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12May/119

NFL STADIUM UPDATE

By Jaboner Jackson 9:15 am | With the NFL Lockout fully entrenched via the Eighth Circuit Court of Appeals, NFL business has ground to a halt once again.  Here is a roundup of the NFL stadium situation, lockout edition:

1. Minnesota Vikings | The Vikings successfully pitted two competing entities against each each over the past year and have come through with a firm commitment this week for a new stadium out in the suburbs of Ramsey County.  Owner Zygi Wilf rejected Minneapolis' offer and like the rest of America, fled to the 'burbs.

Money: The stadium will cost $1 billion and the Vikes will put up about $400 million.

Analysis: The era of public money for billionaires is still alive and well in the midwest.

2. Oakland Raiders | Owner Al Davis has been adamant in public about building a new stadium at the current site in Oakland but in private he has continued to explore options for a return to Los Angeles to play in Farmers Field. Davis and the Raiders feel that they legally still own the rights to the Los Angeles football market.  He has also been hesitant about a proposed shared stadium between the Raiders and the 49ers in Santa Clara.  NFL Commissioner Roger Goodell would like the Raiders to play in a shared stadium with the Niners but Davis sees Goodell as an inexperienced attorney who is ill-suited to run the league (we agree).  The Raiders were the only team to abstain from the vote in 2006 that elected Goodell as commissioner and they do not care what Goodell has to say because they are doing their best DeMaurice Smith imitation and not listening.

Money: A source with AEG has told me that if the Raiders are not the eventual tenants of Farmers Field, they are prepared to proceed with a legal settlement with the Raiders regarding disputed NFL rights to the Los Angeles market to expedite having a team.

Analysis: The Raiders are unlikely to get a new stadium in Oakland due to the lack of public financing, which means that there is a real possibility that they will play in Los Angeles.  The lack of public financing will (rightly) play out over and over again for California stadiums.

3. San Francisco 49ers | A source with knowledge of the situation has told me that the Yorks, owners of the Niners, began the process in April 2011 of exploring a sale of the team, with the primary motivation being financial.  The Niners yield about $30 million in annual cash flow for the Yorks, which is a paltry 3% return on the almost $1 billion valuation of the franchise. Debt payment on a new stadium will wipe out all profits if the old CBA is followed.

Nonetheless, the Niners have continued to push for a stadium in the suburb of Santa Clara, which is about 30 miles away from San Francisco.  There is at least one investor group that is interested in buying a majority share of the Niners and financing a stadium within San Francisco itself.

Money: The Niners were able to get Santa Clara to pass Measure J, which would help finance the $1 billion stadium.

Analysis: The Yorks lack the deep pockets to create a stadium without public money.  If the Yorks remain owners, expect a stadium in Santa Clara, where some public monies are (wrongly) available.  If the Yorks sell, a stadium in San Francisco becomes likely.

4. San Diego Chargers | The Chargers have been linked tangentially to playing in Farmers Field in L.A. but in reality the link remains a negotiating play by the Spanos family to milk public money for a new downtown San Diego stadium.  No concrete plans exist for a new stadium or even whether the stadium will be a stand alone facility or part of an entertainment complex (such as AEG's L.A. Live in Los Angeles, where the Staples Center, Nokia Theatre, and (future) Farmers Field lie).  The San Diego stadium will need significant G3 financing from the NFL to be a viable option.

Money: The Spanos have it but they're not spending.  Considering how they treat their players, we are not surprised.

Analysis: The Chargers lack a tangible link to Los Angeles and AEG.  They're not moving.  Qualcomm is home.

5. Farmers Field, Los Angeles | AEG has fallen behind their own internal and public schedule.  Whereas they were aiming to have a team committed by March, a stadium built by 2014, and the Superbowl secured for 2016, they are still without a firm commitment from either the NFL for an expansion team or an individual owner for relocation.

At the city level, the stadium had been a done deal since last year.  As AEG continues to pretend that they are listening to the citizens of Los Angeles with their Environmental Impact Review and town-hall meetings, in reality they are waiting out the NFL lockout and waiting to see whether the NFL will commit to expansion or G3 financing for any of the teams mentioned above.  AEG has positioned itself strongly.  Although public reports put the value of the naming rights for Farmers Field at $700 million, a source within AEG has told me that the true value is closer to $1 billion.

The City and Mayor's office (who have never seen a dollar in their palms that they haven't liked) are selling the public on the idea of a new convention center complex that will bring in revenue to the City's coffers.  In reality, AEG will manage the convention business as well and downtown Los Angeles will continue to be AEG's playground and city officials will continue to be its pimp.

Money: Although AEG claims that no public money will be used to build Farmers Field, they are telling half-truths.  The land will be leased from the city for $1.  Furthermore, several tax credits will be initiated and maintained.  The true cost to taxpayers is hundreds of millions of dollars.

Analysis: Whether Angelenos want it or not (and they really do not), Farmers Field is a done deal on the city level.  The lack of a new CBA is the only holdup.

6. Wrap up | It's no coincidence that all the teams in California have yet to have new stadiums.  The State has been unwilling to finance stadiums for billionaires, and rightly so.  Governator Arnold Schwarzengger shied away from offering anything but moral support for new stadiums and current Governor Jerry Brown has stated that there will be no money from the State for football stadiums.  California continues to struggle with unemployment, rising Medicaid costs, and a budget deficit.  Football is rightly not a priority.

Accordingly, the California stadiums are relying on cities to provide monies.  And local politics is the world's second oldest profession.  Eventually city officials will open their legs.

jaboner@footballphds.com

Comments (9) Trackbacks (1)
  1. Hey Jaboner, if the Chargers stay in San Diego and get a new stadium I will personally take you to the game. Its hard to believe they aren’t going to leave because this city is flat broke. My twitter handle is @will61589. Hopefully we can enjoy a Chargers/Raiders game from San Diego in 4 years. I’m dead serious also.

  2. CA also has the crushing burden of grandfathered pension plans. The state will be bankrupt by 2020 unless they shed unnecessary debt. State money will not be offered to subsidize billionaire owners.

  3. It looks like the Majestic stadium wasn’t written about. I don’t think that Farmers Field is the only thing for LA. The Majestic stadium in Walnut City of Industry can still happen.

    • Not only the Grand Crossing (City of Industry) Stadium can still happen, I believe that it will happen. AEG is going to give up after the LA people find out that AEG is not only trying to manage the convention center, they are trying to manage LA’s money.

  4. Nice write-up. Personally, I don’t care if I have to help pay for the stadiums. I voted for the Broncos new stadium, and it’s a great for our city to have a top-tier stadium. We removed an eye-sore, and that’s what Old Mile High was. The dumb kids are going to be dumb, regardless of how much money we stuff into the public school system, or whatever these people are so worried about. I like the Broncos more than kids.

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