Stadium spending is bad for humans and other living things, Thursday edition

Happy National Notice That Stadium Subsidies Are A Bad Deal Day, everybody!

  • The Wall Street Journal notices that the soon-to-be-again Los Angeles Rams are set to join the San Francisco 49ers and Golden State Warriors in building new sports venues without much in the way of public money, and declares this a trend, in California, at least. Though the authors then note that the Sacramento Kings got plenty of public cash, and the San Diego Chargers could yet get a bunch from that city, “despite a wealth of academic studies showing that stadiums and arenas are poor investments when it comes to economic development.” I’m not exactly sure what this all is supposed to add up to, but it does provide a nice roundup of the stadium landscape for anyone who’s been living under a rock.
  • The San Gabriel Valley Tribune asks if the new Rams stadium in Inglewood will provide a big economic boost to the region, and cites a couple of economists and the finance director of Foxborough, Massachusetts in answering, “Nah.” In particular, Vanderbilt’s John Vrooman replies: “The net local impact of a professional sports team is zero, if not negative sum, particularly for an NFL team playing in a monolithic space-eating stadium. … The local sports bars will probably rock, but most direct spending at the stadium stays at the stadium. The injection of new cash flow into the local economy is negligible because it’s coming at the expense of local spending someplace else. The indirect spin-offs are also small because most of the spending leaks out of the economy like a sieve and so the urban/regional multipliers are usually zero, zip … nada.” Stan Kroenke’s poor poor people are going to be awfully disappointed.
  • Milwaukee’s Fox6 looks at the “arena district” the Bucks are promising to create around their new taxpayer-subsidized arena, and notes that in Columbus, while restaurants around that city’s new arena indeed did great, restaurants in other parts of town saw business decline: “Other restaurants went out of business and a lot of people started moving out of the neighborhood and into newer apartments,” said Tony Scartz, a restaurateur in the Brewery District across town from the new arena. “And most importantly, for me personally, was the office space vacancy that was created because people moved out of the Brewery District and into the newer office space down around the Arena District.” This is exactly what you’d expect from the substitution effect, as explained in the Fox6 piece by, um, me.

Tune back in tomorrow, when some city official somewhere will tout the massive economic benefits available from building a new sports venue! They will fight eternally…

NFL may have added poison pill to arm-twist Kroenke into okaying Chargers move to L.A.

Multiple insider-type NFL columnists (Mike Florio, Kevin Acee) are reporting that, according to league sources, there’s a poison pill of sorts in the agreement to move the St. Louis Rams to L.A. that could help encourage Stan Kroenke to cut a deal with the San Diego Chargers to play in his new Inglewood stadium: The league has barred Kroenke from starting to sell naming rights, club seats, PSLs and sponsorships until 2017 — unless he brings in a second team before then, at which point he can start selling those immediately.

If true, this is really fiendishly clever of the NFL owners. Without this clause, Kroenke would have almost no incentive to offer a fair deal to shack up with the Chargers, since he’d know he’d have them over a barrel. Instead, he now has a carrot for an early agreement — as does Chargers owner Dean Spanos, who’ll know that the sooner he signs on to Inglewood, the better a lease he’s likely to get from Kroenke.

Spanos now has a big decision to make, because under normal circumstances he’d want to use the Inglewood threat to try to force San Diego into upping its stadium offer, but since that would likely have to wait for a public vote in November, it would eat up all of his leverage with Kroenke. One report that Spanos and Kroenke are already hashing something out was immediately shot down by a Chargers spokesperson, but team execs have otherwise been silent on their plans.

Meanwhile, more of those “league sources” tell Acee that Oakland Raiders owner Mark Davis is interested in maybe moving his team to San Diego — either at a new stadium or a renovated Qualcomm Stadium — and, and … you know, with all these unnamed-source leaks and so many factions still in play, it’s really impossible to know what’s truth and what’s people trying to spin perceptions, so let’s just stop there. Instead, enjoy Rams and Chargers fans telling Deadspin all the ways they’d like to see Kroenke and Spanos die gruesome deaths.

NFL approves Rams move to L.A., lets Chargers reboot stadium demands, tells Raiders to play in traffic

After a long day that dragged well into evening (for East Coasters, at least), the 32 NFL owners finally voted on which teams to approve moving to Los Angeles, and the verdict was: Stan Kroenke has approval to move the St. Louis Rams immediately while building a stadium in Inglewood, while Dean Spanos has until next January to work out a deal to have the San Diego Chargers join them, with Mark Davis getting second dibs on having the Oakland Raiders share digs with the Rams if the Chargers turn it down.

In other words, pretty much exactly what I predicted on Monday. Yay me! (Though with the writing on the wall at that point, it wasn’t that tough of a guess.)

I’ve written up a long analysis of the winners and losers of this decision for Vice Sports, so please go there now if you want the full blow by blow. For here, I’ll just note a few highlights from The Decision: NFL Edition:

  • Man, Stan Kroenke sure wanted to move to L.A., didn’t he? He’s now on the hook for $2.66 billion in stadium construction costs (according to his claims, anyway, but even if it’s only $1.8 billion that’s still a lot), plus $550 million in relocation fees, which even for a guy with a $7.5 billion net worth is a significant chunk of change. He’ll be able to avail himself of the L.A. market for personal seat licenses and naming rights, and $200 million in NFL G-4 money, and about $180 million in sales tax kickbacks, and … and I still don’t see how he’s ever going to make back his investment, given that only one team in football is worth $2 billion more than the Rams were in St. Louis, and that’s the Dallas Cowboys, who are a case unto themselves. Branding his development as some kind of NFL theme park had better be history’s most successful business move ever, that’s all I can say.
  • All y’all who said the NFL would never approve a stadium plan that was mostly private money, they just did. In fact, this is the third stadium in recent years with relatively little in the way of public subsidies, following the San Francisco 49ers and the New York Giants and Jets. I wouldn’t presume to think this is going to be a trend — plenty of teams in smaller and less subsidy-averse markets are still getting money thrown at them — but it does show that in particular circumstances, owner-funded stadiums can and will happen.
  • There are a lot of shoes still to drop. First and foremost, Spanos and Kroenke need to start talking about a lease deal for a shared Inglewood stadium, something that hasn’t even begun to happen, given that 24 hours ago Spanos still insisted he’d never consider such a thing. At that point, a new two-front game of chicken will begin, with Spanos simultaneously playing the “I can just go back to San Diego” card with Kroenke and the “I’m outta here if you don’t cough up a stadium” card with San Diego. Meanwhile, Davis is almost certain to start playing footsie with St. Louis for its now-rejected $477 million stadium subsidy offer — in his post-meeting statements last night, he made a point of talking about “Raider Nation” without breathing the word “Oakland” — though he’s unlikely to pull the trigger on anything until he sees whether the Los Angeles option is entirely closed to him.

That’s it for now — like I said, head over to Vice if you want more. Though one more item that I didn’t get to include in the Vice piece is this jaw-dropper from Kroenke post-decision:

Yep, that’s what it was all about: Think of the children. That’ll be sure to get at least a footnote in the next edition of the stadium-grubbers’ playbook.

[UPDATE: One more twist that hadn’t occurred to me when I filed my Vice story: What happens to PSL holders in St. Louis? Looks like they could try to sue for the right to buy Rams tickets in Los Angeles, which even if it would almost certainly fail, would be frickin’ hilarious.]

NFL reported close to deal on shared Rams-Chargers stadium, Chargers call this a load of hooey

Today and tomorrow are the NFL meetings where owners will vote (or not) on which teams will be allowed to move to Los Angeles, and the Los Angeles Times’s Sam Farmer says there could be a breakthrough in the deadlock:

On the brink of a vote that could return the NFL to Los Angeles, a consensus is building within the league for the St. Louis Rams and San Diego Chargers to share a stadium in Inglewood.

Multiple league officials and owners not involved with the Inglewood project, or the competing proposal in Carson, say there is momentum to pair the two franchises in what one owner describes as a “transformational” project backed by the Rams.

That would be huge indeed, since so far Chargers owner Dean Spanos has expressed no interest in sharing digs with the Rams in Inglewood, while Rams owner Stan Kroenke doesn’t want to go in on the Chargers site in Carson. So if everyone’s on the same page now, that’s exactly the kind of compromise that could lead to

“On December 7, the Chargers made clear in writing that we had zero interest in the Inglewood project, and nothing has changed since then,” Chargers special counsel Mark Fabiani said Monday in a statement to USA TODAY Sports.


There’s still a chance that the Times report indicates that owners are planning to deliver Spanos an ultimatum: Either join the Rams in Inglewood or stay put in San Diego. (Farmer also reports that there’s a growing interest in holding the vote by secret ballot, which would make it easier for Spanos’s friends to vote this way without having to admit to it, though with only 32 people in the room it won’t be too hard to guess who voted how.) Though it’s equally likely that the unnamed owners who spoke with Farmer are just trying to create momentum for their plan by leaking it to the press, rather than reporting honestly on it, and the stalemate is still in place. Won’t know until we hear how the vote goes, really.

This is total speculation and tea-leaf reading, but I’m more and more leaning toward putting my money on what I suggested yesterday, an agreement that’s contingent on a deal being worked out — either “We approve the Rams and Chargers moving if they can work out a shared stadium deal” or “We approve the Rams moving, and the Chargers can too if they agree to share the Rams stadium.” That would kick the hard part — working out an agreement between Kroenke and Spanos not just on where to play but on how to divvy up the costs and revenues of a shared stadium — back to those two guys, and at least leave the rest of the league feeling like they’ve accomplished something this week. Though it would still mean we wouldn’t be sure which teams if any were moving where for several more weeks or months, and could end up leading to some really sad lame-duck seasons in 2016.

Or it could still prove impossible to get 24 votes for any one plan, and nothing could get decided. There’s really no predicting what a roomful of rich guys will do.

NFL calls St.L., SD, Oak plans “inadequate,” but $2.66B Inglewood stadium somehow makes total sense?

NFL commissioner Roger Goodell declared stadium proposals in St. Louis, San Diego, and Oakland to all be “unsatisfactory and inadequate” on Saturday, which is … exactly what you would expect the NFL commissioner to do in this situation, frankly. The guy is facing a vote of owners that needs 24 of 32 people in the room to agree on something, so this way all butts are covered, since any team they want to approve moving to L.A., now they can justify it on the grounds that its current city’s stadium offer was inadequate. Also, now all three cities are on notice that the NFL wants more money, dammit. This is Commissionership 101, and means absolutely squat in terms of who’s going to be approved to move to L.A. or not.

Meanwhile, in news that could be of far greater import:

  • Dallas Cowboys owner Jerry Jones submitted a formal resolution to the NFL that the San Diego Chargers be approved to share a stadium in Inglewood with the St. Louis Rams. Jones is an ally of Rams owner Stan Kroenke, so this is just a formalization of Kroenke’s gambit to offer to share his L.A. digs with the Chargers, something that Chargers owner Dean Spanos has so far rejected. It’s an official proposal now, though, for whatever that’s worth.
  • Rams officials have told the NFL that an Inglewood stadium could now cost as much as $2.66 billion. Let me type that again: $2.66 billion. Add in $550 million in relocation fees, and Kroenke would seemingly be insane to take on these kinds of costs just to move to a bigger market (which doesn’t matter nearly as much in the NFL thanks to the lack of local cable rights). Of course, the Inglewood project includes a whole lot more than a football stadium, so it’s always possible he’s throwing in non-stadium costs in a gambit to get the league to reduce its relocation fee demands, or to force the Chargers to give up more in rent and/or stadium revenue as part of any shared lease, or something like that. (It’s also counting “financing costs,” so there’s a chance he’s doing something like adding up all future interest payments as if they were present value, though more likely he just means the cost of hiring bond lawyers.)
  • The NFL plans to levy a 20% “flip back tax” on any sale of a portion of teams moving to Los Angeles. That could be pricey for the Chargers or Raiders if Disney CEO Robert Iger takes advantage of a clause in his deal to lend his name to those teams’ relocation efforts that lets him buy a share of one of those teams if he likes.
  • San Diego is considering turning its current stadium site into a university campus if the Chargers leave, which, sure, all the kids are doing it.

The upshot of all this is not much, and I’d still put my money on no decision being reached during the NFL meetings that take place tomorrow and Wednesday. Though one possible course of action has occurred to me: The league could approve, say, the Rams and Chargers to move to L.A. provisionally, on the condition that they negotiate a shared stadium deal that’s to both of their liking. That way the owners get to say they decided something, put pressure on Spanos and Kroenke to get a deal done, and keep the pressure on St. Louis and San Diego to up the ante in hopes of heading off losing their teams. It’s certainly what I’d do if I were a self-interested football billionaire, but whether 24 out of 32 people will think that way is anybody’s guess.

Today in peeing-on-NFL-owners’-graves news, St. Louis Rams edition

Nothing much new today on the NFL-to-L.A. front except for everyone on the planet continuing to completely freak out about it, but I did want to take note of two links worth following:

  • Will Leitch, last man standing at my old employer Sports on Earth, has penned a great piece comparing St. Louis Rams owner Stan Kroenke’s scorched-earth approach to getting out of that town to former Browns owner Art Modell’s self-reinvention as the most hated man in Cleveland for moving the team to Baltimore, to the point where a Browns fan was recently arrested for peeing on Modell’s grave. That’s a high bar to match, and I’m not sure the Rams have the kind of tradition in St. Louis that anyone will be inspired to quite that much hatred if they leave, but it’s always nice to give people ideas — so long as Leitch doesn’t end up paralyzed by fear of his own awesome power if it works.
  • I don’t always post links here to when I do radio appearances (Twitter is a better place to keep up with that, if you’re interested), but my visit to St. Louis CBS Sports Radio’s We Are Live last night was too long and too hilarious not to share with you all. Podcast link is here; if I can find a web archived version as well, I’ll add an update.

Rams call St. Louis’ $477m stadium subsidy offer “road to financial ruin,” and other NFL-to-LA news

The latest developments in the ongoing NFL-to-L.A. trainwreck:

Let’s focus in on that Rams relocation application, which has been garnering lots of headlines, albeit not many with quite as memorable an image as Deadspin’s. This, it’s important to remember, is the equivalent of a lawyer’s closing statement: You want to throw every argument you can at the jury to make your case, even if you know the reality isn’t so black and white. So it’s entirely possible that Stan Kroenke doesn’t hate St. Louis quite that strongly in real life, but if he admitted that it’s anything less than a hellhole, he’s risking leaving some other NFL owners with reasonable doubt about his need to move to Inglewood.

But! There is one other factor here, which is that Kroenke chose to release this to the public, rather than just submitting it in secrecy to the league like the owners of the San Diego Chargers and Oakland Raiders did. This seems a pretty clear example of public bridge-burning, and the most concrete evidence we have yet that Kroenke wants to go to L.A. by any means necessary, and at any cost.

If so, the whole L.A. chase starts to fall into a bit clearer focus: Kroenke, for whatever reasons lie deep in his billionaire lizard brain, desperately wants to be the owner of the Los Angeles Rams rather than the St. Louis Rams, even if it means putting down around $1.5 billion for a stadium. (Discounting his infrastructure tax rebates and NFL G-4 money here.) Chargers owner Dean Spanos, not wanting to have to play second fiddle in SoCal for all eternity, jumps in with his own offer. Raiders owner Mark Davis, getting nowhere at anything, happily agrees to jump on board Spanos’s bandwagon. The other NFL owners, sensing an opportunity, decide to demand a crazy-high relocation fee, because you don’t get if you don’t ask, right? At which point it becomes like one of those Cutthroat Kitchen bidding wars where nobody wants to back down for fear of being the one left out in cold, and suddenly you find you’ve just spent $15,000 on a cup of soy sauce.

That’s my leading theory right now, anyway. As to who’ll end up the “winner” and who’ll end up having to build a new stadium in their existing city while wearing a suit of armor, your guess is as good as mine.

NFL sets $550m fee for moving to L.A., hard to tell from press release if they kept a straight face

The owners of the San Diego Chargers, St. Louis Rams, and Oakland Raiders all formally applied to relocate to Los Angeles yesterday, something that got reported on by pretty much every news outlet on the planet. Of course, this is just a formality — even if they get approval, it doesn’t mean they have to move — and something we’ve known for more than two months they were going to do, so calm down, people, okay?

Way more interesting is the report — by “NFL Media Insider” Ian Rapoport on the NFL’s own NFL Network, which is as close to an official leak as you’re likely to get — that the NFL has set its relocation fee at $550 million per team that moves to L.A. That’s in line with what was reported a couple of months ago too, but it was crazy-high even then, considering that this would come on top of having to spend close to $2 billion on stadium construction before selling your first ticket.

I can currently think of at least seven possible reasons why the NFL picked this price point:

  • Los Angeles is such an incredible cash cow for anybody who plays there, despite the NFL not offering the change to cash in on local cable deals and L.A. not being a real hotbed for high-ticket PSL buyers or anything, that the other owners figure this is a reasonable price.
  • None of the competing owners see what’s in it for them if any of these other guys get to move to L.A. — national TV ratings probably won’t budge much if people in L.A. are watching local teams instead of the best national games — so they’re figuring, “Hell, if we’re going to go through all the trouble of figuring out who gets to move, at least we can make sure we get paid.”
  • Nobody really wants anybody to move to L.A., so they’ve set a price so ridiculously high that no one will bite.
  • Somebody realized that the easiest way to determine a winner when three people are fighting for two spots is to see who’s willing to pay the most to bribe the judges.
  • They need extra money to pay off whoever doesn’t get to move to shut him up.
  • They need extra money to help fund a stadium for whoever doesn’t get to move.
  • It won’t really be $550 million, once they invent some special revenue-sharing credit for teams that play within 50 miles of a major tar pit or something.

There are probably more, but I’ll leave those as an exercise for readers. Meantime, I just finished a longer writeup of all the possible outcomes of next week’s NFL owners meetings (including the rapidly rising dark horse candidate “nothing”) for Vice Sports — point your browser there and keep refreshing for the next few hours if you want to hear more from me on this.

[UPDATE: You can quit refreshing now, the article is up here.]

San Diego submits same Chargers stadium plan as six months ago, NFL says thanks for time, we’ll call you

The city of San Diego submitted its Chargers stadium proposal to the NFL yesterday, and — stop me if you’ve heard this one before — it’s just a rehash of where things have stood for a while now, not an actual new bid. The actual 41-page letter can be found here, but it’s the same plan that Mayor Kevin Faulconer proposed back in August:

  • $200 million in cash from the city, to be raised via lease revenue bonds (which San Diego officials say won’t require a public vote), then paid off by the city out of general revenues
  • $150 million in cash from the county (which would require a public vote, which couldn’t take place until June)
  • $362.5 million from the Chargers (who could use naming-rights fees to cover part of this)
  • $187.5 million from PSL sales
  • $200 million from the NFL’s G-4 program

Chargers owner Dean Spanos has repeatedly rejected this plan on the grounds that he doesn’t want to have to wait and see how people vote, but it’s the only plan he’s getting, so. Also, right now all three team owners (Chargers, St. Louis Rams, Oakland Raiders) have shown little interest in their current cities’ stadium plans, so there’s not much to separate them in terms of who should get to move to L.A. because of their unhappy home life.

As for the NFL as an entity, it issued a carefully phrased statement thanking everyone for playing, and offering them a complimentary edition of the home game:

“All three submissions are generally consistent with our most recent discussions with public officials and task forces,” the statementx read. “We appreciate the leadership that public officials have demonstrated on behalf of the three cities. There is a great deal of information for the three teams and all of NFL ownership to review and consider. At this point, no applications for relocation of a franchise have been filed.”

The first NFL owners meeting to discuss this mess and try to come to some sort of consensus — remember, it takes a three-quarters supermajority for the NFL to decide on relocations — is a week from Tuesday. Sadly it will not be televised, because it would blow The Decision out of the water.

St. Louis submits $477m Rams stadium subsidy plan, NFL still isn’t happy

St. Louis submitted its formal Rams stadium proposal to the NFL yesterday, the state-appointed stadium task force sending over a 400-page document outlining what’s currently on the table. That includes:

  • $400 million in city and state cash and tax credits (plus another $77 million in future operating and maintenance costs)
  • $250 million from Rams owner Stan Kroenke (who could pay much of that off with naming rights fees)
  • $300 million from the NFL’s G-4 stadium funding program (which the league insists is capped at $200 million)
  • the remaining $50 million or so from PSL sales (which could also help pay off Kroenke’s share)

It’s not a proposal that the league is particularly happy with thanks to that extra G-4 money, but it’s still an impressive haul, especially compared to the alternatives:

It’s increasingly clear that the NFL’s Los Angeles move threat shakedown plan really isn’t going as the league hoped: Once Kroenke announced plans to move the Rams to Inglewood and the Chargers and Raiders owners immediately countered with their own hastily assembled counterplan to move to Carson, the NFL responded by giving everyone until the end of 2015 to throw money at keeping their teams, hoping that this would help determine a winner. Instead, the league has three different stadium plans that it’s not really happy with, and nothing close to the kind of consensus among owners needed to pick a winner. There’s still a chance of some kind of horse-trading taking place to allow a January vote — I dunno, Kroenke gets to move the Rams to L.A. but has to take the Chargers as a tenant and the Raiders get the St. Louis offer, while relocation fee money is shuffled around to make everyone happy — but I wouldn’t bet on it, which means this whole mess could easily drag on for another season.

This is good news, mind you, for people who don’t want to see the NFL use the L.A. situation to shake down taxpayers for huge amounts of money, though St. Louis still seems likely to end up paying a huge tab for either the Rams or a replacement team eventually. (Blame St. Louis’s idiot negotiators in the ’90s, though their current idiot negotiators certainly deserve a share of the blame.) It’s probably going to mean more painful months ahead for Rams, Chargers, and Raiders fans, though, so if you’re one of those, you might want to pick another team to chain your heart to for a while. I hear Leicester City is fun.