Chargers Will Fail in Los Angeles Too without Changes to Mom-and-Pop Operation
The hardest tumble a man can make is to fall over his own bluff.
The San Diego Chargers have been trying for years to coerce taxpayers, the city of San Diego, Eli Manning and the NFL to close the gap of incompetence and underspending and #MakeTheChargersGreatAgain. Should they opt for Los Angeles, they will find themselves deeper in the red and shocked that it went wrong.
The franchise basically said as much in its article, Chargers Sick of Same Losing Script and this was BEFORE they lost to the Browns.
I want to help, not as a Chargers fan, but as someone who recognizes that the United States’ 8th largest city should have multiple professional sports franchises, be central to economic development and regional innovation and should be a regular host of the league’s premiere event, the Super Bowl.
What follows is not hyperbole, it’s math and a familiar American tale. It’s also a playbook on how to stay and thrive here in San Diego.
1. Debunking the Economic Benefits of a Move to LA
The story that Dean Spanos, Chairman of the San Diego Chargers, and the Spanos Family want you to believe is that there is so much money waiting for them in Los Angeles, and that the city and league must bend to them to keep the Chargers here.
What he doesn’t tell you, is that much like ownership of the other embattled franchise, the Oakland Raiders, the Spanos family fortune is more tied to the Chargers franchise value that any of the top franchises in the NFL.
Said differently, the Spanos net worth is effectively the San Diego Chargers. I know, I know, I’m leaving out some developments in the booming town of Stockton, CA. But I digress…They’re actually pretty close to broke, by NFL standards. I know, I know, how can an NFL owner be broke? He owns a team worth more than $1.5 billion that could move to the 2nd biggest media market in the country.
Stan Kroenke for comparison, owns four professional sports teams. Steve Bisciotti, own the Ravens, and one of the largest technical staffing companies in the world. Even the league’s biggest embarrassment (yes, even with a loss, the Chargers are better than the Browns) the Cleveland Browns Jimmy Haslam is the CEO and Chairman of Flying J and at least worth 2–3x the Spanos clan. While some “family franchises” are left, these franchises have all tasted a Super Bowl victory, and therefore have a culture of wining not present with the Chargers.
It may be a better media market. And, you will always be second. Remember, Spanos clan, you work for Kroenke. It ain’t the other way around.
“The net gain in franchise value from L.A. relocation for each of the [three] candidates would probably be in the range of $800 million to $1 billion,” John Vrooman, a sports economics professor at Vanderbilt University in Nashville, Tennessee.
Here’s the problem with that figure for the Chargers. Upon a move to Los Angeles, the Chargers will:
- Need to sell ~80,000 season ticket licenses (in a city that already has one sh*tty NFL team and nearly 365 days of sun)
- Be a tenant, splitting the upside of Kroenke’s new Super Facility
- Must build a new practice facility
- Strip out the NFL’s $650 million in relocation fees, even if a portion is payable over 20 years with debt
- And, add a new practice facility, which if you want to keep up with the University of Kentucky, you’re looking at $45 million, or the Cowboys, $1.5 billion. Say $100 million for round numbers-sake.
Cowboys to spend more on practice facility than they did on their stadium
The Dallas Cowboys are moving. Like most moves, it’ll be a costly one. Unlike most moves, the final price tag will…
And the Spanos once again finds itself in the exact same spot. A cash constrained owner that despite its Zip Code is unlikely to attract big name talent. If you can’t offer top notch facilities, top notch coaches and players aren’t coming.
This also does little to recognize that putting butts in seats (especially in LA) is getting harder, not easier, considering that perhaps, we hit “peak NFL,” whether concussions, a terrible product, see Chargers, San Diego or Ram, Los Angeles as two nearby examples. Find me another warm weather team that’s had a good 2016? The Texans? The Dolphins?
Bottom Line: Unless the Chargers get good, and fast, both unlikely in the NFL without spending real dollars, the relocation does little to boost Spanos bottom line.
2. Debunking San Diego’s Disinterest in the franchise
While injuries absolutely bit the Chargers this year (Keenan Allen, Brendan Oliver, Melvin Gordon et al), so too did questionable Management decisions.
- The only starting NFL Quarterbacks older than Philip Rivers are Tom Brady, Drew Brees and Eli Manning. Interestingly, the Chargers could have had all three, well with Brees and Manning both having been drafted by San Diego, and Brady notoriously not going until the 6th round.
- Mike McCoy, Chargers head coach is tied for 2nd to last in the league for Salary. His poor play calling down the stretch has been noted many times.
- The San Diego Chargers offensive line was rated the worst in the league going into Week 11 by Pro Football Focus.
- Did I mention the practice facility?
5. Chargers players, who despite what we want to believe, are people too, have no clarity from their bosses on where they will be sending their children to school or whether they should buy or rent. Don’t you think this affects how they play every week?
San Diego fans are smart as the city is the:
- Top Life Science and Bioscience location (#4 Jones Lang LaSalle 2015)
- #1 Concentration of military/defense assets in the world (San Diego Military Advisory Council)
- #1 most patents Sports and Active lifestyle sector with 1,200+ companies in the region. (San Diego Regional EDC)
- Home to University of California San Diego (UCSD) ranked #3 best public university in the U.S. and #17 in the world (World University Rankings, 2016)
Do you think they don’t notice how you’ve run the team?
Should they be coerced into supporting an inferior product based on geography? Go ask Jacksonville how that’s going.
The fans in San Diego have spoken that they don’t want to support a family business incapable of spending, and competing against owners and teams operating on a different level.
Who does support it, and give opposing teams an edge? — Our booming Tourism sector, which has 34M annual visitors generating $9.9B in spending.
Shortage of money, season ticket holders or sponsors is not the issue, or shouldn’t be, though the Spanos’ will tell you otherwise. Where they are correct is that Qualcomm stadium is a dump. Unfortunately, the Spanos’ window for building a stadium was actually about 10–15 years ago. That window closed. Public financing of stadiums is less appealing to municipalities for good reason.
You’re rich and can get richer, figure it out on your own.
3. Is there a way out? A Letter to John
Dear John (sic: Spanos),
We haven’t met, though we do have a few things in common. You went to Wake Forest. I went to University of North Carolina, so we’re both well heeled ACC graduates. We’re both almost millenials who have semi-active Twitter accounts. You have real football responsibilities, I won two Fantasy Football leagues and placed third in another.
Ok, ok, it probably ends there.
That said, I know you are aware of most of what I’ve written, you just can’t say it.
I’d posit you know that moving to LA will have you, your family and the Chargers always playing second fiddle ala the New York Jets to the New York Giants; the LA Clippers to the LA Lakers; the Pittsburgh Pirates to the Pittsburgh Steelers.
It also limits the real financial upside for you and the franchise.
And while I understand the traditional route you and the franchise chose to secure public funding for a new stadium, let’s be real, you’re not really developers like Stan Kroenke or Jerry Jones, so there just isn’t the same “vision” thing.
I’d argue you can’t win like that and you can’t expand the pie. Think bigger. A few off the wall ideas.
- Own Mexico City (and Tijuana) — The NFL wants games there? San Diego should sign up to play there every year. 25+ million people. Your market.
- Build a top notch practice facility, here. — You want your team to feel like winners every day they come to work. The current facility is ridiculed across the league and amongst current players.
- Steal fans from LA and Las Vegas — Be the driving force behind a high-speed rail corridor that zips fans from Downtown LA or Las Vegas to your stadium. Create tailgate cars, on-train betting and entertainment.
- Find a development partner (not lessor see: Kroenke, Stan) for a new stadium, convadium, mixed use development or whatever the hell it’s called. If you rent it, you’re capped on value. If you build it, you’re not. I know it was tossed a few years ago… but want to be closer to the LA market, reconsider North County.
- Be innovative with how you engage your city. As noted above, San Diego has some compelling business dynamics, the military, bio-tech, tourism. Figure out how to engage these sectors. For example, you could literally have the most advanced training facility in the world with bio-tech helping you create it. I know, what’s new about this versus what you tried? Everything. It’s not your job to anchor a San Diego downtown revitalization project. Plenty of stadiums exist in “odd” places and still draw fans. See Dallas, Los Angeles, New England, San Jose (I mean the 49ers of course).
So John, I know you’re the one pulling the strings now, and I know you know the realities of the cash layouts that are inevitable if you do move to LA. I hope you’ll reconsider.
If you want to chat, I’m around.