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RamFan503

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One minor point about the G4 loan and Kroenke's responsibilities in paying it back. I keep seeing people add the amount of the loan to the total amount that he is responsible for paying. That seems a bit misleading, as the loan can actually be paid back with monies from that would normally be going back to the NFL as revenue sharing. For example, see the following regarding the Falcons new stadium and the G4 loan:

http://newstadium.atlantafalcons.com/funding2/g-4-stadium-financing/

In order to get that $200 million in G4 funding, the owner has to contribute at least that much towards the stadium. Anyway, just fyi...
You are leaving out the part of it being essentially a lean on the team. If the team is sold, the $200 million has to be paid back.
 

RamFan503

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Reports (or maybe just rumors) are starting up about stadiums getting done in Oakland & SD. If the Rams become the 'only' team in L.A., I would bet the NFL will use the vacant "2nd Team" slot as on going leverage for other stadiums to get built.
Yep.
 

mr.stlouis

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Main Hook
So the word is the Rams staying in STL is gaining more and more momentum from the league. SD and OAK proposing a joint stadium could very well be the last straw.

Looking good STL
 

RedAlice

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I'll answer your question but in the future this topic should be confined to the many Sam Bradford threads already posted.

I shudder at the thought of Sam Bradford being the starting QB for the Rams this coming season without someone else of adequate skills being able to step in if/when an injury occurs. Unfortunately there is no one in free agency that fits the bill.

The Rams staff got themselves into this predicament by not addressing this last season. Jeff Fisher, according to the man himself, came to the Rams mainly because of Sam Bradford. If things go badly this coming season, that ironically may be the main reason he gets fired.

As far as relocation and stadium issues go...no one knows much of anything at this point other than that the Rams will be playing in St. Louis for the 2015 season. The rest is all pure speculation, gossip, and rumors. Until Stan Kroenke holds a press conference and makes his intentions known, this topic will go round and round with no clarity. Our job as moderators is to make sure that the LA vs. St. Louis spat doesn't rear its ugly head on this thread. So far so good.

I agree with you 100% on every word.

Thank you for responding even though I asked in the wrong thread and I will take that topic to the right thread. But, your description is exactly what I believe as well.

As to the stadium topic of this thread. Living in San Diego is giving me a whole different perspective on everything right now as they face losing their team and I am watching them.

And yes - the Chargers moving to LA is SD fans losing them regardless of the number of miles.

Well, I'm going with either the Rams are home by me or they get a great new stadium I will go see them in. And no one knows....
 

drasconis

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JA
Oakland, Raiders Close To Signing Deal To Build New Stadium

OAKLAND (CBSLA.com) — Rumors of the Oakland Raiders coming back to Los Angeles could soon be laid to rest.

According to the San Francisco Chronicle, Oakland has a deal in place for a new stadium for Mark Davis’ Raiders.

Oakland would give the team free land upon which to build a stadium and would pay off the $120 million dollars owed toward their current stadium, O. Co Coliseum.

“I expect it to be executed soon,” said Zach Wasserman, an attorney for Coliseum City.

If the stadium is built, it will be worth $900 million to $1.2 billion.

The Raiders’ lease at the Oakland coliseum expires after this season, at which point the team can move wherever they find the best deal.


That is a pretty weak deal...the free land depending on location and size might be worth $100mil. The paying off of the old stadium loans is already required (notice that the Raiders lease it)....the government is on the hook for amount anyway, unless they wanted to default....lol.
 

BuiltRamTough

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Stadium economics: How building a venue in Inglewood makes financial sense - LA Times
It's not every day that a real estate developer considers walking away from $400 million in tax money.

But for St. Louis Rams owner Stan Kroenke, it just might make sense.

Moving his team to his 80,000-seat stadium in Inglewood will boost the Rams' profits and greatly increase the value of the franchise, sports economists say. And there is even more money to be made in the massive real estate development around it.

All that helps explain how Kroenke might profit from building the most expensive stadium ever in the U.S. — with no public money.

Inglewood city officials unanimously approved zoning changes Tuesday night for a $1.86-billion stadium at the old Hollywood Park racetrack. That vote gave Kroenke a clear head start in the NFL-to-Los Angeles derby that intensified last week with the unveiling of a competing stadium in Carson that would be shared by the San Diego Chargers and Oakland Raiders. That plan could yet derail Kroenke's ambitions.

The real estate baron's partnership with the developers of Hollywood Park reflects how profits from modern-day stadiums come from more than just the stadium.

The Rams owner bought a stake in Hollywood Park Land Co., which is turning a nearly 300-acre racetrack site into homes, office buildings, a big shopping center and now potentially an NFL stadium. It's the kind of thing that Kroenke can't do in St. Louis, which is proposing a publicly owned riverfront stadium surrounded mainly by parking lots.

The Inglewood plan follows a model increasingly popular among stadium owners, said Rodney Fort, a sports economist at the University of Michigan.

"You've got to spend money to make money, and he can make a lot more off his own development in L.A.," Fort said. "It's more like a real estate development than a stadium."

The terms of Kroenke's arrangement with Stockbridge Capital — the Bay Area investment firm that's been financing the redevelopment of the Hollywood Park property for a decade — haven't been disclosed. But Chris Meany, a senior vice president for the project, confirmed that Kroenke has bought a stake in Hollywood Park Land Co. and that his involvement extends beyond the stadium.

That means the deal would not be "unwound," even if the Rams don't move to L.A., Meany said. The Inglewood stadium proposal still must navigate the Byzantine politics of winning NFL approval should Kroenke formally request to move the Rams.

Even without the development deal, some economists see a strong case for moving from a smaller market to Southern California.

Although NFL franchises split about two-thirds of the league's revenue — including television contracts worth $4.9 billion last year — local factors could give a big boost to Kroenke's profits, said John Vrooman, a Vanderbilt University economist who studies the NFL.

He estimates that the Rams could earn $100 million more each year on sponsorships, marketing and premium seating than the team could in a new stadium in St. Louis. Further, a move could increase the team's value about 40%, to an estimated $2.5 billion.

"The move to L.A. is an economic no-brainer," even if the Rams pay for their own stadium, Vrooman said.

Others disagree, including Neil DeMause, editor of Field of Schemes, a website that tracks stadium subsidies. Even for Kroenke — who Forbes estimates is worth $5.7 billion — and his deep-pocketed partners at Stockbridge, paying for a stadium is a big undertaking. The $1.86-billion construction estimate doesn't include a likely "relocation fee" paid to the NFL; those estimates run as high as $1 billion.

"That's an awful lot to spend out of your pocket," DeMause said. "It's a huge, huge risk."

One way to make that investment back is to use the stadium for more than just pro football.

The Dallas Cowboys' AT&T Stadium in Arlington, Texas, and the San Francisco 49ers' Levi's Stadium in Santa Clara, Calif., are helping to pay down their 10-figure price tags by hosting big-name concerts, international soccer matches, motocross and pro wrestling matches.

It's a way to make more money from $10 beers, $40 parking spaces and luxury suites, said Victor Matheson, a sports economist at Holy Cross College in Worcester, Mass.

"You want to use these things as much as you can," he said. "But there's just not that many 60,000-plus person events."

And the stadium would be entering a crowded market. The Rose Bowl and the Los Angeles Coliseum have long-term contracts with UCLA and USC football, respectively, and have been branching out to attract more concerts and soccer. Dodger Stadium, Stubhub Center in Carson and Staples Center also compete for some of the same events that might fill seats in Inglewood.

"There are events for stadiums, but it's not an infinite number," said Darryl Dunn, general manager of the Rose Bowl.

A state-of-the-art stadium could draw new events, said David Simon, president of the L.A. Sports Council. Today, the Southland can't host a Super Bowl because it doesn't have an NFL team. Nor can L.A. host an NCAA basketball Final Four, because it doesn't have a large enough indoor arena.

The Inglewood stadium is being designed with those sort of opportunities in mind, Meany of the Hollywood Park Land Co. said. It would be covered with a roof made of a clear plastic film — allowing it to host "indoor" basketball events — with open-air sides to let in the Southern California climate.

"This will accommodate basketball, soccer, concerts," he said.

Hollywood Park plans would make the football stadium the hub of a larger sports and entertainment district with a performing arts center and a broader development that would include six or seven office buildings, a shopping center 1 1/2 times the size of the Grove in West L.A., and about 2,500 new homes.

The Inglewood stadium would sit relatively low in the ground, and face the shopping center at its narrowest point, with an open plaza, instead of a broad expanse of concrete. It would include 12,000 on-site parking spaces for tailgaters on game days, plus more at the neighboring Forum.

That's a different approach than the one being pitched in St. Louis or the Carson project that involves the Chargers and Raiders, who last week released a video of a bowl ringed with vast tailgating lots on their 168-acre site.

The Inglewood development underscores why big-time sports aren't just about sports anymore, said Fort, the University of Michigan sports economist. The sports are often the anchor of a larger enterprise.

"It's getting tough to tell whether they're baseball teams or sports networks, basketball teams or part of a real estate development," he said. "That changes the perspective. The stakes have gone up."
 

BuiltRamTough

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NFL franchise relocations since 1945:

1946: Cleveland Rams to Los Angeles

1960: Chicago Cardinals to St. Louis

1982: Oakland Raiders to Los Angeles

1984: Baltimore Colts to Indianapolis

1988: St. Louis Cardinals to Phoenix

1995: Los Angeles Rams to St. Louis

1995: Los Angeles Raiders to Oakland

1996: Cleveland Browns to Baltimore, renamed the Ravens.

1997: Houston Oilers to Memphis, and to Nashville in 1998, renamed Tennessee Titans

Note: The Los Angeles Chargers moved to San Diego in 1960, and the Dallas Texans moved to Kansas City and became the Chiefs in 1963. Both teams were in the AFL, which later merged with the NFL.
 

tonyl711

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Jul 22, 2013
Messages
863
Ever hear of $100M spent for 60 acres at Hollywood Park? How about the 'fact' that Stan has publically teamed with the Stockbridge Capital Group to build a stadium? What did the Vikings do? Parked a private jet at an L.A. area airport for a few weeks. I see NO comparison to the Vikings situation at all.

http://www.latimes.com/business/la-fi-stadium-economics-20150226-story.html#page=1
you see no comparisons? look harder my friend, Stan is a developer first and foremost, how do developers make money? they buy land and develop it. everyone keeps saying Stan wants to move to LA besides the one person whose voice matters Stans, when he says it ill believe it, till then ill look at it as one of the many ill take my team to LA leverage deals there have already been.
 

snackdaddy

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Charlie
A guy worth hundred times more than most people make in a lifetime wants to make more money? At some point it ain't about the money anymore. It becomes a challenge I guess. Guess I should be glad I ain't rich. Eventually nothing can satisfy you when you can afford everything.
 

ZigZagRam

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Do you actually know this about their rules for creating an infrastructure district? I know gov't has shortcuts to many statutes if they choose to employ them. What is it about an infrastructure district that would take the city/county so long to get set up?

Well there would have to be significant planning, environmental reports, etc. that goes into the whole process. That stuff takes much longer than a year to complete.

As to #3 - I think it is pretty common thought that a 2/3 vote is always very difficult to achieve. They are there so that a project or tax has to be viewed as crucial to the area before the voters will pass it. But a 55% vote? Not quite so difficult. If a plan were put together where a portion of the public monies were handled in other creative ways and the public was asked to carry the remainder, I think a 55% vote would be a slam dunk. Faced with such a plan, I think Spanos does what he has wanted all along unless he is just lying - he stays in SD.

I just don't think you can be this sure about a vote. If they can get creative, the voters are VERY likely to approve say 1/3 of the cost of a new stadium in order to keep the Chargers. You think the Padres are more important to them?

I've read multiple sources that have said even a simple majority would be difficult to achieve in San Diego. They do NOT want private money into a stadium. Considering that they committed and worked much harder to build Petco than they have for Spanos and the Chargers, yes, I feel it's fair to say the city believes the Padres are more important to them.

It's also unlikely that they will be able to avoid the 2/3 vote because they'll need to guarantee payment to do that, and the means of doing that will require a 2/3 vote.


I have only heard that getting a 2/3 majority is very unlikely - not a 55% vote. I don't think you would have people talking about reserve funds and districts unless they knew there was a way to get it done. Is it a done deal? Certainly not. Dead in the water? No way. In fact, I would say it is far more credible that the city/county can come up with a proposal to keep the Chargers than the chances of the Carson project getting done.

See below.

How so? I believe there are less union requirements in SD and also, if they build the new stadium on the current property, you can remove that from the bill. If you take out property costs, building costs are higher in the metro areas of Oregon than they are in Southern Cal. Are we sure that building costs in St Louis are so much lower? Maybe they are but I'm going to guess that if anything, it is not significant.

Good point about already owning the property. I know building costs are going to be higher, but I can't give you an exchange rate on that. You could be right.

It doesn't appear to me that everyone else IS saying it is nearly impossible. More that politicians need to pull together and get creative. I'd guess that the county has the money in its reserves if it were convinced it could recoup those funds in other ways. Portland, OR reportedly has over a billion dollars in reserves - PORTLAND.

You're not looking very hard then. Specifically read into the difficulties that have been caused by the city and county not even being close to being on the same page. Throw in the need for a new convention center, an unwillingness to build both together, and other financial needs and you'll start to see why this is nothing but Faulconer trying to save face after doing nothing for nearly a year.

Don't want to listen to what I have to say, fine, take it from Marc Fabiani of the Chargers from yesterday's stadium fan chat. Pretty damning and it's the same things I've been reading, and hearing from different sources INCLUDING Rams fans who want the team to return to L.A. They say their committed to work with San Diego, but continue to shoot down all ideas.

I've yet to find one person that has said this is going to be possible who hasn't brought up a plan that has a bunch of holes in it to kill the idea right away.

On getting assistance from SDSU:

San Diego State would be a valued tenant in any new stadium, but we cannot count on any significant contribution from the state university system given the economic conditions that the system and its students now face.

SDSU leadership has always been very supportive, but the state university system is suffering from severe financial constraints, and we cannot rightly expect that system to contribute significantly to a stadium.



On Rob Boberts' bridge financing plan:

The County is going to require guaranteed repayment sources, and so that pushes us back into the roadblock we have faced for 14 years -- how to create publicly acceptable funding streams for the project.

On the roadblock, a bridge loan is meant to get you from point A to point B, when your funding sources start to flow. But no one makes a bridge loan unless they are sure you have the funding sources in place. And of course, finding a publicly acceptable way to raise funds for this project -- with the two thirds vote requirement in California -- has been our roadblock now for 14 years.

There are real limits to what funds raised by an Infrastructure District can be used for, and those limits make such districts of limited use to a stadium project.



On the ongoing issues with the hoteliers:

The downtown hoteliers have not moved an inch, even after having their own funding plan declared illegal. It probably does not make sense for us to continue to wait and hope that they will change their minds.

The car rental tax in San Diego is one of the lowest of any big city in the nation. And the hotel tax in SD is also somewhat low compared to other big cities. That's why we proposed the hotel tax increase downtown -- because local voters would at least give it some consideration because the tax does not hit them directly. But again, the hoteliers have blocked us every step of the way.

And any car rental tax increase, or hotel tax increase, for a stadium would need a two thirds vote....impossible to achieve if you have a group like the hoteliers against you.



On the necessity of taxpayer-approved financing:

In our marketplace, the NFL, we are up against teams that have on average received about 60 cents on the dollar from taxpayers for stadium construction.

So how do we compete against these teams, on a level playing field, without finding a way to make up that 60 percent gap?

We've tried numerous ways over the last 14 years, ways that did not involve raising taxes. And we are still open to all alternatives. But that's the situation we find ourselves in -- we need to compete against the other teams in the NFL.



On resources being spent in San Diego and Carson:

We have spent 14 years and in excess of $15 million to find a solution in San Diego, and we anticipate spending considerable additional resources in San Diego in 2015.

But, as you know, we also have been forced to create an alternative for ourselves if we can't reach an agreement in San Diego. And that will require some significant expenditures in Carson as well in the coming months.

You will all be hearing news in the coming weeks out of Carson as the ballot measure moves forward. That is an inevitable part of the political process there, but that news does not mean that we have turned our attention away from SD.



On the unlikelihood of seeing significant support in the way of PSLs:

On PSLs, we have done considerable market research on the San Diego market. We have also studied the experience of the Padres. And based on all of that, we do not believe we can sell PSLs in our marketplace to even come anywhere close to matching what San Francisco did, or what the Rams expect to do in Inglewood. These are just very different markets.

Now that's not to say that no one will buy PSLs. I speak to people regularly who tell me that they would buy, and we are grateful for that. But the aggregate numbers are what count when it comes to stadium construction. And the aggregate numbers are nowhere close to where they would need to be to finance a project the way the 49ers did, or the way the Rams propose to do, or the way the Raiders and Chargers could finance a project in Carson.



On rebuilding a fanbase in Los Angeles:

With regard to the fan base in LA, 25% of our current season ticket members come from LA and Orange Counties. So we wouldn't be starting from scratch. And our studies show a tremendous appetite for NFL football in LA and Orange Counties.


On the unlikelihood of an expedited election:

The problem with a special election is that voter turnout in such elections is usually quite low -- and the voters who do turn out tend to be against new spending or ambitious projects. So, we have a huge hill to climb in any election because of the two-thirds vote rule in the California Constitution; a special election likely makes the hill insurmountable.


The rest can be read here:
http://forums.chargers.com/showthread.php?t=102829&page=4
 

ZigZagRam

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Messages
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Stadium economics: How building a venue in Inglewood makes financial sense - LA Times
It's not every day that a real estate developer considers walking away from $400 million in tax money.

But for St. Louis Rams owner Stan Kroenke, it just might make sense.

Moving his team to his 80,000-seat stadium in Inglewood will boost the Rams' profits and greatly increase the value of the franchise, sports economists say. And there is even more money to be made in the massive real estate development around it.

All that helps explain how Kroenke might profit from building the most expensive stadium ever in the U.S. — with no public money.

Inglewood city officials unanimously approved zoning changes Tuesday night for a $1.86-billion stadium at the old Hollywood Park racetrack. That vote gave Kroenke a clear head start in the NFL-to-Los Angeles derby that intensified last week with the unveiling of a competing stadium in Carson that would be shared by the San Diego Chargers and Oakland Raiders. That plan could yet derail Kroenke's ambitions.

The real estate baron's partnership with the developers of Hollywood Park reflects how profits from modern-day stadiums come from more than just the stadium.

The Rams owner bought a stake in Hollywood Park Land Co., which is turning a nearly 300-acre racetrack site into homes, office buildings, a big shopping center and now potentially an NFL stadium. It's the kind of thing that Kroenke can't do in St. Louis, which is proposing a publicly owned riverfront stadium surrounded mainly by parking lots.

The Inglewood plan follows a model increasingly popular among stadium owners, said Rodney Fort, a sports economist at the University of Michigan.

"You've got to spend money to make money, and he can make a lot more off his own development in L.A.," Fort said. "It's more like a real estate development than a stadium."

The terms of Kroenke's arrangement with Stockbridge Capital — the Bay Area investment firm that's been financing the redevelopment of the Hollywood Park property for a decade — haven't been disclosed. But Chris Meany, a senior vice president for the project, confirmed that Kroenke has bought a stake in Hollywood Park Land Co. and that his involvement extends beyond the stadium.

That means the deal would not be "unwound," even if the Rams don't move to L.A., Meany said. The Inglewood stadium proposal still must navigate the Byzantine politics of winning NFL approval should Kroenke formally request to move the Rams.

Even without the development deal, some economists see a strong case for moving from a smaller market to Southern California.

Although NFL franchises split about two-thirds of the league's revenue — including television contracts worth $4.9 billion last year — local factors could give a big boost to Kroenke's profits, said John Vrooman, a Vanderbilt University economist who studies the NFL.

He estimates that the Rams could earn $100 million more each year on sponsorships, marketing and premium seating than the team could in a new stadium in St. Louis. Further, a move could increase the team's value about 40%, to an estimated $2.5 billion.

"The move to L.A. is an economic no-brainer," even if the Rams pay for their own stadium, Vrooman said.

Others disagree, including Neil DeMause, editor of Field of Schemes, a website that tracks stadium subsidies. Even for Kroenke — who Forbes estimates is worth $5.7 billion — and his deep-pocketed partners at Stockbridge, paying for a stadium is a big undertaking. The $1.86-billion construction estimate doesn't include a likely "relocation fee" paid to the NFL; those estimates run as high as $1 billion.

"That's an awful lot to spend out of your pocket," DeMause said. "It's a huge, huge risk."

One way to make that investment back is to use the stadium for more than just pro football.

The Dallas Cowboys' AT&T Stadium in Arlington, Texas, and the San Francisco 49ers' Levi's Stadium in Santa Clara, Calif., are helping to pay down their 10-figure price tags by hosting big-name concerts, international soccer matches, motocross and pro wrestling matches.

It's a way to make more money from $10 beers, $40 parking spaces and luxury suites, said Victor Matheson, a sports economist at Holy Cross College in Worcester, Mass.

"You want to use these things as much as you can," he said. "But there's just not that many 60,000-plus person events."

And the stadium would be entering a crowded market. The Rose Bowl and the Los Angeles Coliseum have long-term contracts with UCLA and USC football, respectively, and have been branching out to attract more concerts and soccer. Dodger Stadium, Stubhub Center in Carson and Staples Center also compete for some of the same events that might fill seats in Inglewood.

"There are events for stadiums, but it's not an infinite number," said Darryl Dunn, general manager of the Rose Bowl.

A state-of-the-art stadium could draw new events, said David Simon, president of the L.A. Sports Council. Today, the Southland can't host a Super Bowl because it doesn't have an NFL team. Nor can L.A. host an NCAA basketball Final Four, because it doesn't have a large enough indoor arena.

The Inglewood stadium is being designed with those sort of opportunities in mind, Meany of the Hollywood Park Land Co. said. It would be covered with a roof made of a clear plastic film — allowing it to host "indoor" basketball events — with open-air sides to let in the Southern California climate.

"This will accommodate basketball, soccer, concerts," he said.

Hollywood Park plans would make the football stadium the hub of a larger sports and entertainment district with a performing arts center and a broader development that would include six or seven office buildings, a shopping center 1 1/2 times the size of the Grove in West L.A., and about 2,500 new homes.

The Inglewood stadium would sit relatively low in the ground, and face the shopping center at its narrowest point, with an open plaza, instead of a broad expanse of concrete. It would include 12,000 on-site parking spaces for tailgaters on game days, plus more at the neighboring Forum.

That's a different approach than the one being pitched in St. Louis or the Carson project that involves the Chargers and Raiders, who last week released a video of a bowl ringed with vast tailgating lots on their 168-acre site.

The Inglewood development underscores why big-time sports aren't just about sports anymore, said Fort, the University of Michigan sports economist. The sports are often the anchor of a larger enterprise.

"It's getting tough to tell whether they're baseball teams or sports networks, basketball teams or part of a real estate development," he said. "That changes the perspective. The stakes have gone up."

And a rebuttal from a non-LA or STL source: Field of Schemes writer Neil DeMause:

Crunching the Inglewood numbers: Rams stadium would bring new revenues, but getting to $1.86B is tough
Posted on February 26, 2015 by Neil deMause
Link

The Los Angeles Times’ Tim Logan, who has been doing excellent work on St. Louis Ramsowner Stan Kroenke’s Inglewood stadium plan (and I don’t just say that because he usually seems to interview me), had a long story yesterday headlined “Stadium economics: How building a venue in Inglewood makes financial sense.” So how does it make sense, exactly?

  • Sports economist Rod Fort says it’s a good deal for Kroenke if he can make enough money on the associated non-stadium development: “It’s more like a real estate development than a stadium.”
  • Sports economist John Vrooman says the Rams could bring in an extra $100 million a year in “sponsorships, marketing and premium seating” in L.A. as compared to St. Louis, calling a move “an economic no-brainer.”
  • Sports economist Victor Matheson says Kroenke could rent out and Inglewood stadium for concerts and the like, but “there’s just not that many 60,000-plus person events.”
  • I call spending $1.86 billion just to get uncertain revenues “a huge, huge risk.”
Fort’s and Vrooman’s points are the most viable arguments for a privately funded Inglewood stadium making sense for Kroenke, so let’s take them one at a time. First off, the real estate development at Hollywood Park might well bring in enough revenue to make a stadium-plus-development deal turn a profit — but then, why saddle it with a potentially money-losing stadium when the rest of the development was already approved and ready to go? Kroenke had to pay his development partners (no one knows how much) to buy into the bigger plan, and it doesn’t make sense that they’d voluntarily give him a lot more in revenues than he’s paying them to buy in, since a stadium doesn’t especially help them any.

As for the extra $100 million a year from being in Los Angeles, that is the big question: Precisely how much value does the L.A. market have to an NFL owner? We’ve heard that number before, on the San Francisco 49ers‘ move to Santa Clara, but we’ll have to wait till the new Forbes numbers come out this summer to see if they agree. We can use the Forbes numbers another way, though, to see how reasonable this is: What are the Rams revenues right now, and what would adding $100 million a year mean?

According to Forbes, the Rams were dead last in the NFL in revenue in 2013, at $250 million. (Being dead last in the NFL in revenue is still a pretty lucrative gig.) Adding $100 million would mean they’d have to jump to 5th in the league in revenue, behind only the Dallas Cowboys,New England Patriots, Washington Unmentionables, and New York Giants. That’s conceivable, I suppose, but I’d still call it a huge risk, even if maybe the Forbes figures might make me willing to lop off one “huge.”

And then, would even $100 million a year be enough to make a $1.86 billion stadium a good investment? Kroenke could presumably knock off some of that price tag with PSL sales (figure $300-400 million), naming rights (about $200 million in present value), and possibly NFL G-4 money ($200 million max). That leaves only a little over a billion dollars to pay off, which $100 million a year would cover, but without much left over for a return on investment. At best, then, Kroenke would be putting up more than a billion dollars out of pocket, plus whatever he’s spending on stadium land and a share of the associated development, for a return that he could get by putting his money in a decent stock index fund. (Okay, and increasing the value of his asset, which admittedly could come to a bunch — the Giants are worth about a billion dollars more than the Rams right now, according to Forbes, though the Giants also aren’t saddled with $1.86 billion in stadium debt.) And if there’s any significant relocation fee required by the NFL, then forget it.

Add it all up, and I would just suggest that the Times’ headline writers should have made one tense change: “How building a stadium in Inglewood could make economic sense.” We’re talking hypotheticals here, and everything would have to go Kroenke’s way for a $1.86 billion stadium to pay off for him. Or to put it another way: It’s a huge, huge risk.
 

BuiltRamTough

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Edmond
And a rebuttal from a non-LA or STL source: Field of Schemes writer Neil DeMause:

Crunching the Inglewood numbers: Rams stadium would bring new revenues, but getting to $1.86B is tough
Posted on February 26, 2015 by Neil deMause
Link

The Los Angeles Times’ Tim Logan, who has been doing excellent work on St. Louis Ramsowner Stan Kroenke’s Inglewood stadium plan (and I don’t just say that because he usually seems to interview me), had a long story yesterday headlined “Stadium economics: How building a venue in Inglewood makes financial sense.” So how does it make sense, exactly?

  • Sports economist Rod Fort says it’s a good deal for Kroenke if he can make enough money on the associated non-stadium development: “It’s more like a real estate development than a stadium.”
  • Sports economist John Vrooman says the Rams could bring in an extra $100 million a year in “sponsorships, marketing and premium seating” in L.A. as compared to St. Louis, calling a move “an economic no-brainer.”
  • Sports economist Victor Matheson says Kroenke could rent out and Inglewood stadium for concerts and the like, but “there’s just not that many 60,000-plus person events.”
  • I call spending $1.86 billion just to get uncertain revenues “a huge, huge risk.”
Fort’s and Vrooman’s points are the most viable arguments for a privately funded Inglewood stadium making sense for Kroenke, so let’s take them one at a time. First off, the real estate development at Hollywood Park might well bring in enough revenue to make a stadium-plus-development deal turn a profit — but then, why saddle it with a potentially money-losing stadium when the rest of the development was already approved and ready to go? Kroenke had to pay his development partners (no one knows how much) to buy into the bigger plan, and it doesn’t make sense that they’d voluntarily give him a lot more in revenues than he’s paying them to buy in, since a stadium doesn’t especially help them any.

As for the extra $100 million a year from being in Los Angeles, that is the big question: Precisely how much value does the L.A. market have to an NFL owner? We’ve heard that number before, on the San Francisco 49ers‘ move to Santa Clara, but we’ll have to wait till the new Forbes numbers come out this summer to see if they agree. We can use the Forbes numbers another way, though, to see how reasonable this is: What are the Rams revenues right now, and what would adding $100 million a year mean?

According to Forbes, the Rams were dead last in the NFL in revenue in 2013, at $250 million. (Being dead last in the NFL in revenue is still a pretty lucrative gig.) Adding $100 million would mean they’d have to jump to 5th in the league in revenue, behind only the Dallas Cowboys,New England Patriots, Washington Unmentionables, and New York Giants. That’s conceivable, I suppose, but I’d still call it a huge risk, even if maybe the Forbes figures might make me willing to lop off one “huge.”

And then, would even $100 million a year be enough to make a $1.86 billion stadium a good investment? Kroenke could presumably knock off some of that price tag with PSL sales (figure $300-400 million), naming rights (about $200 million in present value), and possibly NFL G-4 money ($200 million max). That leaves only a little over a billion dollars to pay off, which $100 million a year would cover, but without much left over for a return on investment. At best, then, Kroenke would be putting up more than a billion dollars out of pocket, plus whatever he’s spending on stadium land and a share of the associated development, for a return that he could get by putting his money in a decent stock index fund. (Okay, and increasing the value of his asset, which admittedly could come to a bunch — the Giants are worth about a billion dollars more than the Rams right now, according to Forbes, though the Giants also aren’t saddled with $1.86 billion in stadium debt.) And if there’s any significant relocation fee required by the NFL, then forget it.

Add it all up, and I would just suggest that the Times’ headline writers should have made one tense change: “How building a stadium in Inglewood could make economic sense.” We’re talking hypotheticals here, and everything would have to go Kroenke’s way for a $1.86 billion stadium to pay off for him. Or to put it another way: It’s a huge, huge risk.
It is a risk. It's a ton of money to put up.
 

tahoe

Pro Bowler
Joined
May 19, 2014
Messages
1,664
I agree that will take a long time to make that billion back, sure the team value will go up but that will only help Kroenke if he sells the team and he doesn't sell teams. Plus having a 84,000 seat stadium is great and all but if the Rams aren't winning the stadium wont be sold out. Plus you have to add in the relocation fee it will take Kroenke 10+ years just to break even. I mean what do I know, the Rams could move to LA next season but to me it just doesn't make sense, spend $1-2 billion with a 10+ year return on investment or spend $400 million with a much faster return on investment.
 

LosAngelesRams

Hall of Fame
Joined
Mar 11, 2013
Messages
3,092
Ha! I was going to ask what Davis intended to use for money to build the stadium. The land would be great and all but he'd still need to build the stadium.

nah man, he'll just build some big bleachers and paint lines on the dirt, save himself a couple hundred mill to spend on those strippers. :ROFLMAO:
 
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