By Jaboner Jackson 8 a.m. | This past summer, AEG and the City of Los Angeles signed a Memorandum of Understanding (MOU) that provided the general framework for construction for Farmers Field in downtown Los Angeles. Under the MOU, AEG confirmed key aspects of its operation of Farmers Field in regards to professional football, including a nontraditional landlord-tenant relationship with an NFL team that would differ from usual NFL stadium situations. The MOU also delineated a clear relationship between Farmers Field and the City of Los Angeles for construction of a new wing for the Los Angeles Convention Center, commonly referred to as Pico Hall. But AEG has since stumbled in regards to both aspects, thereby delaying the Environmental Impact Report (EIR) for Farmers Field, which in turn has delayed a Disposition and Development Agreement (DDA) with the City of Los Angeles and resultant groundbreaking on construction by at least a year from 2012 to 2013.
By Jaboner Jackson 8 a.m. | Part 2 of 2 | Over the weekend, the City of Santa Clara announced that it had secured financing for construction of its planned stadium for the San Francisco 49ers. On Sunday, we examined in detail the Disposition and Development Agreement (DDA) for Santa Clara Stadium as only we can. Since our analysis was of a technical nature as related to financing, we will discuss Santa Clara Stadium today in more general terms as it relates to the City of Santa Clara, San Francisco 49ers, and even the Oakland Raiders, in question and answer format.
By Jaboner Jackson 5 p.m. | Yesterday, the City of Santa Clara released the Disposition and Development Agreement (DDA) for its planned football stadium for the San Francisco 49ers. The DDA is a contract between the City of Santa Clara and San Francisco 49ers that governs all aspects of stadium development, including financing, lease terms, and construction. The only holdup on the DDA had been financing, which the City of Santa Clara and San Francisco 49ers had had difficulty obtaining until recently, when a syndicate of investment banks led by Goldman Sachs and involving Bank of America/Merrill Lynch and U.S. Bank ("Banking Syndicate") arranged construction loans and follow-up takeout financing. Execution of the DDA is the ultimate step in building Santa Clara Stadium. Today, we delve into the financial aspects of the DDA as only we can by answering the most pertinent questions surrounding the DDA, City of Santa Clara, and San Francisco 49ers, and we come to the conclusion that the San Francisco 49ers are exposed to significant financial risk in this transaction that is unusual for an NFL team.
By Jaboner Jackson 8 a.m. | Yesterday, the Jacksonville Jaguars announced that the current owner, Wayne Weaver, had entered into an agreement with businessman Shahid Khan to purchase the team. The NFL is expected to vote on the transaction December 14 and the deal is expected to close with league approval in January 2012. Although the Jaguars have never been on our list of teams to relocate to Farmers Field, speculation by the media about a move to Los Angeles surfaced shortly after the planned sale was announced. Despite this speculation, the Jaguars are not tied to Farmers Field and will not be relocating to AEG's planned downtown Los Angeles stadium. Rather, AEG remains singularly focused on securing the San Diego Chargers as its anchor tenant.
By Jaboner Jackson 8 a.m. | Part 3 of 3 | Last week, footballphds.com began our three-part series investigating the financial issues surrounding the construction of a new East Village stadium for the San Diego Chargers. In Part 1, we examined the Chargers' push for shared stadium and convention center space in East Village and the City of San Diego's lackluster response. In Part 2, we looked at the cold, hard numbers of financing a public-private stadium. And today, we conduct our feasibility analysis and detail why a shared stadium and convention center space is the best financial option for both the City of San Diego and San Diego Chargers.
By Jaboner Jackson 8 am | Part 1 of 3 | For the past decade, the San Diego Chargers have been focusing on getting a new football stadium built. The Chargers currently stand at a crossroads regarding their stadium situation. In a three-part series, footballphds.com explores in full the financing issues surrounding the construction of a new San Diego Chargers stadium. Today, we investigate the Chargers’ current push for shared stadium and convention center space in East Village and the City of San Diego’s lukewarm response. In Part 2, we delve into the cold hard numbers involved in building a new downtown stadium like only we can. And in Part 3, we give our feasibility analysis on the project as a whole and offer our formal position statement on combined stadium-convention center space.
By Jaboner Jackson 8 am | Part 3 of 3 | Forget political issues, location, and the benefits and drawbacks of urban versus suburban stadiums—the only element that matters when it comes to building a stadium to house an NFL team in Los Angeles is financing. Financing refers to the raising of monies to pay for all aspects of stadium design and construction. The reason why the Raiders left Los Angeles after the 1994 season was financing—the Los Angeles Memorial Sports Commission did not have the money to renovate the Los Angeles Memorial Coliseum. Two weeks ago, I reviewed financing an NFL stadium in Los Angeles by examining how real life valuation of NFL franchises is determined. Last week, I explored NFL stadium financing in Los Angeles by giving real world valuations for the three NFL teams in California, the San Diego Chargers, San Francisco 49ers, and Oakland Raiders. Today, I take a look at how both AEG and Majestic Realty are battling it out finance an NFL stadium.
By Jaboner Jackson 8 am and UPDATED on 10/24/2011 | Part 2 of 3 | Last week, the FOOTBALLPHDS examined how NFL franchise value is determined. Today, we take a look at real life valuations for the San Diego Chargers, San Francisco 49ers, and Oakland Raiders, three California teams that are looking for Brand Spanking New Stadiums. As we pointed out earlier this month--long before ESPN once again followed our trailblazing lead and copied us—financing is the only reason why these three teams are not currently playing in new stadiums. Financing refers to the raising of monies to fund a project, a process that the Chargers, 49ers, and Raiders have had a difficult time doing for several years now. Forbes’ estimations of franchise value are meaningless in the real world since they rely mostly on current revenues and exclude debt burdens. For this reason, I have turned to my former colleagues in the investment banking arena to assess franchise value based on comparables (“comps”) and discounted future cash flows, which are the true way that NFL franchises are valued.