Downtown L.A. stadium declared officially dead, unofficially

I’m not actually how to read this, as the official NFL position on AEG’s downtown Los Angeles stadium plan has been that they’ve hated it for a year and a half now, but: Yahoo! Sports is reporting that two “sources” (one of them a “league source”) are saying that the AEG plan is dead as far as the league is concerned, as “Unofficially, the NFL believes that the cost of the AEG plan, which the league believes will be at least $1.8 billion, will make it unworkable”:

“The numbers just don’t work, no matter how you look at the deal,” a league source said in February. “It’s either too hard for AEG to make money [and pay the debt on the stadium] or too hard for the team. I just can’t see a way for it to work.”

Again, nothing really new, except that the NFL is now sending off-the-record staffers to leak the word that really, it’s time to move on to other L.A. stadium proposals. Not to mention a decidedly on-the-record Marc Ganis, the NFL consultant who might as well be a league source, who pointedly told Yahoo!: “The focus on the sale of AEG has stalled the chance for people in the area to view potential other sites and opportunities. … If Los Angeles leaders don’t move on to look at other options it will only delay the return of the NFL to Los Angeles further, possibly even years longer.”

This might be a reasonable ploy to get L.A. moving on some other stadium possibilities — or at least vague rumors of possibilities — but it’s terrible timing for the Carolina Panthers, Miami Dolphins, Atlanta Falcons, Buffalo Bills, St. Louis Rams, San Diego Chargers, Oakland Raiders, and any other NFL teams I may have left out that are currently using the “L.A. has a stadium deal ready to go!” threat to try to extract money from their current hometowns for new or renovated stadiums. I was just telling a reporter yesterday that these teams are all scrambling for stadium funds now because they have a limited window to use the L.A. threat before it either falls apart or somebody else moves there first; it looks like that window may have just begun to slide shut.

 


26 comments on “Downtown L.A. stadium declared officially dead, unofficially

  1. It’s the same crap that has been going on for 19 years now. The NFL has always been obsessed with Chavez Ravine (Which I believe is an unlikely location as long as Frank McBroke still owns the parking lots), so that leaves only Grand Crossing as the only shovel ready location. Basically the NFL can’t make enough money off of it, so screw you guys one more. I’m sick of it.

  2. What’s funny (or sad, depending…) about that, Sasha, is that the second I saw the word ‘Stupid’ to start the sentence, my brain automatically switched to Homer Simpson voice in my head.

    I suspect many others did the same as well.

  3. This thing is over. Over, over, over. Put a fork in it.

    And by “it” I mean the whole concept of a new stadium in Los Angeles requiring taxpayer subsidies. I love the way the NFL statement pretty much said “it’s absolutely NECESSARY to bilk public funds for our billionaire owners.”

  4. @ Dan: Frank McBroke still retained some of the land rights (I beleive). But there are stipulations.
    http://www.huffingtonpost.com/2012/04/02/dodgers-parking-lots-frank-mccourt_n_1396973.html

  5. Might be too late to save the people of Atlanta from being bilked by the Falcons. Even with the money from the public for that deal now going over $900 million (http://agraynation.com/2013/02/24/20130221.aspx), the scuttlebutt around town is that all parties involved have made an agreement behind closed doors. It’ll be interesting to see if the people in Atlanta accept it and just go about their business or if there are political consequences.

  6. I didn’t see anything about PSLs. So does anyone know if that’s the case or not? So an average of 5k a seat for 40,000 seats, which is probably conservative on both counts, is some serious money. Not to mention the skyboxes.
    Assuming the Falcons only have to put up 43 million, do the usual terms the NFL dictates still hold?
    1. Parking and concessions
    2. Naming rights

    I believe the NFL will offset some of their costs from the 43 million they have to put up. So this is starting to look like a major cash cow and that’s not even counting the net worth of the franchise and added TV money.
    Can I borrow the NFL negotiators for my next raise and the politicians to negotiate for damagement? I could retire in 3 months!

  7. PSLs are the second item on the chart, $150 million.

    I’m not exactly sure of these numbers — some of it seems to mix present-value and cumulative payments, and I think you can make a case that the PSLs, at least, should be in the “team” pile (since the Falcons could raise ticket prices at least somewhat higher if they didn’t require PSLs). I’ll try to do a deeper analysis of the underlying documents when I have some time to spend with them.

    But even if the final numbers are slightly different, it does make the point nicely that a “mostly privately funded” stadium can still manage to be mostly publicly funded, after you add up all the little dribs and drabs of subsidies.

  8. Clearly the only answer is for the taxpayers of Los Angeles to pay for the entire thing themselves… I mean COME ON People!!!

    How can Goodell threaten to move teams to your city if you won’t play along by kicking in a billion or three? Man…

  9. Public subsidy for the NFL is a joke. These stadiums hold just 8 games a year plus pre season and possible playoff games. Other than that, they may get a college bowl game or HS all star game. The fact that they throw a billion dollars a year towards these stadiums is unreal.

    NFL teams are already valued at an average of a billion per team. The profit margins for these owners far outnumber what owners in the other big 3 sports get so there’s no reason to make even more in a new stadium. 50 year old buildings are allowing teams to make huge profits as it is.

    I have supported indoor arenas provided there is substantial private money. Those buildings have events for all ages, both sexes and all ethnicities ranging from games, to concerts, to conventions and everything else. Not only that but they cost half what the NFL stadiums do.

  10. You know, Neil, I’m pretty sure Goodell (and more importantly the media that do his dirty work for him – often without prompting) will continue to use Los Angeles as the unseen force waiting to swoop up dozens of teams if their present host (in the parasite sense) cities aren’t quick enough on the draw.

    The fact is, there has never been much of a plan to build a new stadium in LA. The closest the city got was probably Al Davis & the Hollywood Park experiment… and we know how that ended.

    I believe the NFL is actually happy about this ‘development’. Aside from the fact that they can’t lose either way (either LA builds them a free stadium or the threat of LA cajoles someone else to do so… meaning they can continue using LA as a threat rather than having to try and sound intimidating when they use the word “Boise” in future), it leaves LA wide open… and they are making significant cash out of LA already through merchandising and direct tv subs. I doubt merchandising would increase that much if Angelinos suddenly had a new team to cheer for… you might get a one year bump while fans jump on the bandwagon, but I don’t see LA’s existing fan base converting en masse to a new team… even if it would be the Chargers or Raiders (who in a merch sense, may never have actually left…)

  11. Yeah, the only downside I see is that it’s going to be somewhat uncomfortable if some mayor somewhere tries to insist that their city’s team will move to L.A. without a new stadium, and a city councilmember replies, “L.A.? You mean that city whose stadium deal the NFL just deep-sixed?”

    Admittedly, this requires believing that there are city councilmembers who actually read and assimilate information from cities other than their own. But it could maybe happen, right?

  12. The problem is AEG and the tie in to the convention center, the location is fine. AEG has wanted an unreasonable cut and that’s what’s killed this plan from the start.

    LA should look into the feasibility of pulling the development rights from AEG and trying to work directly with the league. A new stadium like the 49ers would be fine for 2 teams to share at the farmers location and 2 teams could easily fund that stadium on the farmers site. PSL’s from 2 teams would easily generate at least $400 million, and the Californian step daughter of G4 will be $250 million per team or possibly $300 million per team.

    2 teams could conservatively raise at least $800 million towards construction and likely come close to the $1 billion mark, while keeping luxury suite revenue for the teams.

  13. What bothers me the most is the lack of foresight. They threaten to move teams that either built or renovated their stadiums in the 90s. I can understand talk about the Chargers and Raiders, but if St Louis plays in such an outmoded stadium, why did the league allow them to move there in the first place? How long was the Jones Dome a top-tier stadium. When did it change? From 1995-2000, no one said anything, then the team begins to struggle, less people show up, and suddenly the stadium needs to be replaced. Whatever.

  14. “Outmoded” has a special definition in ownerese, meaning “Somebody else has a newer one.” (See also: “economically obsolete.”)

  15. True, “economic obsolescence” is an issue in business. It is generally used as a driver for the business owner to borrow (or sell shares) to invest capital in his business, not to make outrageous demands for subsidy.

    The case can be made that every stadium is economically obsolescent the day after it is built. Someone, somewhere, will always have the ‘worst’ stadium in the NFL, even if all 31 have been built in the last 2 years. And no matter how “wondrous” a new baseball or football stadium in Pittsburgh or Kansas City is, it won’t be able to generate revenues the way a new (or even old) stadium in New York or Los Angeles can.

    In addition, since so much of the revenue growth in MLB and the NFL has come from tv contracts, even the stadium condition itself is largely irrelevant. The Rangers, Dodgers and Angels aren’t driving free agent prices ever higher because they have new stadia (they don’t). They are doing so because they have new regional TV deals that earn then hundreds of millions a year.
    No matter how many HD screens you install on walkways no-one ever uses, you won’t close that gap if you are the Pirates or Royals.

    In the NFL’s case, tv revenues are largely equalized. Thus stadium revenues are more important than in other leagues. Still, the gameday revenue from any stadium is dependent on two things: the facility’s ability to generate and the fans ability to pay. You can’t turn Kansas City or Oakland into NY through tax subsidies, just like you can’t run an economy by paying people to dig holes and others to fill them (though the US Gov’t is certainly trying… odd that, given it’s history of rubbishing other economies that tried the same thing…)

  16. …. make that obsolete… not obsolescent… damn proof readers!!! (Do I get points for inventing words???)

  17. That was a hard deadline in the arbitration report, I guess it’s not news worthy because there was no way the CVC could agree to the terms in only 30 days.

  18. We will get the rubes and local pols across the nation back in line soon enough. Except in L.A. itself of course where we can’t do a damned thing with those intransigent Californian bastards.

    I’ve got news for those who think this latest story is some sort of setback for us. Hell, we’re the ones peddling it, hint hint. Let me clue you in: L.A. stadium “plans” are as simple as a colorful drawing or two and some pie in the sky promo from a rich guy. See Roski, Ed and Leiweke, Tim.

    It was good of Ed to go and pay for that environment impact statement, it was a nice touch but really, unnecessary since we were never gonna build there in a million years. We aren’t sticking one of our gilded football palaces in the middle of a bunch of freight docks and diesel exhaust… sheesh! NFL stadiums are a Destination, not a puddle you try to avoid stepping in.

    Anyway, self-important multi-millionaire bobos are a dime-a-dozen out there in SoCal, we can have our pick of various front-men any time we need them. We’re talking about Hollywood, La-La land, the home of make-believe. What, you think we don’t know how to play? We can gin up new proposed palaces overnight to suit our purposes. Chavez Ravine looks good to us… sell it baby! Did you know your local team has a lease option on it already? You’d better hurry up with the stadium cash, rubes!

    To summarize, we haven’t run this game for 19 years without a playbook–we’re the NFL, the x’s and o’s of public extortion are our domain. Taxpayers across the land will be handing us their hard-earned dough for years to come. Bank on it, rubes.

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