AEG says Kroenke’s Inglewood stadium no good because terrorists could shoot down airplanes from it

In what the Los Angeles Times calls “a bold move to undercut an NFL stadium at Hollywood Park” — “bold” being an adjective usually reserved by journalists for the sort of things done by, say, Vladimir Putin — AEG has attempted to throw a roadblock in the path of St. Louis Rams owner Stan Kroenke’s proposed Inglewood stadium by getting former Secretary of Homeland Security Tom Ridge to write a report that it would be too tempting a terrorist target and should not be built:

In a 14-page report, Ridge suggests that because the Inglewood stadium proposed by St. Louis Rams owner Stan Kroenke would lie within three to four miles of Los Angeles International Airport and beneath the flight path of airliners, terrorists might try to shoot down a plane or crash one into the stadium, scenarios Ridge described as “a terrorist event ‘twofer.’ “

Because when terrorists want to shoot down an airplane, the first thing they do is look for an NFL stadium to launch surface-to-air missiles from. It’s easy to bring those in, so long as you put them in a clear plastic bag.

The Times reports that “it is not known how widely AEG distributed the report,” which the paper got from Ridge’s PR firm. NFL vice-president Eric Grubman effectively dismissed its findings, saying, “We feel that the best approach is to look at these things with an independent eye.”

In addition to giving everyone a good laugh, the AEG report should show what we have to look forward to as three different developers and three different NFL owners all circle around the L.A. market, which is full corporate titan smackdown action. Recall that when the owners of Madison Square Garden faced off with the New York Jets owners over a proposed Manhattan stadium, it culminated in a giant ad war, so one can only hope that this will have as entertaining a denouement.

Back nearer to planet Earth, meanwhile, the Oakland Raiders are reportedly looking for a smaller, 55,000-seat stadium in Oakland, which would be more in line with the NFL’s new marketing reality, not to mention with what Raiders owner Mark Davis said two years ago, than an 80,000-seat behemoth in Carson. Not that anybody, including Davis, is proposing how to build such a thing, but it’s a way to get another Raiders stadium story into the paper, so hey, do what you gotta do.

And speaking of getting stadium stories into the paper, consummate NFL insider Peter King has an article at SI.com theorizing that since Kroenke seems to be “the most determined owner to want to move to Los Angeles” (though he hasn’t actually said anything about moving, and has only partnered with a development company in Inglewood on a stadium with unspecified funding) and St. Louis has the most advanced stadium plan (though it has its own problems with mystery funding), maybe the Rams will move to L.A. and then the San Diego Chargers will move in with them and the Raiders will move to a new stadium in St. Louis?

Even King calls this “a virtual sports-talk-show bit of guesswork by me,” but that doesn’t stop him from putting it in print. (And in a pull quote.) Nor does it stop him from writing his entire column with only two people quoted: Grubman and St. Louis stadium plan chief David Peacock, neither of whom say anything other than what you’d expect them to say. (Grubman talks about L.A. having “real momentum,” Peacock says “if we do our job, I can’t imagine 24 votes to approve the Rams moving.”) And now I just wrote almost two paragraphs about this piece of wild speculation, so maybe I’m no better than the rest of them — though at least I reserved the headline for the far more entertaining piece of wild speculation. That’s the defense I’m going with, anyway.

Crunching the Inglewood numbers: Rams stadium would bring new revenues, but getting to $1.86B is tough

The Los Angeles Times’ Tim Logan, who has been doing excellent work on St. Louis Rams owner Stan Kroenke’s Inglewood stadium plan (and I don’t just say that because he usually seems to interview me), had a long story yesterday headlined “Stadium economics: How building a venue in Inglewood makes financial sense.” So how does it make sense, exactly?

  • Sports economist Rod Fort says it’s a good deal for Kroenke if he can make enough money on the associated non-stadium development: “It’s more like a real estate development than a stadium.”
  • Sports economist John Vrooman says the Rams could bring in an extra $100 million a year in “sponsorships, marketing and premium seating” in L.A. as compared to St. Louis, calling a move “an economic no-brainer.”
  • Sports economist Victor Matheson says Kroenke could rent out and Inglewood stadium for concerts and the like, but “there’s just not that many 60,000-plus person events.”
  • I call spending $1.86 billion just to get uncertain revenues “a huge, huge risk.”

Fort’s and Vrooman’s points are the most viable arguments for a privately funded Inglewood stadium making sense for Kroenke, so let’s take them one at a time. First off, the real estate development at Hollywood Park might well bring in enough revenue to make a stadium-plus-development deal turn a profit — but then, why saddle it with a potentially money-losing stadium when the rest of the development was already approved and ready to go? Kroenke had to pay his development partners (no one knows how much) to buy into the bigger plan, and it doesn’t make sense that they’d voluntarily give him a lot more in revenues than he’s paying them to buy in, since a stadium doesn’t especially help them any.

As for the extra $100 million a year from being in Los Angeles, that is the big question: Precisely how much value does the L.A. market have to an NFL owner? We’ve heard that number before, on the San Francisco 49ers‘ move to Santa Clara, but we’ll have to wait till the new Forbes numbers come out this summer to see if they agree. We can use the Forbes numbers another way, though, to see how reasonable this is: What are the Rams revenues right now, and what would adding $100 million a year mean?

According to Forbes, the Rams were dead last in the NFL in revenue in 2013, at $250 million. (Being dead last in the NFL in revenue is still a pretty lucrative gig.) Adding $100 million would mean they’d have to jump to 5th in the league in revenue, behind only the Dallas Cowboys, New England Patriots, Washington Unmentionables, and New York Giants. That’s conceivable, I suppose, but I’d still call it a huge risk, even if maybe the Forbes figures might make me willing to lop off one “huge.”

And then, would even $100 million a year be enough to make a $1.86 billion stadium a good investment? Kroenke could presumably knock off some of that price tag with PSL sales (figure $300-400 million), naming rights (about $200 million in present value), and possibly NFL G-4 money ($200 million max). That leaves only a little over a billion dollars to pay off, which $100 million a year would cover, but without much left over for a return on investment. At best, then, Kroenke would be putting up more than a billion dollars out of pocket, plus whatever he’s spending on stadium land and a share of the associated development, for a return that he could get by putting his money in a decent stock index fund. (Okay, and increasing the value of his asset, which admittedly could come to a bunch — the Giants are worth about a billion dollars more than the Rams right now, according to Forbes, though the Giants also aren’t saddled with $1.86 billion in stadium debt.) And if there’s any significant relocation fee required by the NFL, then forget it.

Add it all up, and I would just suggest that the Times’ headline writers should have made one tense change: “How building a stadium in Inglewood could make economic sense.” We’re talking hypotheticals here, and everything would have to go Kroenke’s way for a $1.86 billion stadium to pay off for him. Or to put it another way: It’s a huge, huge risk.

Inglewood approves stadium plan with no public vote, as construction cost nears record $1.9B

The Inglewood city council voted unanimously yesterday to approve an NFL stadium near the old Hollywood Park racetrack site, bypassing both the usual environmental review and the public referendum that would normally be required to bypass the environmental review. The project, spearheaded by St. Louis Rams owner Stan Kroenke, can now move ahead just as soon as—

An economic impact report commissioned by the city estimated the privately funded stadium with open-air sides and a clear retractable roof could be the most expensive in U.S. sports history: $1.86 billion.

Okay, so to paraphrase things Everett Dirksen never said, this Inglewood project is starting to get into some real money. I’m already on record as being skeptical of Kroenke being able to make an Inglewood stadium pencil out when we were talking about $1.5 billion; at $1.86 billion, which is more than half a billion more than the 49ers spent on their stadium in Santa Clara without needing to worry about any NFL relocation fees, it seems like madness. (Or leverage to extract more money from St. Louis.) But I guess we’re one step closer to finding out whether Kroenke is super-smart, super-crazy, or super-smart about appearing to be super-crazy.

There is still one other possible way the Inglewood stadium, even if it doesn’t collapse of its own weight could be blocked, which is that a petition drive could be launched for a referendum to block the deal from going through without a referendum. No word yet of anyone launching such a campaign, but I’m sure someone will do so eventually, because California.

Moving railroads for Rams would add $25m to stadium’s $900m price tag

Missouri Gov. Jay Nixon announced his deal to move rail lines to make way for a new St. Louis Rams stadium yesterday as expected, and the cost is expected to be about $25 million. It’s unclear as yet whether the private railroad and electric utilities would get reimbursed by the state for these costs — if so, then add that to the $405 million in new bonds and state tax credits that Nixon has already proposed, and we’d be talking about a $430 million public price tag for a new $900 million Rams stadium. Assuming there aren’t any more hidden costs still to come, because we know what can happen.

Nixon said a couple of other things in his press conference, meanwhile, that are worth of note:

“If we do nothing, people will stand here 10 years from now and it will look exactly like it looks like right [now],” Nixon said, referring to the area where the new stadium would stand. “This is our chance to transform a blighted area that would remain blighted if not for the construction.”

Politicians endorsing development projects always say this, but seriously, how does he know? There’s already been some redevelopment in the “blighted” riverfront area, so it’s always possible there would be more; not to mention that history shows that when historic buildings are saved from the wrecking ball, redevelopment can happen in the most unexpected ways.

“The state would also lose approximately $10 million in state income taxes paid by NFL players each and every year. For every game they play here, NFL players pay taxes on their income, both the home team and the visitors.

 

“Last year when the Rams shut out the Raiders and the Redskins, those teams may not have put points on the board, but they did put something in the state coffers.”

Oy, this again. Yes, NFL players pay state taxes, but as with Wisconsin Gov. Scott Walker’s proposed “jock tax,” at least some of that money would flow into state coffers anyway as fans spent their football dollars on something else. Not to mention that Nixon cleverly overlooks that even $10 million a year in state income taxes wouldn’t come close to paying off the $24 million a year that Missouri would be sinking into the new stadium — even before paying for $55 million in state tax breaks (or $25 million to move the railroad tracks, if that ends up being public).

In short: How can you tell when an elected official isn’t telling the truth? You know the punchline.

Missouri gov to announce railroad deal for Rams stadium land; NFL gives relocation committee new schmancy name

Buncha news, or “news,” today in the are-the-St.-Louis-Rams-moving-to-Los-Angeles saga:

  • Missouri Gov. Jay Nixon is expected to announce today that he’s reached agreement with local railroads to relocate tracks to make way for a new football stadium. (“We have yet to come up with anything that looks like a fatal flaw,” said Nixon, less than reassuringly.) It’s not immediately clear whether this is included in the original $900 million cost estimate for the stadium, but maybe the governor will spell that out in his announcement later today.
  • The NFL has officially formed a Committee on Los Angeles Opportunities consisting of … the same owners who were already serving as an L.A. relocation committee: the New England Patriots‘ Robert Kraft, the Kansas City Chiefs‘ Clark Hunt, the Pittsburgh Steelers‘ Art Rooney, the New York Giants‘ John Mara, the Carolina Panthers‘ Jerry Richardson, and the Houston Texans‘ Bob McNair. The league also sent a memo to teams reminding them that a three-quarters vote of owners is required before the league will give the thumbs up on any relocations.

I guess we’re going to be treated to dribs and drabs of information like this for the next few weeks or months, since journalists in multiple major cities have been scrambled to cover this story. For any of them reading this, all I ask is that occasionally you try to take a break from the scoop of the moment (they’re issuing new press releases!) to actually investigate the logistics of these multiple stadium plans, and how they’d be paid for. I am sympathetic to your time crunch, believe you I am, but there’s important work to be done here, and reduced resources or not, you’re still the ones best equipped to do it.

Inglewood council could vote to approve NFL stadium without public vote or environmental impact review

So it turns out that not only are Stan Kroenke and his fellow Inglewood stadium project developers trying to use a voter initiative to get around environmental impact laws, but the Inglewood city council can if it wants just vote to evade holding an initiative, too. No, seriously, I didn’t believe it either, but listen to the Los Angeles Times:

The Inglewood City Council, under initiative law, could bypass an election entirely and simply adopt the measure itself. City Council members would not discuss their intentions. They either did not return calls seeking comment or referred questions to Mayor James T. Butts Jr., a strong supporter of the stadium.

“I’m not prepared to make a commitment as to what way we are going to go,” he said…

The Inglewood council would be on solid legal ground if it decides not to call an election. The California Supreme Court in August ruled that the City Council in Sonora could bypass the environmental review for a planned Wal-Mart store without a vote of the public.

So California has some of the strictest environmental impact requirements on the books, but the populace can vote to skip that step, and city councils can vote to skip the whole “populace voting” part. That makes complete sense.

The project’s developers say they want an NFL stadium ready by the 2018 season, so you can see why they’d rather not wait for this whole “studying it to see if it would be an environmental disaster” thing to play out. It’s still probably unlikely that the council would skip going before voters, especially since the initiative campaign has already been started and it would look just terrible to say “Nah, we’ll just vote for you” now, but stranger things have happened.

And speaking of stranger things, Kroenke has actually spoken with St. Louis stadium czar Dave Peacock! No, he didn’t answer his phone or anything, but they did run into each other at the Super Bowl and talk for 20 minutes. “Stan was encouraging and appreciative, and really couldn’t have been nicer,” the Sporting News quoted Peacock as saying afterwards, which doesn’t really mean anything, but then, nothing anybody has said in this whole game of chicken has really meant anything. At some point, Kroenke, Peacock, the Inglewood developers, and city officials in both Inglewood and St. Louis are going to have to put their money where their mouths are, but that’s still a ways off yet. Until then, we get to follow this like it’s a Hollywood love triangle, which is probably more entertaining anyway, if not necessarily more informative.

Inglewood to hold public vote on NFL stadium this summer so Kroenke can evade environmental review

Citizens for Revitalizing the City of Champions — I swear, that is honest to god the name that St. Louis Rams owner Stan Kroenke and his development partners came up with for their astroturf citizens’ group to push for a new stadium in Inglewood, California — has delivered 20,000 petition signatures to put a vote on the ballot this summer to approve their development plan. That’s more than double what they needed, and nearly 20% of the entire city population, which bodes well for getting this thing actually passed.

As the L.A. Times’ Tim Logan explains it, approving the plan through a voter initiative “would avoid the need for time-consuming, costly and potentially legally-risky environmental review,” which would be required by the normal planning process. The exact finances of the plan are still a bit hazy — as you may recall, Kroenke is seeking tax kickbacks that could be worth anywhere between a few tens of millions of dollars and $180 million — but hopefully this will all be explained before the vote. Though not that that’s required or anything.

Meanwhile, Missouri Gov. Jay Nixon freaking out lawmakers in his state by asserting that he can sell stadium bonds without consulting them if he wants to. Not that he wants to:

At a state House budget hearing, Doug Nelson, Office of Administration commissioner, said a law passed more than 20 years ago allows the Nixon administration to issue such bonds. The law states that Missouri or any agency or department of the state can enter into a contract, agreement or lease to finance or develop a convention or sports facility.

“This is not an indication of what we’re going to do,” Nelson said. “This is an indication that we believe we have that authority.”

State Sen. Rob Schaaf immediately introduced a bill to say the governor does too have to ask the legislature’s permission before going and building a stadium. Today is truly a great day for democracy.

NFL stadium chair says Rams don’t go anywhere until he says they do

The NFL may want St. Louis to think that it needs to cough up a pile of stadium money to have a shot at keeping the Rams, but that doesn’t mean the league — or at least, everyone in the league — is ready to let the team move, either. Here’s Pittsburgh Steelers owner and NFL stadium committee chair Art Rooney on Friday, explaining that any attempt to move the Rams will have to go through him:

“There are still cards to be played,” Rooney told The [Los Angeles] Times in his first public comments since Kroenke unveiled his vision for a state-of-the-art stadium on the Hollywood Park site. “There’s still a process that has to work its way out, and we don’t know what the outcome’s going to be yet. That’s why we have league committees and approval processes.”

Rooney’s words were measured but his message was clear that the NFL is going to make the decisions on stadiums and relocation.

“I think we’re comfortable that we could stop a team legally from moving if it didn’t go through the process,” Rooney said.

There’s nothing actually contradictory here: The NFL (or at least Rooney) wants to assert its power to decide who plays where, especially after Dallas Cowboys owner Jerry Jones last week implied that Rams owner Stan Kroenke could pick up and go to L.A. without league approval if he wanted to. Plus, there does seem to be a message to NFL owners here: We’ll do the best we can to shake down cities for stadium subsidies, but if we succeed, you need to take the cash and stay put, or else nobody’s going to believe us anymore when we say we can deliver the goods.

That’s how it reads currently, anyway. It’s also always possible that the NFL league office, Rooney, Jones, and the other 30 NFL owners are each all angling to prop up their own specific interests, and the notion of “what the NFL wants” is a mere illusion. Just because they’re a billionaires’ club, after all, doesn’t mean that they can manage their affairs any better than any other group of people thrown together by circumstance.

NFL says Rams not moving, but also not staying without new stadium, so snap to it, mister

The NFL has finally spoken about the St. Louis Rams stadium situation, and by “the NFL” I mean designated stadium grubber Eric Grubman, and by “spoken” I mean “issued ultimatums that without a new stadium, the Rams will move somewhere else, though the league doesn’t plan on them moving, because they expect to get a new stadium, capisce?

League officials are not considering such a move [of the Rams to Los Angeles], Grubman said.

“We’re looking for a solution to the St. Louis Rams to be the St. Louis Rams, not for some other team to be the St. Louis Rams,” he said.

Is a stadium necessary for that solution?

“Yes,” Grubman said.

And a stadium, Grubman made clear, means a fully signed, sealed, and delivered stadium, not just a plan for one:

The NFL’s role, he said, is to help give the St. Louis effort “the best chance possible.”

The north riverfront proposal, he said, isn’t yet real.

“A real plan means that the steps are all actionable,” he said. “If you need authorities, you’ve assembled those authorities. If you need land, you’ve assembled that land.” …

“I don’t want to put any lines in the sand,” he said. “… But what we’ve talked about is we really ought to be assembling this plan this calendar year. Which doesn’t mean Dec. 31.”

So the NFL is clear: Unless a St. Louis stadium is approved this year, and not late this year, but not that there’s a firm deadline or anything, then the Rams are totally moving somewhere, but the league isn’t thinking about that. Yet.

Once again, this is a non-threat threat that it’s impossible to know whether to take seriously, because Grubman would be saying the exact same thing in each of several scenarios:

  1. Rams owner Stan Kroenke wants to go to L.A., the league doesn’t want him to, and Grubman has been sent out to shake loose a St. Louis stadium offer that Kroenke can’t refuse so that both sides can go away happy.
  2. Kroenke wants to go to L.A. and the league is fine with it, but Grubman has been sent to shake loose a St. Louis stadium because more options are always good, if only to turn up the heat on Inglewood voters to stop asking questions about the stadium plan there and just approve it in a referendum already.
  3. Kroenke’s Inglewood stadium plan is a bluff, and Grubman is trying to make it an effective bluff by telling St. Louis, “We’ll pull the trigger, don’t test us.”

Each of these is completely plausible, given what we know now. The only way to tell which is true will be if Missouri officials (or voters) reject stadium deal, and we’ll see whether Kroenke and Grubman really shoot the dog, or slink back to St. Louis with their tail between their legs, as we’ve seen happen before.

St. Louis business leaders once offered to buy into Patriots just to curry favor with NFL for expansion team

With the St. Louis business and political leadership seemingly eager to spend whatever public money it takes to keep the Rams, FoS convention center correspondent Heywood Sanders sends along an expanded excerpt from his book Convention Center Follies outlining how these forces were so desperate for an NFL franchise the last time around that they offered to buy part of the New England Patriots just in the hopes that it would make the NFL happy enough to maybe give them an expansion team:

Charles Knight of Emerson Electric told his Civic Progress colleagues in late March, with the loss of the Cardinals inescapable, that he “had devoted a tremendous amount of effort, as a representative of Civic Progress, in trying to line up a professional football team franchise for St. Louis.” Knight went on, “we do not have a football team and we do not have a consensus among our political leaders regarding the construction of a new stadium.” For Knight, the continuing conflict between St. Louis County Executive Gene McNary and Mayor Schoemehl over a downtown versus suburban location for a stadium was a principal reason for the failure to keep the Cardinals. Absent some form of agreement between the two, and a fiscal commitment from the state government, there was little likelihood of actually building a new stadium. And a brand new stadium was the basic requirement for getting a new NFL team.

Charles Knight told the group, “The inability to get even a verbal commitment regarding the proposed new stadium from the political leadership made it impossible to take advantage of an opportunity to acquire part ownership of the New England Patriots for a period of up to three years—not to move the Patriots here but to relieve the NFL of the cost of having to subsidize the team’s inept present owners and, in return, to ensure a franchise for St. Louis when the League decides to expand.​”

Now that’s dedication to a cause. Or stupidity. Or both.