The Race for L.A. Heats Up
The 20-year saga of the NFL’s absence from the nation’s second-largest market, Los Angeles, appears poised to come to an end.
The lack of a team in L.A. has not been for lack of effort or attention. I remember my first NFL owners’ meetings, when I joined the Packers in 1999; a key agenda item of the meetings was—you guessed it—Los Angeles. At that time, the brief momentum for L.A. fizzled as an expansion team was placed in Houston, with the $700 million expansion fee paid by Texans owner Robert McNair.
Since the Rams and Raiders left L.A. in 1995, there have been a variety of reasons why nothing substantive has happened there, with the stated reasons revolving around the lack of a viable stadium project. While the threat of moving to L.A. has served NFL owners as a leverage point in negotiations with local team markets and their politicians, there has not been a true sense that a move to L.A. was based in realty. That is, of course, until now.
There are three NFL owners who are both (1) expressing levels of dissatisfaction with the efforts of their home team markets and (2) casting any eye toward their own gleaming stadium project in L.A. For the first time in during the league’s 20-year absence from L.A., we have real traction towards a relocation of one, two or potentially even three teams, as the clock ticks towards a deadline of early 2016. Let’s examine.
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Home Team Markets
The annual fall gathering of NFL owners earlier this month was an L.A.-centric gathering. In an ironic and telling twist, the updates on what was happening in St. Louis, San Diego and Oakland were made not by owners Stan Kroenke, Dean Spanos and Mark Davis, nor by city or state representatives. Rather, NFL personnel such as Eric Grubman and Jay Bauman gave updates on stadium plans and financing in those cities. And not only were Kroenke, Spanos and Davis not part of the presentations on St. Louis, San Diego and Oakland, but they were a big part of presentations on L.A.! This was clearly a sign that (1) none of the three teams are pleased with their city’s efforts regarding new stadia, and (2) they are interested in moving their franchises to LA. Here’s a brief look into the updates.
The city is proposing a $1 billion facility on the Mississippi River with a variety of financing elements (a recent court decision allows a city tax to be levied without voter approval). And, while the owners’ meetings were ongoing, National Car Rental agreed to a 20-year naming rights deal worth $158 million. A report Thursday from the St. Louis Post-Dispatch says that a bill will be introduced Friday that will require a vote before $150 million in city funds could be used towards the stadium construction. This puts a snag in the proactivity of St. Louis officials discussed above. St. Louis presents as the home team situation with the city and state most proactively trying to step up, while its owner (Kroenke) appears intent on moving to L.A.
The team and city have been in protracted and sometimes-contentious discussions to replace Qualcomm Stadium, now nearly 50 years old. The city claims to have a viable plan for a $1.1 billion facility, although the Chargers do not buy into the plan, for two primary reasons. First, an environmental impact study must be completed on a very fast track, and the Chargers commented they “will not be the City’s guinea pig for this inevitably ill-fated legal experiment.” Ouch. Second, the proposal requires $350 million in taxpayer funds, with a referendum initially planned for January. The Chargers, keenly aware of the lack of public appetite for stadium financing, especially in California, see that as a losing proposition. Things can change—deadlines spur action—but as of now, the Chargers present as a probable applicant for relocation.
The Raiders share a clearly substandard facility with Major League Baseball’s Oakland Athletics and, simply, there is no plan. A potential financing partner, Floyd Kephart, dropped out, leaving a $400 million funding gap that neither Oakland city officials nor Alameda county officials can figure out how to fill. There still remains the remote possibility of the Raiders sharing Levi’s Stadium with the 49ers, although both teams loathe that idea. The Raiders seem a certain candidate for relocation.
On Monday, the NFL announced it will host “community hearings” next week in the three markets. While the outreach is positive, this has a “checking the box” feel to it, especially with Goodell not there (his “executive staff” will attend). With so much owner frustration with city officials, the league appears to be doing the owners’ dirty work with fans in these markets.
The L.A. Stadium Proposals
NFL owners have to decide (1) whether it is time to relocate at least one team to L.A. and, if so (2) which team(s) and which venue(s) to relocate to. Let’s examine.
Inglewood: Rams’ Roost
The Inglewood city council has approved plans for a $2 billion stadium—with a roof but open air on each side—on the site of the former Hollywood Park Racetrack. Kroenke, the league’s second-wealthiest owner (behind only Seattle’s Paul Allen) leads a group that will privately finance the stadium, which would open in 2018. It is no secret in league circles that Kroenke has had eyes for L.A. for some time.
Carson, once rejected as a potential home for an NFL franchise in L.A., now has approval from the city council on a $1.75 billion stadium, with Spanos and Davis promising no tax dollars would be used. The facility could also house offices for the NFL and serve as a west wing for the Pro Football Hall of Fame.
The subject of temporary locations in L.A. was discussed at the meetings, with a report as to what facilities would be interested in serving that role for 2016 and ’17. While the Rose Bowl has declined, the L.A. Coliseum is interested, and Anaheim remains in play.
If there is a move or moves to L.A., there will also be relocation fees from the moving team or teams, distributed to the rest of the owners. Neither amount nor structure of payment has been set; a deadline early next year will force that. However, I would expect it to be substantial; perhaps even a nine-figure amount to be split amongst the owners.
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As we approach election season in politics, we approach relocation season in the NFL. Relationships and political capital among ownership has been fostered, developed and nurtured for times like this.
NFL relocation guidelines require three-quarters approval from full ownership, and much politicking has already happened. The Chargers may not know if they have 24 votes, but believe they have the nine votes necessary to block a move by the Rams. Similarly, the Rams may not know if they have 24 votes, but believe they have nine votes necessary to block the Chargers (it is thought powerful owners Jerry Jones and Dan Snyder are lining up behind Kroenke).
Key to the process will be the L.A. committee of established and powerful owners Robert Kraft, Robert McNair, Jerry Richardson, Art Rooney, John Mara and Clark Hunt. And even more key to the process will be the sports figure perhaps more in the news than any over the past year, Roger Goodell.
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As I have consistently said over the past couple of years through the hysteria, Goodell’s job has never been in jeopardy despite missteps made. Business is booming and owners have supported Goodell at every turn; even Robert Kraft and Goodell seem to be on good working terms again (both compartmentalize well).
Now we have reached yet another watershed moment for Goodell, this one involving his bosses who control his personal job security and purse strings. Goodell must “manage the room” as owners line up behind one of the potentially three applications for relocation to L.A., a process sure to cause tension and strain in relationships. Goodell’s challenge is to build consensus towards an outcome in L.A. that NFL owners can not only live with, but also support privately and publicly. Stay tuned.
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