Chargers and Raiders say they can copy 49ers’ private stadium financing, but it’s not quite that simple

More information is trickling out about the proposed $1.7 billion San Diego Chargers/Oakland Raiders stadium in Carson, and it adds up to — well, let’s just run it down first, then see what it adds up to:

  • The promised press conference in Carson happened on Friday, and tons of local officials showed up, but no representatives of either team took the stage. (Chargers stadium chief Mark Fabiani was in the audience, but didn’t speak.) No details of how the plan would work were revealed, with one elected official (SFGate didn’t say who) saying, “The financing will work with the revenue generated by the stadium itself. I don’t have all the details. This is about convincing a community that this is a good project.”
  • Fabiani was busy talking up the press elsewhere, telling ESPN’s Aaron Markazi that St. Louis Rams owner Stan Kroenke’s announced Inglewood stadium was what prompted the Chargers to immediately jump in on a stadium elsewhere in the L.A. area: “We deliberately changed our strategy in the wake of what Kroenke did. When this opportunity to create an alternative came along we decided to seize it.” Fabiani also told Markazi that the Raiders just officially came on board last week.
  • Fabiani told Markazi that the model for the stadium is the San Francisco 49ers‘ $1.3 billion stadium in Santa Clara: “We took the template of the Santa Clara funding mechanisms … so we basically took that and adjusted it for different costs here.” (A Goldman Sachs rep who’s been working on the plan echoed this at the press conference.) He also insisted that the Chargers are prepared to fund the stadium alone if necessary.
  • Regarding the use of NFL G-4 funds for a Carson stadium, NFL VP Eric Grubman told the OC Register, “A stadium project can be eligible for league financing provided the project and its sponsors meet certain criteria. A Carson project would be eligible and could apply if it met those criteria.” Of course, one of the criteria of the G-4 fund is that “the project must not involve any relocation of or change in an affected club’s ‘home territory,'” so either Grubman is saying that the league has changed the criteria, or coyly saying that Carson wouldn’t be eligible, or just ducking the question because he doesn’t want to mess with the teams’ leverage.
  • U-T San Diego reports that San Diego residents hope the team doesn’t move, and more surprisingly, that the newspaper’s headline writers think they’re called “San Diegians.”

So what do we have? Clearly the message the teams are trying to send (or at least Fabiani is trying to send — the Raiders seem to be merely along for the ride) is “the 49ers did this in Santa Clara, so we can do it too.” There are some significant differences, though: First off, the Carson stadium is projected to cost an extra $400 million, something that additional G-4 funding won’t come close to making up, assuming the NFL changes its rules and approves it. Second, L.A. is not Silicon Valley, and the Chargers and Raiders aren’t the 49ers, meaning selling $500 million worth of personal seat licenses to fans, as the 49ers did, is less of a sure thing. And third, the NFL hasn’t committed to waiving relocation fees for teams moving to L.A., which could blow as much as another $500 million hole in the budget.

Probably the best way of looking at the Carson stadium plan is the way this commenter suggested: It’s part negotiating ploy, part fallback plan, and both Chargers owner Dean Spanos and Raiders owner Mark Davis are hoping that it will shake loose stadium money in San Diego and Oakland and they’ll never have to decide whether to shoot the dog. (Fabiani also spent a fair bit of media time over the weekend shaming San Diego officials about not being as friendly-like as Carson ones.) Grubman’s statement seems calculated to support this tactic: He’s not going to commit to G-4 funding, but he’s not going to rule it out, either.

The big question, then, is: If one or both teams can’t use the Carson threat to get stadium money out of their current home cities, will they really pull the trigger and move? That, we simply don’t know, and won’t until there’s more details revealed about how the Carson stadium money would work, beyond “We’ll have what Santa Clara is having.”

Come to think of it, though, there’s one equally big question: If the Santa Clara stadium’s private financing can be picked up and relocated to Carson, how come it can’t be done in San Diego or Oakland? Yes, L.A. is a bigger market, but market size doesn’t matter that much in the NFL. And as noted above, it comes with a bigger price tag, in both construction cost and relocation fees, than a stadium in the teams’ current homes would.

Good questions for officials, and journalists, in San Diego and Oakland to be asking, anyway. It’s possible to take threats seriously without taking them at face value, and that’s what everybody should be focusing on now. If only to take their minds off of the horror that is this photo:

Chargers, Raiders team up for $1.7B Carson stadium announcement (actual stadium not necessarily included)

Well then:

On the field, the San Diego Chargers and Oakland Raiders have had as bitter a rivalry as any in the NFL but in a sense, they’re now partners.

The teams will officially announce Friday that, while they work on stadium deals in their current cities, they will jointly pursue a shared, $1.7-billion NFL stadium in Carson as an alternative…

The Chargers and Raiders will continue to seek public subsidies for new stadiums in their home markets, but they are developing a detailed proposal for a privately financed Los Angeles venue in the event they can’t get deals done in San Diego and Oakland by the end of this year, according to the teams.

In a statement given to The Times on Thursday, the Chargers and Raiders said: “We are pursuing this stadium option in Carson for one straightforward reason: If we cannot find a permanent solution in our home markets, we have no alternative but to preserve other options to guarantee the future economic viability of our franchises.”

There are two possibilities here: Either this is the biggest NFL stadium news in the history of ever, or Chargers owner Dean Spanos and Raiders owner Mark Davis just issued a mindbendingly huge bluff. Let’s examine each of the possibilities:

  • It’s for real: $1.7 billion is an awful lot of money to spend out of your own pocket for a stadium, but if you squint, it just might possibly work with two teams sharing the load. The New York Jets and Giants owners managed to build a stadium that cost almost as much on their own dime (mostly), and if Spanos and Davis can piece together, say, $400 million from naming rights, and $800 million from seat license sales (about what the New York teams managed) to fans who don’t notice what lousy investments seat licenses are, and $400 million in NFL G-4 fund money, then that’s … still not quite enough to break even, but it’s in the ballpark, as it were.
  • It’s a bluff: Both Spanos and Davis are having a bad time of it in stadiums talks in San Diego and Oakland, though much of that is their own doing. What better time to announce that you’re moving to L.A., really you are, any day now, if you can’t get a deal done in your hometown, and if the other team also can’t get a deal done in theirs? (The team statements didn’t say what happens to this “stadium option” if one team decides to bail on it.) Actually moving to L.A. would require huge risks: Not only might the PSLs not sell like hotcakes, but the NFL could demand as much as $250 million in relocation fees per team (Spanos and Davis could try to fight it, but that would involve a lawsuit, which again means risk), plus the G-4 fund stipulates that “the project must not involve any relocation of or change in an affected club’s ‘home territory.’” Suddenly you could be looking at a $1 billion funding hole, which ain’t pretty.

There is one other likely reason for Spanos and Davis to announce this now, whether bluff or for real: What with St. Louis Rams owner Stan Kroenke announcing his own maybe-a-bluff-maybe-not stadium in Inglewood last month, and the NFL unlikely to approve more than two teams in the L.A. market (not to mention the L.A. market not likely to support more than two teams at a level sufficient to pay off two stadiums), there’s a bit of a land rush going on now to be the first to stake a claim to the market just so no one else does. Spanos, in particular, really doesn’t want two teams that aren’t his on his Southern California doorstep, so this serves as a bit of a shot across Kroenke’s bow: We’re going to build a stadium but split the price, and we don’t have a stadium offer back home like you do, and do you really want to gamble that the league will approve your plan over ours?

That’s not the worst thing for California taxpayers, frankly, since it means the three owners are so busy trying to outmaneuver each other that they can’t spend as much time and energy trying to exact tribute from local governments. (Chargers and Raiders execs claim that the Carson stadium wouldn’t require any public funds, but we’ve heard that before.) Though the prospect of Spanos and Davis using this as leverage in San Diego and Oakland could be bad news for taxpayers there, of course.

We may know slightly more once the two teams and their Carson development partners hold a press conference this afternoon. (Friday afternoon, the traditional time for dumping news that you don’t want fact-checked too thoroughly: Add that to your conspiracy bucket.) In the meantime, just enjoy the fact that one side of the stadium would apparently look like a giant, translucent, luxury-box-filled shuttlecraft:

Ah, vaportecture, where would we be without you?

Davis tries to win over Oakland in Raiders lease talks by refusing to pay rent

If your lease is running out, and you’re having trouble agreeing with your landlord on a new one, what do you do? I know for me — and by “me” I mean “Oakland Raiders owner Mark Davis” — I always declare that I’m not going to pay the rent I owe for last season, because that’ll show ‘em!

The Coliseum’s executive director Deena McClain said in a prepared statement that the team was withholding the rent payment “because of certain claims,” but would not disclose the issues raised by the team. She added that the Raiders expect to pay last season’s rent once it finalizes a lease extension to keep the team in Oakland next season.

This is pretty stupid: The Oakland-Alameda Coliseum Authority isn’t likely to cave in lease talks just because Davis is withholding a piddly $400,000 rent check, especially when they know that the Raiders have to play somewhere in 2015, which gives the city and county all the leverage. Maybe he’s getting frustrated that talks are dragging on so long without the authority agreeing to his terms because he’s Mark Davis, dammit, and just wants to throw a public hissy fit, and withholding rent is his only idea for how to do it, but I can’t see what it accomplishes other than to make him look bad. Wait, it’s Mark Davis, I mean of course “look worse.”

Anyway, the head of the Coliseum authority said of the rent payments, “I’m not worried. They’re good for it,” so sounds like this will be a tempest in a Gatorade bottle. But still, man, Mark Davis.

Two stadiums on Oakland Coliseum site wouldn’t leave much room for actual money-making development

If you want to see why many folks are skeptical about the Oakland A’s and Oakland Raiders both being able to build stadiums as part of a redevelopment of the current Coliseum site, check out these images, both courtesy of Newballpark.org. First, the original, now-discarded “Coliseum City” plan, which would have covered 800 acres on and around the current stadium site:

And now the latest 120-acre plan:

Notice what’s missing there? The vast majority of the housing development, aka “the stuff that you can actually make money on in the Bay Area.” As Newballpark.org’s Marine Layer notes, there’s still room for two stadiums on the smaller site, but you have to ask yourself: “If capital wasn’t biting at 800 acres and two stadia, why would they bite at 120 acres and two stadia?”

What about 120 acres and one stadium? That’s slightly more feasible, but we still need to see A’s owner Lew Wolff’s and Raiders owner Mark Davis’s actual financial plans for those — if it’s “120 acres of rent-free land and property tax exemptions and one stadium,” that’s not so hot a deal for Oakland. New city mayor Libby Schaaf has asked the two team owners for competing bids, anyway, so hopefully soon we can see if either is less craptacular than the other.

Warriors: We need a new $1B arena because we don’t like the restaurant manager at the old one

The San Francisco Business Times has a report out on the pressing matter of “Why the Raiders, A’s and Warriors want new homes” (verbatim headline), and the answer is: They all need to tear down their old venues and build entirely new ones at a cost of billions of dollars because they don’t like the concessionaires, duh!

Consider the recently opened BMW Club at Oracle Arena. BMW is a Warriors sponsor, but the Oakland-Alameda County Coliseum Authority contracts arena operations to Anschutz Entertainment Group. AEG, in turn, contracts arena restaurant management to Levy Restaurants.

“It’s a little bit of a challenge” to make customer service part of the overall game experience when food service and stadium operations aren’t in the Warriors’ control, team President and COO Rick Welts said.

Here’s a crazy idea: If your main complaint is the guys the county hired to run the arena operations, why don’t you offer to buy the arena operations rights from the county, and then pick your own operator? Sure, it might cost you something, but less than the billion dollars it will cost for a whole new building.

The real answer, of course, is that this is about the 74th most important reason for these teams wanting out of their old stadiums, but it’s what the Warriors president told the Business Times, so it’s what they’re going to report, dammit. Remember, kids: Friends don’t let friends read news stories that only include sports team execs and stadium developers as sources!

Oakland mayor wants A’s, Raiders to go head-to-head for Coliseum land

Oakland Raiders owner Mark Davis is reportedly about to sign a one-year lease extension at the Oakland Coliseum, which has to be considered a bit of a win for him as Coliseum officials were reportedly looking to force him to agree to a multi-year deal or make the Raiders go play in the street. But if so, any joy in the Davis camp had to be tempered by Oakland Mayor Libby Schaaf’s announcement that she plans to have the Raiders and A’s submit competing bids for redeveloping the Coliseum site.

This isn’t a terrible idea, as it at least forces both Davis and A’s owner Lew Wolff to put their money where their mouths are, and for the city to compare apples to apples in terms of who’s offering the best development-rights-funded stadium proposal — the last Raiders plan involved giving the team hundreds of millions of dollars of free land, so a little competitive bidding couldn’t hurt. Admittedly, developers who don’t want to use the land for a stadium should probably be included as well, even if only for due diligence, but baby steps, here.

Alameda County, which runs the Coliseum Authority in tandem with Oakland, still needs to sign off on Schaaf’s plan, so it’s entirely possible it won’t happen. But as former A’s exec Andy Dolich told the San Jose Mercury News, at least it’s some kind of attempt to assess the city’s options:

“This could very well be a circumstance where the mayor understands the clock is ticking,” he said. “You can’t wait forever. You’re going to have to push people in a way that they don’t want to be pushed to see what is reality and what is fantasy.”

The danger here, on the other hand, would be that the public debate will end up coming down to “Which stadium plan is better?” even if both of them suck from the public’s perspective. But still, getting two sports magnates to fight for your affections isn’t the worst way of trying to get a better deal, even if the deal that results may just be the lesser of two evils.

 

 

Hey, everybody, let’s put on a Raiders stadium-raising!

So the Oakland Raiders may not be moving anywhere, and owner Mark Davis may be stuck trying to negotiate a one-year lease with Oakland so that he can have somewhere to play in 2015 but still threaten to move in 2016. But in the spirit of the season, people are trying to help Davis with his problem:

Neither of these is a remotely fleshed out idea, but then, neither is building a billion-dollar stadium with no idea of how to pay for it. So here’s an idea: If you want to do something nice for one of everybody’s least favorite NFL owners this season, send him an idea for how to get the new stadium he wants without having to break anybody’s budget. Maybe something he can build with cinnamon sticks and a hot glue gun. Remember, it’s the thought that counts. Happy Saturnalia, everybody!

Sad, deluded San Antonio people still think the Raiders are moving there

Now that the NFL has apparently officially announced that no teams will move to Los Angeles in 2015, the only remaining unfounded relocation rumor is Oakland Raiders-to-San Antonio. So naturally, San Antonio (unelected) officials are doubling down on that angle, as is San Antonio Business Journal reporter/project coordinator (project coordinator?) W. Scott Bailey:

I reached out to San Antonio Chamber of Commerce President and CEO Richard Perez, who told me, “We feel we are still in the hunt.” …

Former mayor Henry Cisneros, who initiated relocation talks between San Antonio leaders and the Raiders, told me in recent days, “I know for a fact that we have moved to a different place. We have converted ourselves into a real option, where the Raiders know they can make more money than they are making now in Oakland by moving to San Antonio.”

That seems dubious at best, given that San Antonio’s Alamodome is 21 years old (which is “decrepit” in NFL years), that there’s no plan for a new or refurbished stadium, and that the San Antonio Spurs are even threatening to throw roadblocks in front of any NFL move to their city.

But talk like Cisneros’s serves a very important role for Raiders owner Mark Davis, who is currently trying to get a one-year lease extension at the Oakland Coliseum, while Oakland officials want to get him to sign a multi-year deal. Picture this scene at the negotiating table:

Coliseum official: We have a lovely ten-year extension here for you to sign.

Davis: Screw you, I’m not signing nothing longer than one year.

Coliseum official: And where exactly are you going to play this year? Los Angeles?

Davis: [Pulls out copy of San Antonio Business Journal, throws it on table.]

Coliseum official: In 20,000 pounds of Goya kidney beans?

Davis: No, no, the other article!

Coliseum official: Oh. [pause] You do know that Henry Cisneros hasn’t actually been mayor of San Antonio since 1989, right?

This could be a while.

 

Nobody’s moving to L.A., so now can we talk about that Raiders lease extension?

This week in “Which NFL teams are moving to L.A. in 2015?” rumors, we have … nobody!

Per “sources,” yes, but Schefter is reporting it as fact, and the NFL isn’t denying it, so this certainly has the whiff at least of official leak. And the San Diego Chargers did already announce that they’re staying put for 2015, which they likely wouldn’t have done if there were any chance of teams going to L.A., and besides there’s just about zero chance of an L.A. stadium deal getting done in time for a relocation announcement by February. So, really, I’m confident we can stick a fork in this for now, and stop with all the rumor-mongering about who’s headed to—

Fox Sports 1 Insider Jay Glazer reports the NFL is waiting to get better offers for stadium sites around Los Angeles, with St. Louis Rams clear front-runner to come to city.

Yo! Jay! Stand down, already!

In related news, the Oakland Raiders are apparently set to announce a one-year extension of their lease at the Oakland Coliseum, which is a bit weird, as I’m pretty sure that the Coliseum Authority would have to sign off on that as well — and would be perfectly within their rights to tell Mark Davis to take his team and go play in the street if he doesn’t agree to a multiyear extension. This one is worth watching closely, or would be if everyone could stop playing “Who’s moving to the imaginary L.A. stadium first?”

Chargers staying in San Diego another year, Raiders still rumored to be moving everywhere and its sister

Today in people who used to be famous talking about where the Oakland Raiders might move, it’s former San Antonio mayor Henry Cisneros, who says that the team could be taking his city seriously as — hey, wait a minute! This is a repeat!

In newsier NFL maybe-relocation news, the San Diego Chargers owners have announced that they’re not opting out of their lease for 2015, which means they’re not moving to Los Angeles to play in a stadium that hasn’t even been planned yet, either. The Los Angeles Times’ Sam Farmer takes this as a sign that no NFL teams are moving to L.A. next year, on the theory that if somebody were, then the Chargers would want in too to avoid being left stuck in San Diego with an old stadium and two other teams on their doorstep. I’d stick with the theory that nobody’s moving to L.A. because there’s nowhere to play there that’s any better than teams’ old stadium back home, though.