Everyone knows what the NFL-to-LA negotiations are, commences haggling over the price

I got busy yesterday preparing for my talk this morning reading from the Coney Island chapter-in-progress of The Brooklyn Wars (if you want to see some highlights, Amy Nicholson of Zipper fame did some livetweeting), which means I didn’t get a chance to recap the flood of news around Wednesday’s presentations to the NFL by cities whose teams are threatening to move to L.A. Not that there was much real news in the sense of anyone coming up with new plans or decisions on how L.A. relocation will decided or discoveries of a money tree for funding the actual stadiums or anything, but, you know what, let’s just get to it, shall we:

  • Officials from each city — San Diego, Oakland, and St. Louis — spent two hours apiece meeting with NFL owners, after which St. Louis stadium point person Dave Peacock said, “I doubt our presentation could have gone much better.” Which is … good, right? This is like the “You can’t put too much water in a nuclear reactor” SNL sketch.
  • San Francisco 49ers owner Jed York came out of the meeting and said, “Let’s look at the markets where teams are already, and if they prove to not be viable, then we will look at the next step, which is relocation,” and Carolina Panthers owner Jerry Richardson added that a St. Louis stadium proposal which meets “the protocol for the NFL on relocation” would force the league to keep the Rams there. (Which, given that the NFL gets to write that protocol, doesn’t mean a ton, but it got everyone in St. Louis excited that “If we throw enough money at the Rams, they’ll have to stay, even if we don’t know how much money is enough!”
  • The Chargers and Raiders then blew up the news cycle entirely by announcing that their new point person for their proposed Carson stadium would be Bob Iger, the freaking CEO of freaking Disney. Which means nothing, really, except that they’re “serious” and all that, since “the chair of Disney is going to run our stadium” sounds better than “we want to build a stadium and we have some drawings and, uh, yeah.”
  • Oakland Mayor Libby Schaaf revealed that she’s considering issuing city lease revenue bonds for a Raiders stadium, for the first time opening the door to the city spending money on actual stadium construction costs. (ABC News calls them “tax-exempt bonds,” but lease revenue bonds for stadiums are required to be taxable, so forget that.) Lease revenue bonds would be repaid by rent payments by the Raiders, so really would just be a way of letting Mark Davis use the city’s low-interest credit card if he agrees to pay it off — though Schaaf also opened up the possibility of using tax increment financing (i.e., kicking back taxes paid by the Raiders and surrounding development), which obviously would be a whole nother kettle of fish.

In short … okay, there is no in short, since this is just a continuation of all the sides in this multidimensional game of chicken angling for an advantage. Will St. Louis convince NFL owner that their $500 million-ish stadium subsidy offer to the Rams is too rich to turn down? Will Schaaf’s offer of cheap money and maybe a smidge of tax kickbacks lure Davis into giving up on wedging his foot into the L.A. door and sticking with Oakland? Does Bob Iger provide Carson with the buzz it’s been missing since it discarded its idea for a giant eternal Al Davis flame? And most important, can anyone really make gobs of money on a move to L.A., or is it some combination of calculated risk and blackmail threat?

Answers to thee questions and more coming soon, I hope. Though I also wouldn’t recommend holding your breath, because the NFL’s deadlines, like its relocation protocols, are decided by the NFL, so if it’s in their interest to wait, they’re damn well gonna wait.


38 comments on “Everyone knows what the NFL-to-LA negotiations are, commences haggling over the price

  1. Is there any consensus view on how the NFL views the opportunity cost of losing L.A. as its primary relocation threat? I suppose that leagues would need to pull the trigger on relocation from time to time to make the threat stick, but that comes at a big cost if the next city in line is significantly less attractive.

    In the case of L.A., what would the next city in line be? St. Louis and Oakland would have teams twice each over a 30-year period. A vacated San Diego, or an open London/San Antonio/wherever seem like a huge drop off in leverage.

    “Give us $1 billion in free cash or we move the team to Hartford” just doesn’t have the same effect as the L.A. threat. I suppose the same applies to the NBA regarding Seattle, although the drop-off from Seattle to Louisville or wherever else may not be nearly as severe.

  2. Glad to see Schaff is holding the line on the bonds being paid by the lease, but I missed the part in her presentation where she opened the door on TIFs. Anybody have a link? I tried to find it again but couldn’t.

  3. Didn’t see Sean’s comment before I posted mine, but I was thinking the same thing. Gotta believe some owners are sitting around thinking that if LA comes out of the “threat” pool, there isn’t much left to hold their cities hostage to (any guesses who has that midset?). Not sure a relocation fee could match the value of what they estimate they would want to extract from their current cities for improvements, re-build, etc.

    On the other hand, the NFL could gain some $$ by a team moving to LA, and extracting NFL Ticket fees from folks who want to watch games they used to get for free b/c no team was there.

  4. It has always been fiction that the NFL likes having L.A. as a re-location threat. That’s just something that out-of-touch academics and their disciples have conjured up.

    I am sure some owners — including the Santa Clara owner — like having L.A. open because they believe that it gives their teams more exposure in a big market.

  5. Great. smh. Our mayor is making the rounds with local radio media and is ok if public money is used to cover the lease if revenues do not pan out. But she will work ” very hard” to make sure that does not happen….

    Oakland also covering the remaining debt on MT. Davis is on the table

    WoW this is scary…

  6. For a “fiction” it certainly has been used often enough for the express purpose of getting perfectly good stadiums replaced or upgraded.

  7. “It has always been fiction that the NFL likes having L.A. as a re-location threat.”

    I can hear our friend “Piggy” laughing all the way across the interwebz.

  8. @Ben…what is it exactly you think Kronke, Daivs and Spanos are doing if not threatening to leave for LA in order to extort money from their current cities? It doesn’t take a PhD to know this is a pretty basic negotiating tactic. No different than threatening your boss with a job offer you’ve gotten from another company so you can get a promotion, bump in pay, or window cubicle from him/her.

    I can’t imagine the Niners care too much about the exposure in other markets other than their own. Sure, it’s nice to know your game gets beamed south a few hundred miles, maybe you sell a few more Kaep–I mean Gabbert–jerseys at Foot Locker in the Redondo Beach mall, and maybe its always a good laugh to stick it to other owners when you can say you have more fans than them in Pomona or Santa Monica. But apparently no team can claim to be the top dog. See: http://articles.latimes.com/2011/jan/25/sports/la-sp-nfl-la-20110126. “”It’s iconic national-appeal teams, star players and matchups that drive ratings in Los Angeles,” said Bill Wanger, executive vice president of programming and research for Fox Sports.

    If I am not mistaken, the league shares all TV revenues. So the greatest value of LA is either as a bargaining chip or actually being the team that gets to call it home (assuming they can draw fans and make the numbers work. Which never quite worked for the Raiders or Rams).

  9. Ben brings an important contrarian view to a lot of these discussions, but the claim that only eggheads and their groupies (what?) believe that a legitimate relocation threat is valuable is disingenuous at best. For very recent example, take a peek at any of the numerous threads at Sonics Rising or historical threads at Bucks and Kings sites to drink in the array of ivory tower freaks using all their fancy book-learnin’ to discuss the value of a viable relocation threat.

    The people recognizing this issue cover a broad range of backgrounds with opposing goals, yet they agree on this concept. Sacramento and Milwaukee do not get their boondoggle arenas without the specter of relocation to Seattle. And Seattle likely doesn’t sniff a team for a long time because of the foregone leverage that would accompany relocation or expansion to Seattle.

    Ben’s view may fly with others that want to make America great again, but it is folly to believe that there is no value in having a relocation threat to hammer state and local governments with in the effort to extract handouts. If you owned a franchise, why wouldn’t you want to have that? It works.

  10. @ Neil

    You do know that Disney owns ESPN right? Iger is already a big player in the NFL, you might like this photo of Goodell, Kraft, and Iger chatting it up.

    10news.com/news/disney-ceo-to-head-chargers-la-stadium-push

    Carson is the clear favorite at this point and the St. Louis spending bill is in committee. A public hearing was held yesterday and another will be held tomorrow. Even the aldermen against the spending think it will pass in a few weeks. At that point Carson wins the stadium fight and Kroenke gets to build his Inglewood retail center with a 99,999 square foot Walmart and HPLC still gets the open ended tax reimbursements (worth $100s of millions) from the gullible Inglewood taxpayers. All three owners get new stadiums to play in and the NFL somehow manages to screw taxpayers who don’t get a team or stadium. Kudos.

    London is the new relocation threat and they already have the stadium. Get with the program everyone, how have you missed it?

    Relocation fees for the Chargers and Raiders will be negligible, in the $30 million to $60 million range per team. The ignorant fools throwing out figures in the $300 million to $1 billion range don’t understand the difference between expansion fees and relocation fees. Of course sportswriters and talkradio/TV buffoons can’t grasp the concept of revenue dilution, it would be like trying to teach calculus to a mule.

  11. Yeah, I heard about Disney buying ESPN. I think I was in college then.

    As for the rest of it, it’s a nice scenario you paint. I’d prefer to see some actual evidence for any of it rather than argument by assertion and name-calling, but to each his own.

  12. Carson is the clear favorite? I know of no term sheet to view or details of the financing plan. Nor is there information as to the environmental clean up costs for the property and who will undertake that liability. The Inglewood project is ready to go.

  13. @ Neil, How about you get the documents for Kroenke’s supposed 60 acre purchase in Inglewood. Make yourself useful instead of just copying and pasting articles. San Diego’s UT reported the purchase price of the Chargers and Raiders Inglewood land from LA county docs just days after escrow closed. No one has reported the purchase price of Kroenke’s 60 acres. I’ve already provided more evidence on what’s going on in LA, especially Carson, than you have brought to the table.

    Wanna guess where I got the 99,999 square footage number for the Inglewood Walmart? It’s in the stadium initiative, people need to make the effort to educate themselves but that requires reading long documents.

  14. Carson also agreed to assume all liability finishing the cleanup and any future potential liability related to the landfill. You have to read the docs.

  15. ROTFL!!! Carson is going to assume the costs and own the stadium? Are you confusing Carson with Beverly Hills?

  16. Nothing but rhetoric from Mr. Benz.

    “London” already has a stadium.

    No, no “it” doesn’t. There are several large stadia in London, but as noted in response to the same fallacious argument in the past, the NFL sized/calibre stadia in London are all privately owned. To play there the NFL is going to have to pay. And pay significant amounts.

    Whether the topic is London, Los Angeles, or Boise, the NFL is not going to permanently station a team anywhere unless the stadium financial details suit them. Paying the RFU, the FA or one of the EPL owned clubs to rent their stadium isn’t going to appeal to the NFL anymore than being paying tenants in the LA Coliseum or Rose Bowl would.

    How did he miss that?

  17. I attended college in Carson. Believe me, that town doesn’t have the fiscal resources to maintain an NFL stadium. Furthermore, given the Los Angeles Coliseum is the only stadium in Southern California willing to temporarily house a relocating NFL team, the consensus rumor has been the last team they want to accommodate is the Raiders.

  18. LA Coliseum is run by USC. USC has no preference whether its the Rams, Raiders, or whoever subleasing from them for a couple of years. All they would care about is if the check clears.

  19. “…brings an important contrarian view to a lot of these discussions…”

    Or is our in-house “Stephen Colbert”-style parodist, I’m honestly not sure.

    “…the consensus rumor…”

    Where does one go to find these kinds of consensuses?

  20. USC will care once the fan violence begins to translate into lawsuits. There were plenty of fights involving Raiders fans when they first played in LA. I expect not much has changed since then.

  21. (Moderator’s note: Some comments or portions of comments above have been deleted or blocked for violating the site rule against personal attacks on other commenters. Remember, you can criticize what someone is saying, but criticizing the person saying it will get your comment deleted, and multiple violations will get you banned from this site.)

  22. Sean: my guess as to the next “threat city” would be San Antonio, TX. It’s got money, and Texas is sports mad.

    I say nothing about whether they could get it done, only that they have the potential to get an NFL team if they tried.

    Past that… Portland, OR (unlikely just because they (1) don’t have room and (2) don’t like the NFL enough), Albuquerque, NM? Oklahoma City? Fresno? Columbus, OH?

    Curious to see once the NFL finally gets to LA.

  23. John Bladen, you are completely wrong. London has many stadiums and you might not know this but the NFL already plays 3 regular season games a year in London. In fact the NFL committed to playing an additional game in London next year at Twickenham Stadium and at least 2 more games per year at Tottenham Hotspur’s new stadium when it opens in 2018, in addition to their regular schedule of games at Wembley Stadium.

    London will definitely be the next city used as the NFL’s main relocation threat if LA is taken.

  24. “… the next “threat city” would be San Antonio, TX.”

    Would seem to make sense that next in line will be those cities that have seen success with other “major league” franchises and, of course, any that lose their team(s) in this relocation. London has always seemed a bit far-fetched to me. A threat has to have some potential for the trigger being pulled and travel to Europe will remain a major stumbling block until we return to the days of supersonic air travel. But they’ll be playing more than half of a home season there in the near future, so…youneverknow.

  25. The nice thing from the NFL’s perspective is that the national TV contracts mean you can put a team most anywhere and it’ll survive, if not necessarily thrive. So while London, San Antonio, and any cities abandoned by teams moving to Los Angeles may not be quite the bogeyman that L.A. is, they’ll do — especially when you don’t actually need a viable threat, just one that’ll play in the newspapers, or so the Kansas City Penguins tell me.

  26. The greatest trick the NFL devil ever pulled was making the world think that every one of it’s teams wants to move to Los Angeles…. fiction, ha!

    Club of 32 members often refer to it as “Leverage Angeles”. As I’ve said many times, the trick is keeping a lot of balls in the air, juggling stories and bogeymen to bewilder the rubes and the pols who run things into giving in to their fears and offering up panic-fueled amounts of delectable, green public stadium cash. A few smart pols get the game, so those you grease in various ways. It takes time, but it works every time. Fiction… ha!

  27. As long as their is an empty chair someone can move. I don’t buy London either, but once St. Louis and/or San Diego are open, there’s your threat. Plus Sacremento or San Antonio, or wherever; not to mention suburbs, in 25 years Atlanta might move to Cobb county!

    London can serve as a place to take games for teams whose stadiums are not up to standard. The Denver Broncos will probably say that we need 80 million for upgrades or we move a home game each year to London.

  28. It’s interesting that Oakland is thinking of using lease revenue bonds. Those were used to avoid a vote on the Kings’ arena in Sacramento. If the issue went to the ballot in Oakland, it would fail big time. Oakland already got screwed by the Raiders once. I doubt people would vote for a do-over.

  29. “My guess as to the next ‘threat city’ would be San Antonio, TX. It’s got money, and Texas is sports mad.”

    I’m not sure by what measure San Antonio has “got money”. It would be, on a per capita income the poorest metro area with an NFL team. The following MSAs have both a larger population and higher per capita income than San Antonio: Portland, Austin, Columbus, Sacramento, Orlando, Las Vegas, Norfolk. San Antonio is both small and poor.

    All that means, of course, is San Antonio is not well positioned for a privately financed stadium, which requires a lot of rich people willing to buy PSLs.

    That doesn’t mean San Antonio won’t get an NFL team. Perhaps what you mean is San Antonio is willing to toss taxpayer money at teams. We’ve seen plenty of markets get teams since LA lost its NFL teams: Baltimore and Nashville in the NFL. Memphis, New Orleans and Oklahoma City for the NBA, etc. Those cities weren’t really “threat cities” just places teams actually moved because taxpayers offered a bucket of money and pretty quickly at that.

    A “threat city” is a city where you threaten to move but then don’t because you extracted a ton of money from your current city. A good threat city has to be bigger than the current city and really play to the inferiority complex of mid-sized cities. A threat city can be allergic to squandering public money on sports stadiums. A threat city doesn’t have to be “sports mad.” You aren’t going to move there anyways. LA and Seattle serve to evoke the insecurities of St Louis or Milwaukee.

    San Antonio doesn’t really work as a threat city. London might but the fact it’s outside the US is less than ideal. The reality is LA will probably remain the threat city for a long time because the economics of LA don’t really work out but it’s great for extracting concessions from St Louis. The real question is what’s going to happen to the Raiders as neither Oakland nor LA is going to give them money no matter how much you dangle the other city out there. Perhaps they end up threatening LA and actually moving to someplace like San Antonio.

  30. Oh, yeah, and re: Portland, if you think Portland doesn’t have room, you’ve never been to Portland. It’s not really that dense of a city and there’s plenty of land. Also, if you think they “don’t like the NFL enough” there’s no way to prove or disprove that but the Blazers and Timbers both draw huge crowds.

    What makes Portland a poor “threat” city is its smallish size and hipster image makes you think those things. What makes it a poor relocation city is it, like most West Coast cities, isn’t really in favor of sports handouts. They’d rather have another light rail line.

  31. We will all agree to disagree. San Antonio serves as a threat because of the Alamodome. However, where will the money come from to fund an NFL stadium? Also, I would expect strong opposition from Jerry Jones.
    Personally, I view Sacramento not as a threat city, but the logical Plan “B” for the Raiders. If nothing comes from the City of Oakland, a relocation to Sacramento would keep the fan base relatively close to the franchise. In addition, the Raiders can likely build their stadium in Sacramento for less than what it would cost to develop one in Oakland.

  32. “Where will the money come from to fund an NFL stadium?” From the taxpayers of course. Same as all the other swindles. Texans have shown time and time again that massive handouts to sports teams is the one thing they are actually ok with the government spending money on.

    As for Sacramento being close to the fans, if you believe Facebook, the main centers of Raiders fans are LA and its suburbs, the Owens Valley and Southern Oregon. In Northern California, the Raiders are the less popular team. If they weren’t they’d finance their stadium the way 49ers did. Even if you thought Raiders fans were in Alameda County, might I assume you’ve never driven down interstate 80 especially after the Tahoe ski resorts open?

  33. First, the Raiders will have a difficult time financing their stadium in Oakland because its already been proven that PSL sales for the franchise will not work sufficiently enough to pay for a $1 billion stadium. This being the case, they will have to find a way to build a less expensive stadium.
    Second, its obvious the Raiders primary fan base comes from the counties of Alameda, Contra Costa and Solano. I doubt if the Oakland Coliseum is 60,000+ filled with people from LA and Oregon.
    As for the 80 freeway, I have driven on it during the peak seasons. You will encounter traffic anywhere you go in the most densely populated areas of California. At the least, I foresee the traffic issues being better managed in Sacramento as opposed to Oakland or Santa Clara.

  34. ” I doubt if the Oakland Coliseum is 60,000+ filled with people from LA and Oregon.”

    I doubt that too since the Raiders so far have an average attendance of 54,428, third worst in the NFL and about 86% of its capacity.

  35. “Past is prologue.” ~William Shakespeare. This applies to the Raiders and their last venture into Southern California.

    http://www.nytimes.com/1995/07/09/sports/pro-football-raiders-divorce-made-in-heaven.html

  36. As a Sacramento resident, I do not want the Raiders here. I would support a stadium for the A’s though.