By Jaboner Jackson 6:45 pm | Today we Stack Rank the teams headed to Farmers Field in downtown Los Angeles for the final time. We put in hard work this weekend figuring out the logistics for the return of the NFL to Los Angeles and anticipate that these will be the Final Stack Rankings. We reviewed spreadsheets and news reports, texted like giddy teenagers, threw back drinks with one too many investment bankers at the JW Marriott one too many times, and even befriended custodians in not so high places. We now believe that we have a firm grip on what team will be coming to Los Angeles. The FOOTBALLPHDS welcome the San Diego Chargers to Los Angeles as the anchor tenant of Farmers Field.
(Note from our Overpaid Attorneys: The Final Stack Rankings are based on analyses by the FOOTBALLPHDS and they have not confirmed this information directly with AEG or the teams listed below.)
1. San Diego Chargers
We have every reason to believe that the San Diego Chargers will be the new tenant of Farmers Field. AEG will announce the transaction at the completion of the 2011-12 NFL season. We believe that AEG is in negotiations to buy close to 100% of the Chargers from the Spanos Family at a valuation of between $800-900 million. Contrary to language contained in the Memorandum of Understanding, we do not believe that AEG is seeking only a minority position. Rather, AEG is looking for majority control of a team.
Per NFL bylaws 3.2, AEG technically will not be the owner of the Chargers. Rather, Philip Anschutz will form a separate “Football Company” to purchase close to 100% of the Chargers. Since NFL bylaws dictate that only individuals can own shares in the “Football Company,” AEG will not actually be a shareholder. Rather, Anschutz will be the shareholder.
We believe that Anschutz will subsequently syndicate out a minority interest in the Chargers and that Casey Wasserman is likely to be part of this syndicate. Like many owners of NFL teams before them, the Spanos family will no longer be involved in professional football.
Upon completion of the transaction to purchase close to 100% of the Chargers from the Spanos family, Anschutz and AEG will execute the early termination clause contained in the Chargers’ lease with the City of San Diego and Qualcomm Stadium. The early termination fee will be approximately $24 million, which will go to the City and not to the Spanos family.
We believe that AEG will strike a deal to have the Chargers play in the Los Angeles Coliseum for the 2012 NFL season. The Chargers will play at the Coliseum until Farmers Field is completed in 2016. We believe that AEG will follow up on its public comments last week to the LA Times and will push for action at the State level to uproot the Coliseum Commission and place control of the Coliseum in the hands of the University of Southern California and AEG. (We will review the Coliseum Commission tomorrow.)
At this time, it is unclear if the Chargers will keep the name “Chargers” or re-brand themselves.
2. Everyone else: St. Louis Rams
After the Chargers, everyone else is a bridesmaid. The Rams have an out in their lease at Edward Jones for 2014 and could be the second tenant for Farmers Field but we do not believe that they will not be the anchor tenant.
Nonetheless, the Rams are the early favorite for being the second tenant. As we have previously discussed on this site, Stan Kroenke and AEG have a longstanding history of working together and the NFL would like to place two teams in the nation’s second largest media market.
3. Everyone else: Buffalo Bills
AEG continues to have discussions with the other “belles at the ball” for Farmers Field in the case that a Act of God (or Dementia) derails the Chargers transaction. AEG continues to talk to the Bills although we believe that a transaction remains unlikely. Owner Ralph Wilson has been listening to AEG’s offer to buy out the team but has not acted on it, preferring to stick to his original plan of having the team sold upon his death. But Wilson is listening.
4. Everyone else: San Francisco 49ers
Several times we have speculated that the Yorks are having difficulty financing a new NFL stadium. After our analyses this weekend, we continue to believe that this is the case. The Santa Clara project has made progress at the legislative level but faces difficulty at the financing level, both via the municipality and Yorks. The Yorks supposedly lack the deep pockets needed to finance the stadium and are relying on the NFL to step in. The 49ers are another of the “belles at the ball” in the event that the Chargers transaction gets derailed. We believe that the Yorks will eventually sell the 49ers.
5. Everyone Else: Oakland Raiders
At this point, Mark Davis, who is the son of Al Davis, is leading the charge for a new stadium. The Davis family remains committed to the idea of a new stadium in Oakland, even if we remain skeptical of a new Oakland stadium. Of note, AEG is expected to bid this fall on the management contract for O.co Coliseum. Interestingly, Al Davis is on the record as having said, “As LA knows, if they can get a stadium, they can knock on the door.” But it takes more than a knock to get a transaction done. We believe that the Raiders are unlikely to be the anchor tenant for Farmers Field since the Davis family is unwilling to cede majority control.
Who Did Not Make The List
AEG remains interested in the Jaguars as another of the “belles at the ball” but the legal situation surrounding the breaking of the lease with EverBank Field remains muddy.
The Vikings were the popular choice in the mainstream media for being the anchor tenant for Farmers Field but we have never heard this to be the case. The Vikings are poised to get a stadium done in Ramsey County. We believe that AEG is leading the charge to manage the new stadium.
If you missed our NFL in LA Primer yesterday, you can catch it here. Tomorrow, I look at the Los Angeles Coliseum Commission.