If you were wondering where an NFL team in Los Angeles would play while waiting to move into the new downtown stadium that really doesn’t look like it’s going to get built anytime soon, Pasadena has you covered: The Pasadena city council voted yesterday to allow the Rose Bowl to host an additional 13 games a year if a deal is struck to have an NFL team lodge there temporarily while waiting for a new stadium.
They did so despite more than 100 local residents packing the hearing to complain about the likely traffic and noise impacts, because councilmembers were just so thrilled by the prospect of hosting an NFL team:
“I’m not excited about the NFL, and clearly [the Rose Bowl's neighbors] are not excited, but it’s the responsible thing to do,” Councilwoman Margaret McAustin said.
Okay, actually they were excited at the prospect of an NFL team maybe paying $5-10 million a year in rent, which would help pay off the $195 million in renovation costs Pasadena is looking at for the Rose Bowl. Though given that the city would also need to add extra police on game days, and might need to spend more on amenities to make the Rose Bowl NFL-acceptable, and there’s no guarantee that a team would agree to pay $5-10 million in rent in the first place … well, all that can be worked out if a team decides to move to L.A. and needs a temporary home and decides to negotiate a short-term lease with Pasadena. All the city has done at this point is metaphorically hung out a “Have stadium, will rent to NFL for food” sign — which was instantly metaphorically defaced by local residents. And a Happy Thanksgiving was had by all…
No news, sort of…
Just a quick question though, Neil: Assuming a team is found willing and able to relocate to LA next year, or two/three years from now, do you believe that the NFL would approve a temp move to the Rose Bowl (or coliseum, not that that’s particularly likely) if the agreement on Anschutz’ stadium isn’t complete and shovels aren’t in the ground?
Seems like energy is building toward putting somebody in LA, but is it enough to make the NFL risk dropping a team into the Rose Bowl for longer than 2-3 years? Is it enough to push the league to allow a relocation over expansion possibilities?
I’ve been of the opinion for quite a while that LA (NFL) and Seattle (NBA) will be markets filled via expansion rather than relocation, mostly because I can’t imagine the other owners (particularly in the NFL’s case) wanting to effectively award that market to an existing partner when it could be sold and everyone benefit. Even if the Spanos family agree to pay a hefty relocation fee, for example, it won’t come anywhere close to the (what, $1.2 to 1.5Bn?) expansion fee an LA team is likely to generate.
No, I don’t think any team moves to L.A. unless a new stadium deal is complete. But if it does, the Rose Bowl could be a temporary home rather than have a team remain lame-duck in its old city for a season or two.
On relocation vs. expansion, don’t forget that relocation has one big advantage to the other existing teams: It means they don’t need to share the national TV revenue with anyone new. Add in that as currently proposed, any team moving to L.A. is going to have to put up a lot of money for a stadium, and that presence in a big market isn’t as much of an advantage in football as in some other sports, and I’m not as sure that the other team owners would think that L.A. is such a prize.
That’s definitely true, Neil. But from where I sit, the last few expansion owners have effectively purchased the (then current) revenue stream at or near FMV. I can’t recall what the share of national tv revenue was when Bob McNair paid $700m for the expansion team that would have gone to LA (had they been able to resolve their stadium and other bickering), but it seemed to me that he was making a reasonable to good investment just by purchasing the tv income stream for that price.
Of course, the more teams there are the less each of the 32 owners gets as a share of the expansion money… but on the other hand, it also cuts the tv revenue split for each owner in future as well. Many hands make light work etc.
Given that TV revenue has tended to grow beyond all rational expectation, it could be that $40m per owner (as a rough figure) for adding a team right now (and cutting each existing owner’s national revenue share by $3m or so) seems like a good long term deal for the purchaser. But will TV revenues continue to grow indefinitely? Would present ownership prefer the “bird in hand” of a $1bn+ expansion fee over the promise of potential future increases in their tv revenue share?
History has tended to show that those making decisions based on tv revenues do better (especially the Silnas of the ABA…), but from my POV the owners can win both ends of that one… take the expansion money today, and when the TV revenues grow (as they tend to do when a league expands successfully) you earn a slightly smaller percentage of a much greater whole.
At some point the market for your product may be tapped, and thus additional expansion just redirects existing support to another team (or franchise outlet, if you prefer). Some leagues are likely at the point (the NHL, definitely), but I don’t believe the NFL is there yet.
“when the TV revenues grow (as they tend to do when a league expands successfully)”
Do you really think that NFL TV revenues are going to grow significantly if they put a team in L.A.? All the evidence I’ve seen is that people in L.A. still watch football, they just watch whatever teams are playing in the national games.
I was actually speaking more generally (about expansion and “additional tv markets”) and not just about LA. Broadly speaking, a 36 team NFL (for example) would generate more revenue of all kinds, including tv revenue.
I could see a modest increase in revenue for the league if they once again had a team in Los Angeles But agree that it wouldn’t necessarily be a significant bump from returning to LA alone. Actual eyeball counts might go down, given that fans in LA can now watch more or less any game they want, which wouldn’t necessarily be the case if they had a home team.
There’s more progress in LA for a stadium than there is in San Diego and the NFL is not expanding.