Chargers agree to move to L.A., vow to stay put in San Diego, all in a day’s work as an NFL owner

So here’s some things that happened on Friday:

  • The San Diego Union-Tribune reported (in an article no longer online in its original form) that the Los Angeles Rams (we should start calling them that now, right?) and San Diego Chargers had reached agreement in principle on a deal to share the Rams’ new Inglewood stadium.
  • Chargers owner Dean Spanos issued an open letter to fans stating that “our team will stay in San Diego for the 2016 season” and while he has an “option” to move to L.A., “my focus is on San Diego.”

So what does this mean, exactly? Clearly, Spanos has gotten Rams owner Stan Kroenke to agree to give him the rest of the year to lobby San Diego to cough up more money to keep its team — or as Spanos put it in his letter, to “determine the best next steps and how to deploy the additional resources provided by the NFL.” (That’d be the extra $100 million that the NFL is offering Oakland and San Diego as a sweetener for stadium deals, something that was completely unthinkable when it was St. Louis asking for it.) So expect some nasty, nasty stadium talks to continue the rest of this year, with Spanos clearing his throat and glancing in the general direction of Inglewood anytime someone suggests he kick in more of his own money.

The big question San Diego needs to be asking now is at what point Spanos will feel comfortable walking away from the table and going to Los Angeles — which unfortunately is unknowable, since the details of the deal between Kroenke and Spanos aren’t public. In fact, we have no way of knowing if the details have even been spelled out yet — it’s entirely possible that Spanos went to Kroenke and said, “Stan, let’s put out an announcement, I gotta light a fire under San Diego, we can work out the rest later,” and Kroenke grunted enigmatically.

In short, the NFL owners are playing this perfectly, levying move threats while openly proclaiming their love for current NFL cities (the better not to provoke pitchforks and torches) and holding their cards close to their vest. Which shouldn’t be surprising, as this is the business they’re in, but it’s always inspiring to watch evil geniuses at work up close. If the Chargers do end up getting the cash and staying put, it’ll be interesting to see if Raiders owner Mark Davis can pull off the same trick with Oakland.


12 comments on “Chargers agree to move to L.A., vow to stay put in San Diego, all in a day’s work as an NFL owner

  1. Some details of the Chargers/Rams deal are here: http://www.latimes.com/sports/nfl/la-sp-nfl-la-chargers-20160129-20-story.html

    Basically the Chargers and Rams will put naming rights, PSL sales & non-team event revenues towards stadium costs, but each get to keep their own game day revenue (ticket sales, merch, etc.). After deducting the cost of stadium debt, the teams would split any profits from shared stadium revenues. The Rams figure that 62.5% of shared revenues will be needed to cover stadium construction debt, so that would mean that 18.75% each will go to the Rams and Chargers on a yearly basis.

    My guess is that shared stadium profits will actually be closer to 0% and the Chargers know this. So, the Chargers would be allowed to play in a new stadium in Inglewood for $1/year in rent, but that’d be it. Their only source of revenues would be national revenues, ticket sales and other game day revenues. They’d forever be stuck in the lower tier of the League, at least in terms of money.

    I don’t doubt that the Chargers will take the Inglewood deal if San Diego plays hardball with them, but realistically the Chargers have lost almost all of their leverage.

  2. Minor new news on the Oakland situation:

    http://profootballtalk.nbcsports.com/2016/02/01/oakland-mayor-wants-to-renew-lease-then-focus-on-new-stadium/

    Schaaf wants Davis to agree to a new lease on O.co before any negotiations for a new stadium in Oakland (which presumably will amount to nothing). I think this is a little tougher than we’ve seen before?

    Anyway we’re well on our way to the Raiders still playing in O.co in 2035, whether Davis likes it or not.

  3. Thanks, Ben. That’s just the NFL proposal for a shared stadium, not necessarily what Spanos and Kroenke have agreed to, but yeah, it’s a useful starting point when it’s all the information we have.

    I agree with you that it’s almost certain that PSLs + naming rights + G-4 money is almost certainly not going to leave any surplus after paying stadium construction costs, so 18.75% of nothing will amount to nothing. The L.A. Times piece doesn’t actually say that the Chargers would be $1 a year rent, though, so we have really no idea what’s been agreed to there, if anything.

    It’ll be very interesting to see whether San Diego officials think they have the Chargers over a barrel, or vice versa. This continues to be one of the stranger Mexican standoffs in sports history.

  4. And as for Libby Schaaf in Oakland, she doesn’t have complete say over the Raiders’ lease, right? It’s up to both the city and the county, via the Coliseum Authority?

  5. I agree Ben. And if by some miracle there are a few points of stadium profit to be shared, my guess would be that the split agreed to will see the first 18% going either entirely or preferentially to the Rams and anything after that will go to a tenant team.

    So…. have we reached the point where even Spanos now realizes he is in Blazing Saddles territory (for those of you less ancient than I, Cleavon Little holds a gun to his own head and saying “nobody move or I shoot”)?

    Whether deliberately or by accident (you’d hope for their sake it’s the latter), the Chargers appear to have taken themselves hostage at this point in time.

    Perhaps Mr. Davis is less disappointed that he wasn’t allowed the opportunity to do the same this week than he was last. Of course, his chance to hold himself for ransom could be just weeks away…

  6. Based on a recent HBO Real Sports segment, Buffalo fan violence could be reduced if the state of NY makes marijuana use legal. Not saying I agree, but that was an interesting piece.

  7. This works out well for the chargers… Flexibility and strong arm possibilities.

    The new push here is to lump the convention center and stadium together downtown in the hopes those combined will lead to enough votes in November. Add the threat of losing comic con and you have a good dual purpose vote getter going.

    Will the amount of time it will supposedly take to remove the bus lot make spanos think twice? It did before even though he liked the site.

    He didn’t want mission valley… So that has to be out as a possibility right?

    The city should say that you put the G4 fund, the extra 100 million, 550 million you would have spent on relocation, and the original 200 in the csag plan in and we have a deal.

    Likely? Nope.

    No word that spanos has actually talked to the city either so I’m surprised by the fact they’re staying for 2016. It’s a lame duck season for sure.

  8. Hmmmn.

    Chris, do you think that “free weed for fans” could qualify under Cincinnati’s ‘holographic display’ clause?

  9. It really is amazing how bad a deal an NFL team is prepared to take in order to have a different deal. It really looks like Kroenke sold out a few owners to get what (presumably) works out to be a better deal for himself.

    Unless SD think that there’s a huge untapped market for LA Chargers throwbacks and tickets, it is hard to understand how burning down a 50 year old business leaves the Spanos family and/or the team better off.

  10. Everyone is missing a key point in all of this.

    That is Spanos protecting his revenue streams for 2016. Right now he has nowhere to play in LA for 2016-2018.

    LA Coliseum only approved one team, his options are Dodger stadium, Anaheim Stadium or worse yet (if this is even possible) StubHub Center. He would for sure lose money over the next 3 years waiting for Inglewood to open up. The Rams are way ahead of him, big time.

    By negotiating a deal in advance with Kroenke, holding on to it for 1 year and stating publicly he is going to try in San Diego one more time he protects his 64.8M profit (Forbes) he had last season for 2016. He will for sure get sellouts for 2016 now.

    He has 100M extra to work with, and if the ultra rich County/City of San Diego drop the vote requirement (which is not necessary since no new taxes are being levied) he gets his SD stadium. Irony here is County/City of SD are flush with cash, they could publicly finance the whole thing and still have massive money left over. A very well fiscally run municipality I must admit.

    More than likely it goes to a vote, gets shot down and he moves to LA anyways. In this case no one in San Diego can get mad as it is their fault he left at the end. In this case he might preserve some of his San Diego fan base to travel on Sunday’s to LA.

    In the end, he has extra leverage, gets to play in SD one more year, protects his profit for 2016 and just maybe he gets his San Diego miracle.

    As for the Raiders……You wonder why they finished 3rd in all of this? Mark Davis’ haircut says it all. Even Raiders fans are ashamed of him.

  11. By your thesis, he’d be in a hard way in 2017. Why not just announce a lease for two years?

    Probably would be more fair to say, should a vote be held and the Chargers left, that it was the “choice” of San Diegans rather than the “fault.”

    Not sure that a year of sellouts is a slam-dunk either, given the rather poor manner that the Spanos family has treated long-time customers.

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