NFL considering half-billion-dollar L.A. relocation fee, could put off decision until 2017

Of course, whether or not St. Louis and Missouri approve $500 million or so in subsidies for a new Rams stadium, there’s still the little matter of the NFL approving which team or teams it will allow to move to Los Angeles. And despite rumors that the league was getting close to a decision, Ian Rapoport of the league-owned now reports that the L.A. situation is in “gridlock,” and while the “hope” is that a league vote could come by May, it might not take place until 2017.

What’s the holdup? It’s always possible that this is just a matter of the owners’ cabal not being able to decide which of their brethren’s move plans they want to approve, or that they’re waiting to see what city officials in St. Louis, San Diego, and Oakland ultimately approve. (Though if so, why leak it to the media when a looming deadline is more likely to create a sense of urgency for those voting on stadium plans?)

There’s one other wild card, though, which is that, according to a report last week in Sports Business Journal, NFL owners are looking to get $500-600 million in relocation fees from any team moving to L.A. Given that the best guess is that a relocated L.A. team would see its revenues rise by a present value of maybe $500 million or so, taking on well over a billion dollars in stadium debt plus another half a billion in relocation fees seems like financial suicide.

So to the existing game of chicken between the owners of Rams, Chargers, and Raiders and the three cities that want to keep them, add in an overlay of an additional game of chicken between the L.A.-seeking owners and the NFL over how much cash they’ll have to cough up to the league to be allowed to move. I can see where this might result in gridlock, yes.

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.

Do the financial numbers justify an NFL move to L.A.? Sorta

I’ve been threatening for a while to do a deep dive into the numbers behind moving an NFL team to Los Angeles — in short, does market size still not matter much in the NFL because everyone shares the same national TV money, or have the economics changed to where L.A. is now a potential goldmine? Thanks to Vice Sports, I finally had time to do so, and the answer is: a little of both. The short version:

  • NFL revenues may still be fairly flat across franchises compared to other leagues, but they’re up overall — and even if owning a big-market franchise is only worth 30% more than a small-market one, if the actual value of that 30% has risen, it means building an L.A. stadium is a better investment for owners than it was just five years ago.
  • Personal seat licenses have potentially changed the game, since now that the 49ers paid for a stadium essentially by crowdfunding, everyone else thinks they can, too, if the market is good enough.
  • It’s still not enough to explain why St. Louis Rams owner Stan Kroenke would want to spend $1.8 billion on an L.A. stadium. Says Roger Noll, dean of sports economists: “Yes, it’s worth something. It’s not billions of dollars.” But Kroenke may have other reasons for wanting in to L.A. — and even if he doesn’t, the gamesmanship behind the fight to move to L.A. may be making his decision to take on the risk, as well as that of the San Diego Chargers and Oakland Raiders owners, unstoppable.

Anyway, go read it for yourself and then we can always debate the numbers in comments below. It’s not quite a definitive answer to whether all the L.A. move talk is serious, a bluff, or somewhere in between, but it’s at least an attempt to establish some basis for discussing it.


NFL to meet on Veterans Day to hear latest proposals to end the L.A. relocation war

Mark down November 11 as the day to mourn the senseless loss of 38 million lives in World War I. Also, the day for St. Louis, San Diego, and Oakland to make their latest stadium presentations to the NFL.

Not that either is likely to provide any new news: We already know how those cities’ stadium plans are turning out (if not quite as definitively as the Great War, then close enough), so don’t expect any sudden surprises. And the presentations will take place in a closed NFL meeting room, and the league has said that no owners will be available for interviews afterwards, so there’s not even likely to be any good tea-leaf reading opportunities.

Behind closed doors, at least, the presentations are likely to give owners something to chew on, so maybe later in November we’ll be treated to some insider gossip about who’s siding with or against whom, which is always fun. As always, I’d prefer some coverage of whether any of these stadium plans — in the three current NFL cities or in L.A. — make any damn sense, but I guess if I want that job done, I’m just going to have to do it myself.

Watching NFL stadium extortion in slow motion is not pretty

Marine Layer of watched NFL VP Eric Grubman’s three-hour “town hall” with Oakland Raiders fans so you didn’t have to, and his recap is well worth reading. If you just want it in bullet points, though, here you go:

  • This was a sad spectacle, not that anyone should have expected anything different: “As each story about generational bonding or heartbreak was heard, the more it sounded like groveling. That’s what the owners and the NFL have reduced fans to doing: begging to keep the team in town. … Some guy within NFL Films will be tasked with editing the combined nine hours of testimony down to probably 30 minutes that will be consumed by the collective 32 NFL owners at a future league meeting. I don’t envy that person one bit.”
  • Grubman is the NFL’s answer to George Clooney’s smarmy hatchet man in Up in the Air: “Grubman’s ability to empathize with every fan and speaker was amazing to watch. Veterans and government employees received laudatory Thank you for your service salutations. Several times he prefaced a remark with, I know what it’s like to be a fan. It was as breathtaking and sickening a performance as I’ve ever seen – including Clooney’s, which netted him an Oscar nomination.”
  • Nobody has a magic wand: “No one wants to be left with the check at the end of the night, whether it’s Davis and his ownership partners, the City of Oakland and Alameda County, or stadium financiers. This is not a trivial amount of money – $400 million – that we’re talking about. Fans need to stop treating this issue like it is.”

That’s about the size of it. Not like any of this public charade is likely to matter much in the end — that’s going to come down to 32 guys in a room and someone with a list of subsidy promises and an adding machine — but it’s important to remember that even corporate sports behemoths feel the need to worry a smidge about public perceptions.

Oakland to get yet another plan to pay for Raiders stadium with elfin magic

There’s about to be a new Oakland Raiders stadium plan in town: Tipping Point Sports, the consultant hired by the city of Oakland after the last plan crashed and burned, is going to present its proposal to the Oakland city council this week, and the Bay Area News Group has some hints of what it will include:

The proposal from Oakland’s newly hired stadium consultant Mitchell Ziets of Tipping Point Sports won’t include public money to help build the estimated $900 million facility, Assistant City Administrator Claudia Cappio said Friday.

The plan is expected to include several funding mechanisms that have already been bandied about including a special tax district for infrastructure improvements, the development potential of surrounding land on the 120-acre Coliseum site as well as the city’s capacity to issue tax-exempt bonds, Cappio said.

Couple of things here: Providing tax kickbacks for infrastructure and handing over development rights and tax-exempt bonding capacity is all totally “public money,” and if it’s going to Raiders owner Mark Davis, it would totally be helping build the stadium, even if Oakland didn’t actually write “4 stadium” in the memo field of the check. And for that matter, unless Oakland agrees to give Davis a bunch of public cash, he’s going to reject the plan, because he’s already said he has no intention of using his own profits to do it.

The problem here is the same as it’s been all along: Davis wants a new stadium, but only if somebody else pays for most of it. What might make the most sense for Oakland would be to wait out the current L.A. relocation scramble, where the Raiders seem to be bringing up the rear, and hope that Davis’s demands come down once he has fewer other options. Maybe that’s what they’re doing here, actually — or maybe just sending the NFL a required “Hey, we have a plan, even if Davis doesn’t like it” message in hopes it’ll be enough to forestall a relocation. Or maybe it’s just political butt-covering in case the Raiders leave. Or it can be all three!

As for Tipping Point Sports, it’s Mitchell Ziets, a sports industry consultant best known previously around these parts for providing San Diego with a stadium financing report that amounted to adding up all the public shares for other NFL stadiums and taking the average. So keep your expectations moderate, is all I’m saying.

Chargers, Rams, Raiders to file L.A. relocation papers; everybody act surprised!

San Diego Chargers stadium czar Mark Fabiani says the team plans to file relocation papers for Los Angeles with the NFL, as do the owners of the St. Louis Rams and Oakland Raiders:

“If everything is moving ahead, obviously we’re not going to be standing on the sidelines and watching everything go by,” Fabiani told Dan Sileo on the Mighty 1090 AM. “We’ve got to stay in the game to protect the franchise.”

I mean, of course they are: Filing relocation papers doesn’t commit anybody to actually moving to L.A., it just keeps your options open, or at least as open as the other NFL owners decide to allow them to be. Everything that’s been reported in every city in recent weeks about the L.A. relocation dance has been just a matter of creating leverage, and we can expect to see it continue as the next window for an NFL decision (roughly January-February) grows ever nearer, though the league still has the option to punt everything to 2017. I’d still put my money on that, frankly — there’s still a lot of shaking down of St. Louis, San Diego, and Oakland yet to be done — but I don’t expect anything to get much clearer before the last minute. Until then, we have announcements like this to fill column inches.

Raiders to stay in Oakland two more years, says unsourced, poorly worded tweet

So there’s this:

There are several ways to take this. You could, like Fox Sports, read it that Davis is going to re-up with Oakland immediately because he thinks the Raiders are falling behind the St. Louis Rams and San Diego Chargers in the fight for league approval to move to Los Angeles. Or you could actually read the tweet that Purdy was responding to, and figure that he’s saying a two-year extension in Oakland is Davis’s fallback plan if and when he’s rejected for an L.A. move, which makes a whole lot more sense. (Except that then Purdy really should have said “would” instead of “will,” but sportswriters don’t have copy editors to sort out their verb tenses on Twitter.)

Or you could just look at Purdy’s track record of unsubstantiated predictions and decide to take a prediction based on an unsourced tweet with a large grain of salt. With no real information coming out of the league in recent weeks, the L.A.-move reporting business has gotten deep into speculation and rumor — maybe if DraftKings and FanDuel need a new line of business to stay one step ahead of the feds, they can launch a daily betting game on where these teams will end up.

Texans owner to St. Louis, San Diego, Oakland: Fund stadiums, and make it snappy!

In case anyone in St. Louis is getting too complacent about Gov. Jay Nixon’s plan to cobble together $400 million in public money and give it to Rams owner Stan Kroenke for a new stadium, Houston Texans owner Bob McNair is on the case to tell everyone to hurry it up already!

“That’s what we have to see is the term sheet — you know, what’s the firm commitment,” McNair told the Post-Dispatch during a break between sessions of the owners’ October meeting here. “If they’re going to do something, they need to act.

McNair said he did not know what was holding up the process.

McNair — “a respected NFL owner” according to the St. Louis Post-Dispatch’s report — also brandished the bossy stick at officials in San Diego and Oakland who haven’t snapped to it to meet their teams’ stadium demands:

McNair said the committee hasn’t “seen much in Oakland,” and worried that San Diego is moving too slowly on a public vote regarding stadium financing.

“They’re talking about an election in June. And I think that would be too late,” he said of San Diego. “They could have had one in January, but they’re not ready for that.”

“We hope in the next few weeks,” McNair said, “we’ll have firm commitments from these cities as to what they’ll do and what they won’t do.”

All part of the stadium playbook (see “Two-Minute Warning”), in other words. It’s kind of a new twist having another owner deliver the message instead of the commissioner or one of his henchmen, but maybe Eric Grubman was otherwise occupied.

Rams owner reportedly open to sharing L.A. stadium (if price is right, won’t name price)

With multi-sided game of chicken that is the NFL’s plans to move a team (or two) to Los Angeles going nowhere fast, St. Louis Rams owner Stan Kroenke has reportedly decided to up the ante a bit:

Rams owner Stan Kroenke, intent on playing next season in Los Angeles as he attempts to build a new stadium in Inglewood, has made it clear to the league he is willing to share the facility with another owner from the onset, league sources said.

(Great, thanks for that wording, CBS Sports’ Jason La Canfora. Now I have this stuck in my head.)

As described by La Canfora, this is largely Kroenke trying to win over NFL owners who may be opposing his bid for a stadium in Inglewood because they’d prefer to see two teams move to L.A. (Whether they’d prefer this because they don’t want a single owner hogging all the riches, because they don’t want a single owner being stuck with the nearly $2 billion stadium cost, or just because they want the ensuing game of stadium musical chairs to have maximum number of empty chairs and minimum number of remaining players, it’s tough to say — and may vary owner to owner, even.) Kroenke hasn’t indicated how he’d split revenues and costs with another owner, so we’re still at the very, very early talking stages here — or the talking about talking stages, even.

Regardless, it’s a sign, if La Canfora’s sources are accurate, that Kroenke feels like he has some work to do to win over the NFL on allowing him to move. And, perhaps, that he’s serious about moving to L.A., though we can’t discount the possibility that this whole thing was leaked to turn up the heat on St. Louis. Closed-doors games of chicken are so hard to keep score on.