New: Latest on Kroenke, Rams and NFL in STL

[den-the-coach]

This thread is getting away from us time to shake up a tad.

 

[mr.stlouis]

I think everything falls in line with the "build it and they will stay" approach for STL. NFL agrees...

I still don't buy Stan footing the stadium bill himself. I'll believe that stadium is anything more than leverage when it's built.

LA and STL are in a holding period to see what happens in OAK and SD. But I still think the Rams stay regardless.

 

[Prime Time]

RmsLegends and his red color font banned by his own request.

 

[ZigZagRam]

Wow. Where to begin with all this. The format would be difficult for me to do a point by point so I will just try to lay it out there. I also am going to leave St Louis and Carson and Oakland out of it for the most part in the interest of simplicity.

It is not that I don't want to listen to you - quite the contrary. It is more that I don't see where you are getting much of the info that you seem to assert as dead facts. But I can't exactly say you're wrong because I don't know I'm right either. Just my hunches and what I've seen happen. I think a key point here though is that Spanos honestly doesn't want to leave the SD market. So here goes:

The state made infrastructure districts much easier to enact by local gov'ts in order to expedite the process and get it to a vote of the public. The 55% vote hasn't changed but the ability of local gov'ts to get it on the ballot has been streamlined.

To step ahead in your post a bit, the idea that low voter turn out is a hindrance to passing a tax measure historically is untrue. I was involved in several measures and one of the measures we passed included a stipulation that tax increase measures could only be put on major election ballots. The reasoning was that because voter turn out was low, it was easier for special interest groups to rally their troops or simply remain quiet and get them passed. In my experience, the exact opposite of what your quote wants to push is reality. The easiest way to pass something - especially tax increases, is during voter apathy elections.

Getting a loan from the county would be easy if the county sees a potential upside - especially in the form of ongoing taxes that would continue after the payoff date. If the county is participating, they could potentially be receiving revenue from the deal ad infinitum.

I completely disagree that the Padres are more important to San Diego residents. Not sure there is a way to really assess that but I know that in the Padres games I've been to, there were more Dodger fans. I've only been to a Pirates Padres game other than that and we could pretty much change our seats at will. The Chargers - even tough their stadium is allegedly antiquated have always sold very well from my experience.

The previous dealings have been pretty confrontational but it looks like the county and city are getting a bit more serious - similar to what St Louis appears to be experiencing albeit in a much shorter time span. Fabiani seems to be a real sore spot with both the city and the county so I would agree that he is not helping things much. But Spanos has allowed that and I have the feeling he will be marginalized if things progress as I suspect they will.

SDSU currently shares the Chargers stadium and will likely continue that with a new stadium. Their ticket sales will come into play as a revenue stream.

The county has already cited how the bridge loan could be viable with future development revenues. I don't see that as being a huge obstacle.

The hospitality industry has been an obstacle but I've seen numerous times where they end up having to settle for room taxes and other traqnsient fees they didn't want or agree with in other areas and I don't see them putting up as much of a fight if the burden is shared and it puts them in a little less powerful of a position. A couple well placed community leaders and they come to the table if - for example - some of the revenues are targeted toward pulling in more tourism as was done with the CVC.

$15 million over 14 years isn't a huge outlay and IF a vote does come up in Carson, that will likely only light a fire under those involved to move more swiftly. Money spent in Carson could be a better investment in SD than money spent in SD itself.

PSLs? If they go modest in their projections, it could be enough to finish off funding. I am still not sure that they do a hell of a lot better in Carson if we are talking about percentage of overall project even though they claim otherwise.

I didn't buy Spanos' claim of the 25% when he said it and I still don't. Even if true, he is not going to lose all of that no matter who moves into the LA market. Spanos wants anyone to buy what he's selling, he can open his books. But we both know that ain't gonna happen.

In short, I still fully expect the Chargers to remain the San Diego Chargers.

You would've saved a lot of time by saying that you simply want to ignore what the Chargers are outright saying about the unlikelihood of working things out based on past failures. They've been dealing with this specific issue for 14 years through multiple avenues. As far as I know, you haven't.

Regarding the Padres, keep in mind what Oakland's mayor said about the A's. 81 games v 10. What do you think brings more revenues to a city?

 

[LesBaker]

February 26, 2015[/URL] 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.

That pesky little piece of reality about a fee finally gets mentioned in an article.

 

[iced]

That pesky little piece of reality about a fee finally gets mentioned in an article.

and to top it off, he also missed on a big point

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.)

Teams that relocate aren't eligible for the G4 loan

 

[LesBaker]

and to top it off, he also missed on a big point



Teams that move out of state aren't eligible for the G4 loan

I had forgotten about that, though the big one really is the fee.

Houston commanded 700 million in 1999. What will LA command 16 years later? Adjusted only for inflation and not the potential market value (which is a big guess anyway) 700 mil is right around a billion in today's money based on online calculators. Then factor in the value of teams and the NFL in general and it could easily be 1.5 billion.

If anyone sees SK spending that kind of out of pocket money, between the cost of the stadium and the fee, to move the Rams raise your hand please.

 

[mr.stlouis]

I had forgotten about that, though the big one really is the fee.

Houston commanded 700 million in 1999. What will LA command 16 years later? Adjusted only for inflation and not the potential market value (which is a big guess anyway) 700 mil is right around a billion in today's money based on online calculators. Then factor in the value of teams and the NFL in general and it could easily be 1.5 billion.

If anyone sees SK spending that kind of out of pocket money, between the cost of the stadium and the fee, to move the Rams raise your hand please.

There is just no way that happens.

 

[LesBaker]

There is just no way that happens.

I don't see it either and that's one of the two big reasons I think SK isn't really going anywhere. I still think he's going to build in STL. I see him going to the city and saying "give me that land and tax abatement's and I will build it myself".

I think the Raiders are the most likely to move to LA.

 

[Young Ram]

It's my understanding that the Rams had the option to get out if the dome fell out of the top 25%. Not that the CVC was absolutely required to keep it there or else.

http://en.wikipedia.org/wiki/Edward_Jones_Dome

Under the terms of the lease that the Rams signed, the Edward Jones Dome is required to be ranked in the top tier of NFL stadiums through the 2015 season. If it is not, the Rams are free to break the lease and either relocate without penalty or continue to lease the dome on a year to year basis.

The original 30 year lease was terminated. They have now gone with a yearly contract with the same terms. The CVC was required to meet the lease terms OR ELSE the Rams could break it and leave STL.

That's like saying the Rams broke a contract with Langford when they released him. No, they just exercised the option available to them within the contract.

That's exactly what they did. They 'broke', or for a better term, terminated his contract.

 

[RamFan503]

You would've saved a lot of time by saying that you simply want to ignore what the Chargers are outright saying about the unlikelihood of working things out based on past failures. They've been dealing with this specific issue for 14 years through multiple avenues. As far as I know, you haven't.

Regarding the Padres, keep in mind what Oakland's mayor said about the A's. 81 games v 10. What do you think brings more revenues to a city?

Spanos and his barking dog say a lot of things. Many of them I would chose to ignore. And don't pull this "As far as I know, you haven't" BS. Much like your snippy comment to Bluecoconut it is just weak. I can only guess that I have watched the Spanos Chargers saga closer than you. I have several very good friends that are die hard Chargers fans and they have been my second favorite team for most of my life. I view Spanos' Carson deal as an attempt to push the issue more than an actual attempt to build there. Time will tell.

But the things being said by community leaders are different than during "negotiations" of the past. There has actually been some momentum prior to this and I think possibly more than anything, Spanos sees his opening. The hurdles are anything but insurmountable.

I will agree with you on the number of games thing for the Padres. The difference though is you don't see the mass of people milling around when baseball is going on like you do with football. Is it enough? Maybe not by itself. But the people down there seem to be way more into the Chargers than they are the Padres. Having a workable deal like it appears they are now working on, while also supposedly having the leverage of another site, could very easily be what changes the game.

So you can choose to ignore the latest revelations if you choose. But they are moving toward a resolution far faster and more in earnest than ever before.

 

[RamFan503]

That pesky little piece of reality about a fee finally gets mentioned in an article.

Except that the league has pretty much dismissed the idea that it will be that high while saying they don't have an actual figure. They want a team in that market. You can't use an expansion fee and extrapolate it out to a fee that would be charged to an existing NFL franchise for moving there.

 

[Sum1]

I really don't understand how people don't understand the difference between being promised something and terms of an agreement. The contract between the Rams and St. Louis was never breached, broken, bent, anything. The stadium isn't in the top 25%, therefore the terms of the lease have converted to a year to year agreement rather than a 30 year term.

Using wording such as, "St. Louis promised the stadium would be in the top 25%..." suggests they didn't hold up their end of the deal and broke the contract...simply not true. At this point in time the terms of the lease could have gone one of two directions. It did.

 

[mr.stlouis]

I don't see it either and that's one of the two big reasons I think SK isn't really going anywhere. I still think he's going to build in STL. I see him going to the city and saying "give me that land and tax abatement's and I will build it myself".

I think the Raiders are the most likely to move to LA.

Makes a lot more sense to do it that way. His leverage and silence is working.

OAK apparently has something going with their stadium talks. I haven't heard anything on SD. Who knows with them two. I think OAK needs to go to LA because the stadium they're talking about is on 55,000 seats. That's a packed house in STL. Overall, the outcome of these discussion appear bleak with no public funding. STL is proposing far more than those two cities. It's all the more reason for them to stay once the financing lines itself out.

Wouldn't surprise me to see Stan come to the table at the last minuite when his leverage is at it's peak.

 

[8to12]

There is just no way that happens.

I have to question the amount of $ that is being mentioned here.

In 1995, Rams paid a 29-Mil relocation fee + another 17-mil of PSL funds to the league in return for the approval to move to St Louis.

NFL Owners OK Rams' Move to St. Louis
April 13, 1995|T.J. SIMERS | TIMES STAFF WRITER
IRVING, Tex. — The Los Angeles Rams are history, officially gone from Anaheim to St. Louis after winning the National Football League's blessing Wednesday with a $46-million payment.

In addition to a $29-million relocation fee, the Rams agreed to pay $17 million from the proceeds of personal seat licenses, which are one-time fees for rights to buy season tickets.

Then, not too long after, Modell was charged a lesser amount for moving to Baltimore. However, you could say some of the costs were offset by what the Browns paid as an expansion team.

From: STADIUM AUTHORITY DISPOSITION OF REVENUES FROM PERMANENT SEAT LICENSES (PSLS) February 13, 2002

The schedule listed the following categories of expenditures2 by the Team: Relocation fees paid to the NFL $ 21,800,000 Improvements to Owings Mills training facility 517,600 Costs of design and construction of new training facilities _____ Design, construction, furnishings and leasehold improvements of PSINet Stadium 7,690,400 Severance, relocation bonuses and other direct relocation costs 8,052,900 Cleveland Municipal Stadium lease termination and leasehold improvements 11,550,000 Berea (Ohio) practice facility lease termination 9,898,500 Payments to the Maryland Stadium Authority 12,665,900 Forfeiture of the Ravens’ share of the Cleveland net expansion fee proceeds 15,749,900 Total gross expenditures $ 87,925,200


I can see an expansion team paying a fee of 700-Mil, but not a team that is relocating.

The league would make a team pay a relocation fee that is almost the same value as the entire franchise? IMO, it doesn't make sense.

 

[bluecoconuts]

Man - I was great at math but absolutely hated Algebra. Please don't make me think of Algebra.

There's almost always a way to solve for X, you just might need to get creative.

I still don't buy Stan footing the stadium bill himself. I'll believe that stadium is anything more than leverage when it's built.

I thought it was leverage, but the problem I have with that, is that if it is indeed the case, then Stan must not be a very good negotiator, and that seems even more unlikely. St Louis has put forth the Riverfront plan and only the Riverfront plan. If Kroenke wants more than that, then he's not getting it, as St Louis doesn't appear to be changing things up. Granted they're just worried about the land, and that can change, but the financing is all in plan for that stadium. If that's the stadium Stan wants, then why continue with the LA business? If that's not the stadium Stan wants, but he wants to remain in St Louis then why not counter with his own plan? I don't totally discount the idea that it's leverage, but if he waits until the NFL says no, then he has no leverage there, and if he never makes any counter then he's not using his leverage either. I'm hoping he does make a counter sometime in the next few months though.

I had forgotten about that, though the big one really is the fee.

Houston commanded 700 million in 1999. What will LA command 16 years later? Adjusted only for inflation and not the potential market value (which is a big guess anyway) 700 mil is right around a billion in today's money based on online calculators. Then factor in the value of teams and the NFL in general and it could easily be 1.5 billion.

If anyone sees SK spending that kind of out of pocket money, between the cost of the stadium and the fee, to move the Rams raise your hand please.

I don't think it'll cost as much as expansion did, so just randomly estimating numbers as high as 1.5B doesn't really seem realistic. The Rams paid what 29M in relocation fees in 95? That's about 45M today. If you add in the 17M from PSL it came to a total of 46M, which in 2015 dollars is about 70.5M. The Oilers (the last team to relocate) paid about 27M in relocation fees. However, knowing that the Chargers and Raiders can't do the same thing, Stan could theoretically offer up 200M+ in relocation fees to outbid them though. If he really wants LA that badly, it's certainly not out of the question. If the NFL were to come to Stan and say relocation fees are in the high hundreds of millions of dollars, he could say that given previous fees, that's a bit steep and out of the question. If they were to say something as ridiculous as 1B, he could (and my guess is would) sit back and say something along the lines of "Cool, so how do the Chargers and Raiders pay this fee to move to LA? Because if they don't have to pay it, then I got a nice fat lawsuit for you" which means either they're priced out of LA (and thus the Rams are free to move and file anti-trust suits) or they need to back down on the cost for him as well. A 100M relocation fee I can see, it's not totally out of the question, it's roughly equal to 65M in 1995 dollars. That would still likely price the Chargers and Raiders out of LA, however it's not something totally insurmountable as 500+ or 1B dollars.

The G4 loan not being available for relocation potentially stops the Raiders and Chargers from going, so if they change it for them, it would change for Kroenke as well. However with everything else (G4 loan, all that good stuff) the Chargers and Raiders are still apparently a few hundred million dollars short, that doesn't factor in relocation fees. While those are significantly less (typically) than expansion fees, if Kroenke offers the NFL a nice chunk of change, they may not want to pass that up. It would all depend on how much Stan really wants to move to LA, ultimately money talks though, and of the three he's the only one who can get it done on his own, and outbid everyone else to have them agree to a move. I'm not sure if it would come to that, or if he would really want to, but if he wants it that bad, he certainly has the capability to open his wallet and make things happen.

 

[RamFan503]

I really don't understand how people don't understand the difference between being promised something and terms of an agreement. The contract between the Rams and St. Louis was never breached, broken, bent, anything. The stadium isn't in the top 25%, therefore the terms of the lease have converted to a year to year agreement rather than a 30 year term.

Using wording such as, "St. Louis promised the stadium would be in the top 25%..." suggests they didn't hold up their end of the deal and broke the contract...simply not true. At this point in time the terms of the lease could have gone one of two directions. It did.

I can see your point Sum. The thing I don't follow is the reasoning that Stan now has to enter into a deal on the new stadium that is substantially different than the deal he signed onto that got the team to St Louis. I also don't believe that KD is attending the meetings and sitting back and not saying anything. I still expect the Rams to stay in St Louis but I have to wonder under what kind of terms and what the final design ends up being. But I don't agree with the notion that Stan is bound to St Louis if they want to play hardball and force him into a contract that he doesn't like.

 

[8to12]

Makes a lot more sense to do it that way. His leverage and silence is working.

OAK apparently has something going with their stadium talks. I haven't heard anything on SD. Who knows with them two. I think OAK needs to go to LA because the stadium they're talking about is on 55,000 seats. That's a packed house in STL. Overall, the outcome of these discussion appear bleak with no public funding. STL is proposing far more than those two cities. It's all the more reason for them to stay once the financing lines itself out.

Wouldn't surprise me to see Stan come to the table at the last minuite when his leverage is at it's peak.

You think there's no way that Kroneke would pay the hefty relocation fee to move to LA, yet you propose the Raiders to move there. The Raiders are valued at approx 785-Mil and you must also propose that they pay the same Fee that Rams would in same post, yes?

 

[RamFan503]

There's almost always a way to solve for X, you just might need to get creative.

Nah man - there's NEVER a way to solve for @-X-

 

[mr.stlouis]

I have to question the amount of $ that is being mentioned here.

In 1995, Rams paid a 29-Mil relocation fee + another 17-mil of PSL funds to the league in return for the approval to move to St Louis.

NFL Owners OK Rams' Move to St. Louis
April 13, 1995|T.J. SIMERS | TIMES STAFF WRITER
IRVING, Tex. — The Los Angeles Rams are history, officially gone from Anaheim to St. Louis after winning the National Football League's blessing Wednesday with a $46-million payment.

In addition to a $29-million relocation fee, the Rams agreed to pay $17 million from the proceeds of personal seat licenses, which are one-time fees for rights to buy season tickets.

Then, not too long after, Modell was charged a lesser amount for moving to Baltimore. However, you could say some of the costs were offset by what the Browns paid as an expansion team.

From: STADIUM AUTHORITY DISPOSITION OF REVENUES FROM PERMANENT SEAT LICENSES (PSLS) February 13, 2002

The schedule listed the following categories of expenditures2 by the Team: Relocation fees paid to the NFL $ 21,800,000 Improvements to Owings Mills training facility 517,600 Costs of design and construction of new training facilities _____ Design, construction, furnishings and leasehold improvements of PSINet Stadium 7,690,400 Severance, relocation bonuses and other direct relocation costs 8,052,900 Cleveland Municipal Stadium lease termination and leasehold improvements 11,550,000 Berea (Ohio) practice facility lease termination 9,898,500 Payments to the Maryland Stadium Authority 12,665,900 Forfeiture of the Ravens’ share of the Cleveland net expansion fee proceeds 15,749,900 Total gross expenditures $ 87,925,200


I can see an expansion team paying a fee of 700-Mil, but not a team that is relocating.

The league would make a team pay a relocation fee that is almost the same value as the entire franchise? IMO, it doesn't make sense.

At a minimum, Coles said it's 500 million. That's the lowest number I've heard, the very lowest. Things have changed in 20 years.