not existed for 3000 years. 3,000 years ago was about when me and my 11 other Olympian Gods and Goddesses were beginning to have some fun. I can assure you fun then was nothing similar to football.

And, us, the Yanks have not been playing football for 300 years. Exchanging nonsense like the type you serve) for 300 years, yes. Football, no.

May 27, 2011

Obviuosly, you didn't bother to read my 7:07 pm comment. Some origins of soccer have been traced back to 1000 B.C. in japan. Do the math. I didn't say American football originated 300 yrs ago, I said football. The origins of American football come from rugby. An early form of Rugby was being played at least as far back as the late 1700's in an English boarding school named, oddly enough, The Rugby School. Again do the math.

May 27, 2011

So now European football has first appeared at the foothills of Mt. Fuji?

Is this why our Japanese friends are good at it?

Or was it the ancient Maya that played some sort of football and if they failed to pass the ball through a round hole were sacrificed?

Come to think of it, a public sacrifice for the local football owners will be a nice event for the Q. We may even reach record capacity.

May 27, 2011

Before too long, the NFL will have defensive linemen weighting 90,000 pounds. Best, Don Bauder

May 28, 2011

Johnston:

Tampa Bay pays $8.1 Mil annual rent. A state of the art new stadium would command $10-12 Mil. of annual rent.

Stop looking at Texas, the City of Arlington or any of the Cowboys madness as a guide to the LA situation. Whatever Texas did is hardly a guide for a market driven, arms-length transaction.

It is abundantly clear that no city will own any part of the two LA stadia. Both LA venues are 100% private and have 0% of public contribution(as of yet).

Currently the local team here pays $700,000 annual rent which is equal to theft.

Go to the city of San Diego website and you will see many reports related to rent analysis and other stadium related issues.

May 27, 2011

"A state of the art new stadium would command $10-12 Mil. of annual rent" Yet that's not what either The Cowboys nor the Giant's/Jets pay. And in fact Tim Leiweke of AEG has said they are in fact using what Jerry Jones did as a model in their development. I can't quite figure out how it is that you think anything to do with an NFL stadium that cost $168 million and opened in 1998 is more relevant than 2 stadiums opened in the last 2 years.
And BTW, according to Forbes, Tampa Bay pays less than $4 million a year in rent. Could it be that you keep using Tampa Bay is because owner, Malcolm Glazer, also owns Manchester United? Nah, just coincidence I'm sure.

May 27, 2011

In case you didn't notice we had a tectonic shift in 2008 in the world markets.

The times of getting financing because you could fog a mirror are over.

This is like being in the 30s having fond memories of the 20s.

These times are gone and are gone forever.

There is a whole new world out there and does not have stadia finacing in it.

Just forget about it.

May 28, 2011

The downtown LA stadium/convention center proposal requires a huge taxpayer subsidy. AEG keeps saying it will be privately-financed, but that's nonsense. I've posted a couple of analyses on how much the project will cost LA taxpayers. Best, Don Bauder

May 28, 2011

I agree.

One can say 100% private all day long, when in reality some form of overt or covert subsidy will occur.

Nevertheless, this is LA and the scrutiny of public deals is at a much higher level.

In the Stables arena case the public and Majestic went back and forth for many rounds. After an exhausting process which lasted for years the City Council voted for a small(relatively) subsidy of approx. $70 Mil. which for the LA scene is spending money.

May 28, 2011

Johnston:

To understand what a bad example is the City of Arlington situation consider this. The stadium cost $1.3 Billion or whereabouts.

The rent received by the city is $2 Mil + 5% of naming rights revenue, let's make it a fat $2.5 Mil. per year.

The formula is V= R/i

V = value, in this case 1.3 Bil. R = annual revenue i = interest

so if we take $2.5 Mil divided by , say, 5% interest the value created is:

2,500,000 / 0.05 = $50,000,000.

This is a far cry from $1.3 bil. that needs to be covered for debt service.

The annual revenue needed(in this case) would be:

1,300,000,000X0.05 = $65,000,000

Feel free to play with any assumption numbers you like but the gap is huge.

No Wall Street firm will put up the dough unless they see a significant annual revenue from the stadium.

May 27, 2011

Actually, there are no naming right fees being paid because Jerry Jones decided to keep the name as Dallas Couwboys Stadium. The problem with your figures is that the NFL put up $150 million and Arlington $325 million. And despite your "theory" that no one would lend it, Jerry Jones financed the other $825 million. I am not saying it will get done in this business climate, I have said I have my doubts that a stadium will ever be built, but apparently you have ignored that. But it had been done. Jerry Jones did it and so did the Giants/Jets at the New Meadowlands. Dispute it all you want but the stadiums are there.

May 27, 2011

I don't dispute your breakdown. It is obvious that Jerry had to get creative and pass around the donation hat.

But how did he finance $825 Mil.?

Actually if you want to get an idea of how these deals get done Google "Raiders Stadium Financing" and you will see a pdf of a few pages by Goldman Sachs explaining in detail of how they financed similar venues (baseball, fooball, ice hockey...you name it).

It a very complex process and as an owner you have to pledge everything to get it done (ticket revenue, TV revenue, merchandise, other event revenue).

It has nothing to do with the economy. It has to do with the fact that with an average franchise valuation of $1 Bil., a new stadium construction would exceed the team value.

Anyway, I have no idea why we are discussing new stadium financing here. This is San Diego. It will never happen here. The numbers are nowhere near and on top of that the "bright team owners" want a stadium of only 55,000 seats which will make the per seat cost skyrocket.

No, never. The only thing you can hope here is a redo of the Q. The idea that the Chargers will otherwise move is beyond laughable.

May 27, 2011

Zeus, we can only hope that you are right. If the local "fortspans" lose their team, their lives will be forever diminished. They'll live out their days in shades of gray instead of in full color. A low cost Q redo, especially if the work is financed as Don suggested above, can make that facility last another fifty or sixty years. And it is still centrally located with plenty of space for parking expansion, if that should be deemed necessary.

If you are right, Sanders and cabal know it. That means they know it ain't gonna happen. So why keep up the talk? Well, if you don't keep it going, the Chargers can crank up the propaganda mill and that will keep the fans hammering the pols to "do whatever it takes" to keep the Chargers. Talk from the porky mayor is simpler than trying to reason with the fans and other voters who think it is all so simple.

May 28, 2011

You may be making the porky mayor out to be more clever than he actually is. Best, Don Bauder

May 28, 2011

Visduh:

All I am saying is look at the facts.

The owner has check mated himself. He has looked at every other possible location and has self-rejected all possible options.

The only locations left are the Q and downtown. Downtown (for the reasons discussed) is a pie in the sky, chasing rainbow sort of thing. It's not happening.

So the only option remaining is the Q. So the Q it is. Let's get the best sports architect and start talking shop.

The rest is a giant waste of time.

May 28, 2011

When did Jones line up his financing? Was it before the crash? Best, Don Bauder

May 28, 2011

Before the crash.

In fact the deal was pre-2006, before the new NFL labor contract made financing impossible.

May 28, 2011

Since your now also an expert on NFL CBA negotiations, perhaps you would like to explain to us all exactly how the CBA extension signed in March of 2006 has made financing impossible.

May 28, 2011

Can you point to any deal made post 2006?

Not proposals. Actual stadium deals with PUBLIC financing in place?

This ought to self-answer your question.

May 28, 2011

The question wasn't how many deals have been made, the question was what specifically was in the CBA extension that made financing impossible. It's a simple, specific question. Can you provide a specific answer or can you just offer rhetoric as a deflection away from the question posed. And by the way your comment said financing, not public financing; there you go again trying to evade when you can't give an answer. Still waiting for you explanation of why you keep quoting Tampa Bays rent at twice what it is. You are also missing several team from your list. There have been 14 team open new stadiums since 1999 and 7 more in the 4 years prior to that. I also wonder about something else you said. We've suffered a "tectonic shift in 2008 in the world markets" and "stagflation will be with us for at least two decades", yet it has nothing to do with the economy? I'm not quite sure how to reason that one out. For some reason you seem to be under the impression that you can just throw out statements and figures and noone will notice when you can't gice any actual facts to back them up. Whatever, that's fine. A lot of that goes on here. For some reason you keep missing the point that, as I have said a couple of times, I'm not disagreeing with you that a new stadium won't get built, either public or private,either in L.A. or San Diego, though I could care less about a stadium in SD. What I am disagreeing with you on is whether or not the Chargers can leave given the right opportunity. Not whether they will or not, but if they can. Most everyone thinks they can, and you say they can't because only the city of SD can make that decision. Believe what you want, really doesn't matter. Hope you enjoyed your soccer match. You were correct, Barcelona won.

May 28, 2011

Johnston:

I fully understand your frustration with me.

Part of it is deliberate on my part.

Since you called me a troll, I have decided to teach you a lesson. Don't expect from me any gentle conduct when I am waging war.

The only message that I have for you is that you should never engage someone you don't know because there might very well be a Champion:

http://www.youtube.com/watch?v=_FF22cBZJsU

I know how to pick a winning team.

May 28, 2011

The question is not so much whether stadiums will be financed in this climate. A bigger question is how long this financial climate will last. It's looking worse and worse every day; we may not have a double-dip, but anemic housing is leading the economy down again. Best, Don Bauder

May 28, 2011

Don:

Stagflation will be with us for at least two decades.

Japan is already in the 3rd lost decade.

May 28, 2011

The proposed Chargers stadium is on a postage stamp-sized plot. There will be no room for Texas-sized egos. Best, Don Bauder

May 28, 2011

Which makes the per seat cost skyrocket. Can you imagine the owner asking the public to finance part of a $23,000+ per seat stadium, while the wild west version of Jerry Jones is at $16,000+?

This is unheard of; completely absurd.

May 28, 2011

Anything can happen in San Diego sports scams -- and has. Best, Don Bauder

May 29, 2011

Johnston:

Since you like trivia:

Here's a rundown of how recent NFL stadiums were financed:

Cleveland Browns (1999) Stadium cost: $290 million Percentage of public funding: 74.7% Cleveland recently refinanced $132 million in bonds. The city owns the stadium and leases it to the Browns for $250,000. The public financing was conducted through the sale of bonds.

Pittsburgh Steelers (2001) Stadium cost: $357.5 million Percentage of public funding:78.7% The stadium was funded as part of a package that also provided new facilities for the city's hockey and baseball teams. A county hotel tax contributes about 10% of the annual financing cost of construction bonds. A 5% surcharge was added to tickets, a 1% wage tax was levied on players who don't live in the city, the state provided matching funds.

Denver Broncos (2001) Cost: $365 million Percentage of public financing : 68.4% A six-county sales tax of .1% that was used to build the baseball stadium for the Colorado Rockies was increased after the measure was approved by voters. Percentage of pubic finacing: 72%

(continued below).....

May 28, 2011

Johnston:

Here we go...trivia continued:

Here's a rundown of how recent NFL stadiums were financed:

Houston Texans (2002) Cost: $424 million Percentage of public financing: 73% The Houston City Council waived taxes on the stadium as part of a financing plan. Hotel occupancy and car rental taxes were earmarked for use by the sports authority, which also agreed to provide loans (at future taxpayer expense) to the team. A ticket tax (10%, not to exceed $2) and parking tax was also imposed.

Philadelphia Eagles (2003) Cost: $474 million Percentage of public financing: 40% The stadium is owned by the city.

Arizona Cardinals (2007) Cost: $455 million Percentage of public financing: 67.7% $298.5 million of the tab is provided by the Arizona Tourism and Sports Authority, s from taxes on hotel beds and rental cars. Each ticket has a $4.25 surcharge. The city of Glendale provided $9.5 million.

Indianapolis Colts Cost: $720 million Percentage of public financing: 86% Marion County hotel tax increases to 9 percent from 6 percent. This is on top of the 6 percent state sales tax. Marion County car rental tax doubled to 4 percent. The county doubled its food and beverage tax, to 2 percent. Neighboring suburban counties implemented 1 percent restaurant taxes. A surcharge on tickets was increased by 1 percent.

Dallas Cowboys (2009) Stadium cost: $1.2 billion Percentage of public financing: 28.6% The city of Arlington's sales tax was raised by a half-cent, the hotel occupancy tax was raised by 2 percent and a car rental tax was increased by 5 percent. The NFL contributed $150 million towards the stadium.

New York Jets/New York Giants (2010) Stadium cost: $1.6 billion Percentage of public financing: 0% $300 million was provided by the NFL, under a program the league had to help teams build stadiums. The program no longer exists. The stadium will make the two franchises the most lucrative in football. Although public money was not specifically used, the New Jersey Sports and Exposition Authority is stuck with $100 million in debt on the old stadium. The stadium is built on public land.

May 28, 2011

The NFL's program to help teams build stadiums may not be officially defunct, but it has no money now. Notice how often the public's percentage of financing is above 60%. Best, Don Bauder

May 29, 2011

Don:

The operative word is "it used to be" above 60%. And in the 60s we had mini-skirts.

However, this is not fashion we are talking about. New stadia now days cost upwards of $1 Bil. This is a clear DOA signal, not to mention that the owner is playing an old-fashioned game here that is long dead.

Depending on how the NFL labor lockout gets resolved, we may never see public financing again. And I mean NEVER (like in never, ever never again).

Believe you me that of all the issues the NFL has in its plate right at the moment, building new stadia is not a priority.

May 29, 2011

BTW, Johnston:

Let me summarize the lessons of the above two postings(we wouldn't want your bias to lead you off left field) .

  1. The right time to have built a stadium was pre-2006 when stadia were below $500 Mil a piece with plenty of public financing available.

  2. As the last decade wore off, two significant trends started:

a. Stadium costs zoomed into the $1 Bil + category b. Public financing went from 70% whereabouts to nothing (0%).

As you can see whether you have realized it or not, there has been a game changer in the new stadium business. This fact coupled with the tectonic shift in the global capital markets has created a prohibitive dynamic for any new stadium construction.

Regarding our lovely town San Diego it appears:

  1. the team owner is reactive, not pro-active.
  2. he is also a Johnny come lately, roughly about five years behind schedule. (what he is proposing today used to be fashionable in the earlier century).
  3. The prevailing trend now is zero percent public financing, therefore, the team owner is wasting both his and the city's time.
May 28, 2011

You haven't even mentioned that the City of San Diego is dead broke. Best, Don Bauder

May 29, 2011

Details!

May 29, 2011

BTW, Don.

The reason I don't even want to go into the topic of the City's finances is because this is how the new stadium crowd is going to frame it.

After it is clear that they are not gonna get the public money, they will come out and say "oh, the city is broke" or "the city was weak and could not get its act together" or "it was the City's fault".

That is why I would like to keep the focus away from the city and look at the bigger picture and the national trends. Not to say that we are obligated to follow national trends - because after all we are Califonia and therefore the trend setter state - but if one sees the writing on the wall elsewhere one already can deduce that such proposals would be dead in California (a non starter).

NFL national trends say that there is zero public money for the owner. So, what we have here in SD is an owner that is behind times and he is waging an old fashioned, antiquated campaign for something that does not even exist. The owner wants us to believe that a behavior associated with the bubble economy of the last decade is now the "norm" and therefore he has the "right to claim it". Not so, say the facts. This was an abnormal trend that as soon as stadia escalated beyond $1 Bil. it has vanished in thin air.

May 29, 2011

I agree that the Spanos family is living in the past -- thinking it can extort a stadium worth up to $1 billion using the same strategy and threats that used to work in halcyon days. However, San Diegans may cave. The Chargers have the mainstream media in their pockets. Best, Don Bauder

May 29, 2011

However, San Diegans may cave.

No, we won't cave, not this time.

But that point is moot, there is NO financing for a billion football stadium, capital markets just not there and won't be there for at least 5 more years minimum.

Not happening even IF the stars were aligned, which they are not.

May 29, 2011

Agreed!

May 30, 2011

I have been saying the City should go into bankruptcy since 2003. You can find columns and comments on our website. Best, Don Bauder

May 29, 2011

All cities, counties and states are on the same boat.

In fact, if we don't find ways to finance state and local government debt we will have Chapter 2 of this financial crisis.

I am not saying that it would produce a de facto crisis. I am saying that it is staring us in the face and we got to deal with it.

And that is why new stadium public financing is way off the mark.

It's the equivalent of going into the operating room for life threatening surgery and worring how your make up looks on your face.

It's way off.

May 30, 2011

Yes sir, I hope you are 100% right -- that new taxpayer-financed sports palaces are in the past. Billionaire team owners should pay for their own stadia. I have been on this crusade sine 1996. Best, Don Bauder

May 30, 2011

We are on the same page. The only slight difference is "the LA move" option. I think such option does not exist.

May 30, 2011

I think the LA option is real -- not only for San Diego, but for other locations such as Minnesota, Jacksonville, St. Louis, possibly Buffalo. However, I don't know that a stadium will ever be built there. Best, Don Bauder

May 30, 2011

Don:

Since you are the practioner of the "pen is mightier than the sword" craft and by all accounts a very bright and witty reporter, why don't you research the topic of the LA NFL market.

I think it would be extremely valuable to the citizens of San Diego.

You don't even have to bring the Chargers into it, simply try to reason out - based on (yours and other people's)research - the following points:

  1. Is the LA NFL market more valuable to the NFL without the presence of an NFL team there?
  2. What are the private workings of the 32 owner-NFL Vatican in deciding market share?
  3. Are underperforming NFL teams favored in a potential new market entry?
  4. Is the present make-up of 32 teams the ideal NFL set-up in terms of divisional balance?
  5. If both proposals for new NFL stadia in LA (on paper of course) have no public financing component, how does one secure financing for building a new NFL stadium venue?
May 31, 2011

I'll address only one of your perceptive questions: I can't believe the NFL believes the LA market is more valuable to the league without a team there. There is simply too much money that accrues to owners and the league with a team in the second largest U.S. market. Best, Don Bauder

June 1, 2011

Here is an excerpt from an ESPN aticle on this matter:

"But to understand just how valuable Los Angeles has been to Tha League as an open market, you have to be willing to survey the imposing number of implied or overt threats that involved L.A. as a likely destination these past 16 years. (That is, ever since the Rams and Raiders high-tailed it to their current states of dissatisfaction, St. Louis and Oakland, respectively.)

Minnesota? Check and double-check. San Diego? Don't get me started. Jacksonville and Buffalo, one supposes, are almost always feeling a Pacific breeze (although you'd have to pry the Bills out of the frozen hands of their ardent fans). The Rams are lately said to be potential candidates for a moving party, which has to strike somebody somewhere as the sort of turnabout an L.A. fan could at least appreciate.

And way back in 2004, it was good old Indianapolis that was put through the wringer, as Colts bigwig Jim Irsay publicly fretted over the city's corporate base and wondered whether even a new stadium -- shiny, preferably, and with lots and lots of bells and whistles -- would be enough to make it work in the American heartland. Said Irsay, "How much can you keep putting your own money into your franchise with no hope of seeing things change?"

Irsay spoke, at the time, as a man with ties to the L.A. entertainment industry and a membership at the Riviera Country Club. Four years later, the Colts were moving into brand-new Lucas Oil Stadium in Indy.

Did they ever seriously ponder relocation? It doesn't matter in the slightest. This is the value of having a huge open market like Los Angeles in the mix. Other NFL cities can feel their throats getting chalky every time a stadium situation starts to go south, because in the backs of their minds they can also see things going west.

Could the Jaguars be leaving on a jet plane? Unhappy franchises have used Los Angeles as a constant threat to their current cities.

Paul Tagliabue, the former commissioner, never seemed in a terrible hurry to fill the L.A. market. His successor, Roger Goodell, has other things on his plate at the moment, so you can excuse him for not moving the L.A. issue to the top of the heap. Without a collective bargaining agreement, rating the prospects for a new stadium in a city that doesn't even have a team seems faintly ludicrous (and then, as you get closer, totally ludicrous)."

June 2, 2011

Dude, I thought you got the boot a couple of weeks ago. Glad to see it ain't so. KUTGW.

June 2, 2011

Thanks.

June 2, 2011
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