With less than two weeks to go before the NFL’s deadline for cities to put up stadium plans to keep their teams from moving to L.A. or else … something, something bad … the league’s internal squabbles over the whole process are increasingly being aired in public:
- Houston Texans owner Bob McNair declared that one key factor in deciding what teams if any will move is “support” from their existing city: “If they’re receiving a reasonable amount of support, my personal feeling and most owners’ is we don’t think people should move.” And to make that even clearer, he added that St. Louis’s stadium plan for the Rams is “getting pretty close, in my opinion, to being an attractive proposal,” and “if they do come up with an attractive proposal, then in my view, my personal opinion, I don’t think the Rams will receive the approval to relocate.”
- To make things even clearer, McNair canceled a planned meeting with San Diego Mayor Kevin Faulconer about that city’s stadium plans.
- Meanwhile, it’s turned out that Disney CEO Bob Iger was recruited to get involved with the San Diego Chargers‘ and Oakland Raiders‘ Carson stadium project by Carolina Panthers owner Jerry Richardson, who sits on the NFL’s L.A. relocation committee along with McNair.
So the writing is on the wall: Once St. Louis approves its $477 million in stadium subsidies later today, the Rams will be told to stay put, and the Chargers and Raiders will move to Carson, right? Except that McNair and Richardson are only two owners out of 32, and any relocation decision needs 24 votes for approval. While none of us have Steve Tisch’s psychic powers, I’d say that “no decision in January” is looking like a more and more likely outcome.
Goodell also sent St Louis a letter telling them they are f*cking high if they think the NFL is going to pony up $300m.
http://www.stltoday.com/news/local/govt-and-politics/goodell-million-for-st-louis-stadium-fundamentally-inconsistent-with-nfl/article_1c529334-4e3f-5885-9f68-156184f56ad8.html
Neil, Why do you think the NFL will vote against the Chargers and Raiders move to Carson?
There’s no reason to postpone the decision, they could give Oakland and San Diego another 10 years and neither city will come up with a viable stadium solution. I think it will be over as soon as St. Louis approves their funding today.
It’s been clear to me that the Carson proposal is the only real stadium plan ever since I read both of the approved initiatives. You have to read the initiatives.
I think Stan Kroenke has more than seven friends.
But what amount must they pay? It’s ridiculous to say that ANY offer must be accepted, so who decides if the St. Louis offer is good enough? Grubman’s stance on the proposal is pretty clear to anyone willing to listen (or anyone still not believing that this is all leverage and that Kroenke will build a Wal-Mart in Inglewood. By the way, nothing helps retail stores and night clubs succeed like sharing a parking lot with a Super Wal-Mart
Many like to talk about precedent, saying that if the St. Louis offer is rejected then it will set a bad precedent going forward, that other cities will make no offers whatsoever because why bother — they didn’t take St. Louis’ offer so why will they take ours? But it seems more likely that if the St. Louis offer is rejected it will set the precedent that any other city’s offer had better be better than St. Louis’ or they will suffer the same fate.
That’s ignoring the other more important precedent that a city can not meet its contractual terms, lose in arbitration over the subsequent dispute, and then still force the team to stay by making its own new agreement without any input from the team owner. However biased one may be it would be tough to imagine the other owners allowing THAT particular precedent to be set.
Ironic that one of the wealthiest owners, Kroenke, is getting substantial financial support from his city whereas the least wealthiest, Davis, is getting none from his city. In the end, what difference does it make to McNair if the Rams leave or stay in St. Louis?
Don’t forget that as of today Stan Kroenke has asked for exactly $0 from the city of St. Louis for a new stadium – that boat sailed a long time ago and the circumstances now are completely different.
You’d think Neil would be hailing Kroenke as a hero, an owner building his own stadium seems like Neil’s end game, fixing the system by removing public money for stadiums should be the entire point of this blog and his book. And yet we get conflicting messages:
Taking public money = BAD OWNERS! STOP DOING THIS!
Not taking public money = ONLY A FOOL WOULD BUILD HIS OWN STADIUM BECAUSE THEY AREN’T PROFITABLE! TAKE THE PUBLIC MONEY!
Is the idea that stadiums aren’t profitable and the idea that stadiums aren’t profitable for the taxpayers the least bit at odds? I’d say they are consistent. I believe Neil (though it might have been someone else) has postulated without public things would resemble European soccer stadiums which are constructed from time to time but far less frequently than here.
Dean: While I think Kroenke is probably using a negotiating tactic, as a thought exercise I’ve wondered, why don’t David and Kroenke just swap teams? Forbes values the two teams about equal in value and there is some precedent in the Irsay-Rosenbloom swap of the Rams and Colts respectively in the 70s. Davis could own the Rams and get the stadium he can’t afford himself, and Kroenke would get a franchise with, per Facebook, the bigger following in the LA area which could play in Inglewood. Win-win.
Now, of course, this assumes Kroenke actually wants to build a private stadium, which I don’t believe, and also it’s worth remembering that the last swap made neither owner terribly happy which is why the Baltimore Colts and LA Rams don’t exist these days. However, if you wanted a logical solution that fits the things everyone says they want, that might do it.
“… they could give Oakland and San Diego another 10 years and neither city will come up with a viable stadium solution…”
That may be true (depending on your definition of ‘viable’, just like in St. Louis). However, there is no reason for the NFL not to continue to force St. Louis to bid against itself in future, upping the ante for no reason other than that they can.
The notion that St. Louis has “outbid” other cities for it’s own team does not take into account the fact that no other city has tendered any sort of bid. The option in LA is one entirely of Kroenke’s own making and includes effectively no municipal or state dollars for the stadium.
I’m in the group that believes he “just wants to be in LA” and that this is not solely a negotiating tactic with Stl. But the question is, as ever, does he want to be in LA enough to turn down the offer in Stl? And if so, is he financially better off in LA or Stl under those circumstances?
Dean: I think it matters to McNair only in the sense that extracting maximum taxpayer funding is the goal of all owners in all markets. What he (and all other owners) would really like is for LA to join the bidding war. Or San Antonio, or Reno, or Pensacola… anybody really. It doesn’t matter if the league would consider any of those locations or not, all that matters is that there is another bidder… which there isn’t at present. So far, St. Louis has bid about half a billion dollars more than the next guy… which is pretty good work by the NFL bag men, but that doesn’t mean they can’t do better.
Time will tell if McNair’s “candidness” was accidental or a deliberate act meant to pressure one party or another. But if there’s one thing all NFL owners agree on, it’s that they shouldn’t have to pay for their stadium construction and shouldn’t have to pay operating costs or property taxes either. Or upgrades. Or game day policing in some cases. Ok, so there’s lots of things NFL owners agree on, as it turns out.
I think it’s just a matter of time until owners start shaking down fans as they leave the stadium…. “donate here to re-sign Smith”. “Can you help us keep our offensive line on the payroll? Leave your wallet at the collection area outside the stadium operations office and we’ll put your name on the founder’s wall” (in really tiny print, but hey).
” And thank you.
You’re the greatest fans in all of sports, just like all the others”.
John: I don’t disagree with anything you say, but I think the outcome may be even more unpredictable than that, if only because right now we have 32 owners all acting on their own motivations, and with their own allegiances. Is somebody going to be thinking, “Just take the St. Louis money already and let the Chargers and the Raiders have L.A.”? Sure! Is somebody else thinking, “No, we can get more out of St. Louis, if not now then later when they want a new team”? Absolutely! Is yet another person thinking, “I don’t give a crap, so long as Mark Davis doesn’t come out of this happy”? Totally! We’re so deep into this now, I suspect whatever happens, it won’t be for any particularly good reason, not even cold self-interest.
As for praising Kroenke, if you break your lease 10 years early via a loophole and try to skip town, then only passively let people in your old city try to throw money at you instead of outright demanding it, this is being a good guy? Maybe everyone’s been watching too much “Jessica Jones,” but that seems like a pretty low bar for heroism.
Jake
Grubman’s “stance” was nothing but a negotiating tactic and it was successful. He complained about the public claiming ownership of naming right’s revenue and the STL task force caved. Then Grubman called Bernie’s radio show last week and complained about the ticket tax and again St. Louis caved. St. Louis gave away everything and are only charging $1.5 million a year in rent compared to the over $10 million the Vikings will pay.
The retail center and Walmart will be built instead of a stadium, there isn’t room for both. The rest of the development is already dedicated to condos, apartments, a business park, and a casino. Read Inglewood’s initiative, all of your misconceptions are answered in the document..
St. Louis met it’s contractual terms. That’s another document that you need to read and understand each side’s options under the contract. Demoff has had input with the task force throughout this process and Kroenke & Demoff met with HOK to give input on the Riverfront design.
This is a better offer than the Vikings deal. I think St. Louis and MO are bat crap crazy, I wouldn’t support the project if I was a voter but I have the background to analyze the financing and it’s the best deal right now from the NFL’s perspective since Indianapolis’ horrible giveaway. I don’t see any possible way that at least 8 other owners will side with Stan.
John and Jake, Kroenke’s not doing “this” on his own. Stan, through HPLC, gets open-ended tax rebates on the project worth $100s of millions even if he doesn’t build a stadium. That kickback was added to the existing project in the so called “stadium” initiative Inglewood approved back in February.
Stockbridge was not going to get that money before they partnered with Stan and he added his 60 acres to the project, the terms of the original development deal were already approved. Inglewood gave away those funds without any commitment from Stan. The alternative to a stadium, a “retail center” with a “large-format retail discount store < 100,000 square feet" (a Walmart), was also included in the approved initiative. Inglewood spent years fighting against a Walmart in their neighborhood and they gave up that victory for nothing.
A real stadium initiative's first order of business is to get a public entity, usually a stadium authority, to own the stadium because it saves the team $100s of millions in taxes. Stan's initiative doesn't bother, instead it focuses on tax rebates that don't require a stadium and what will be built instead of a stadium. People have to read the approved initiative if they want to understand what's going on in Inglewood, it really is that simple. Don't take my word for it, read it.
Ben, you keep saying “read it” — since you say you’ve read it, why don’t you actually point out the sections that say what you say they do?
As I noted in another thread, from what I can tell, the Inglewood agreement actually rules out superstores over 80,000 square feet, which would make for a smallish Walmart. The tax breaks, meanwhile, aren’t completely unlimited — any tax receipts (counting property taxes, parking taxes, ticket taxes, and a bunch of others) over $25m a year get reimbursed to the team to cover “public roads and infrastructure, park construction and maintenance, as well as event day public safety costs of retaining City police, EMT, and other services and operating public shuttles from off-site public parking lots.” That’s potentially lucrative, but depending on what they get to call “infrastructure,” not necessarily a huge benefit on a $1.8b project.
Here’s the link again to the agreement, which is huge, but searchable so it’s not too tough to find the important bits. Ben, if you can find sections that support your arguments, I’d love to see them:
http://championsinitiative.com/wp-content/uploads/2015/01/Full-Text-City-of-Champions-Revitalization-Initiative.pdf
“And yet we get conflicting messages:
Taking public money = BAD OWNERS! STOP DOING THIS!
Not taking public money = ONLY A FOOL WOULD BUILD HIS OWN STADIUM BECAUSE THEY AREN’T PROFITABLE! TAKE THE PUBLIC MONEY!”
No, the messages are:
Giving stadium subsidies = bad cities, counties, states. Stop.
Not taking public money = it’s unreasonable to expect owners to not take what is being offered to them.
No conflict there.
We’re getting the cognac and cigars ready for another victory celebration. What more can I say?
How about this: I love the smell of public stadium cash in the morning, baby!
Neil. And let us not forget that Inglewood has to approve plans for a Walmart which is something voters there rejected eleven years ago.
The 2004 vote just denied Walmart the right to get around zoning regulations:
http://money.cnn.com/2004/04/07/news/fortune500/walmart_inglewood/
It looks like the new rezoning for the Hollywood Park site would allow a Walmart up to 80,000 square feet as-of-right, or whatever they call it in California.
ben. You keep insisting the Carson plan is the only real stadium proposal. However, all that exists are Goldman Sachs promise to sell the bonds and entitlements from a small cash poor city. What makes it a financially viable project?
Neil. Should the Rams stadium not come to fruition, do you believe Inglewood officials will want to cooperate with Kroenke and allow a Walmart? The 2004 vote was premised on the zoning regulations. However, it was quite apparent the public didn’t want a Walmart store.
I think they already did, provided it’s under 80k square feet.
There us much more involved when providing entitlements for a retail store. Zoning is just one issue. If Inglewood officials are upset about the stadium, they can make the planning process for a Walmart very difficult.
Neil, you are mistaken
The initiative allows for “large-format retail discount stores < 100,000 square feet". That rules out the average 182,000 square foot Supercenter but a Walmart Discount Store and a Walmart Neighborhood Market can both be part of a giant retail center.
http://corporate.walmart.com/our-story/our-business
The tax reimbursements cover much more than just standard infrastructure and the claims process completely favors HPLC. You have to read it.
I'm not going to pick apart the initiative because you or anyone else wont read it. Almost half of the document consists of maps, it's an easy read. You challenged me in another thread to back up my claims and I did with links on every point and all I got were responses with no facts and no links. Someone wanted to use a PSL sales figure from 1999 as a comparison to what the Raiders and Chargers can expect from fans in 2017 and 2018. That's ridiculous.
I don't think your answer that you "think Stan Kroenke has more than seven friends" is a serious response to my question. I've provided much information than I'm getting back.
Here’s the Vikings rent compared to the St. Louis $1.5 million figure.
“the Vikings have committed to contribute $8.5 million for operating expenses (rent), $1.5 million for capital improvements, and approximately $3.0-$4.5 million for game day expenses, a total of $13.0-$14.5 million”
http://www.vikings.com/stadium/new-stadium/faq.html
The PV of the rent premium makes this latest St. Louis offer about $100 million better than the Vikings deal. I think the owners have to approve Carson, maybe Kroenke threatens STL with London if he wants to squeeze even more out of them. St. Louis and Missouri haven’t stood up to Stan yet, none of what’s happened leads me to believe the threat has to be realistic. We will see in 3 and a half weeks.
Ben: Your interest seems more targetted to the fate of the “Inglewood” property than toward the subject under discussion here (the St. Louis Rams, wherever they end up). There is certainly nothing wrong with that, but you should not be surprised that those of us more interested in the topic at hand don’t share that narrow interest.
There is MUCH more at play here than the fate of a parcel of property in Inglewood. Your analysis of a single agreement/initiative may or may not be correct. However, focusing on one possible use of that property borders on the irrational. I’ve no doubt that Mr. Kroenke has alternate plans for that parcel if his primary goal (whatever that may be) fails. I’m sure he has a third and fourth backup plan if neither a stadium or gigantic shopping centre can be built. No doubt somewhere down the list is selling the property undeveloped for more money than he paid for it.
Successful business owners always have multiple fall back positions. It is important for their lawyers to have a keen understanding of the excruciating minutae of these agreements, even the ones that the principal as no intention of ever exploiting. That said, many of those alternate avenues will not be pursued and some may never have been intended as anything but a diversion from the real goal.
The fact that the initiative favours some types of development over others is hardly surprising. But that is not the biggest factor at play here.
No-one should forget that the primary goal in Kroenke “talking” about LA is to extract greater subsidy from St. Louis. I imagine he’d be fine with moving his franchise (back) to LA, or with building a gigantic shopping centre there if that doesn’t work. Or perhaps his primary interest is in the shopping centre. We can’t know. It is likely that many of the people who work for him on these projects don’t really know either.
But job #1 was to get St. Louis bidding against itself to “save” his franchise from his possible decision to relocate it.
Mission accomplished, right Piggy?
Ben: “Stan Kroenke has more than seven friends” is shorthand for “I don’t think the NFL can get 24 votes right now to move the Chargers and Raiders to Carson.” That’s based on who is likely to vote for whatever Kroenke wants, not on what would be best for the NFL as a whole or anything.
You’re correct that a Walmart could go up to 100,000 square feet — the 80,000 figure is in a different part of the document. Anyway, we’re in agreement that a Walmart would be allowable, but it’d have to be a small one.
John, I’ve said since day one that Stan’s land purchase was a master stroke. It freshens the con, gets the stadium cash, and keeps the NFL on top where it belongs, my friends.
The process in getting approvals for a Walmart at the Inglewood site will likely be more difficult than the current undertaking of having an NFL placed in the Los Angeles area. You can’t just place a Walmart there without the vetting process. There would have to be public hearings. Doing so regardless of procedure would be a violation of the Brown Act.
IMO, the fact that St. Louis and the state of Missouri are offering more public funding than the Vikings received keeps the Rams in St. Louis, the rent is the key component.
Vikings
$498 million up front public contribution
– $211 million = PV of $13.75 million annual rent for 30 years @ 5%
Rams
$400 million up front public contribution
– $23 million = PV of $1.5 million annual rent for 30 years @ 5%
This Rams stadium deal is the best for a NFL owner and the worst deal for the taxpayers since Indy grabbed the title of worst NFL stadium deal ever.
vikings.com/stadium/new-stadium/faq.html
pardell, the “stadium” initiative approves “large-format retail discount stores < 100,000 square feet". Nothing else is required.
Inglewood is getting a Walmart Discount Store and a Walmart Neighborhood Market in the giant retail center that Stan is building instead of a stadium.
http://corporate.walmart.com/our-story/our-business
ben. Not without going through the approval process. http://m.vvdailypress.com/article/20150204/NEWS/150209929
You know, you can be a fan of ANY NFL team you want, just by saying so! You don’t have a team that plays in your town, and with current NFL offerings, you don’t even need them to be on local TV to watch.
Don’t you find it kind of odd that you are arguing about an NFL team moving 100 miles away, when most of the people arguing rarely went in person to see a game, and most of the people won’t see a game where they play next?
So pick the team of some other town that paid for an NFL stadium, and make it your own. Huge money saver.
GDub – I’m very happy that my city wont be giving the Spanos family any more money and the Chargers have to pay us $15,195,000 to end their lease.
Gdub. I’m happy my city didn’t sell out to the 49ers and Levi’s Stadium became Santa Clara’s headache.