Mackeyser
Supernovas are where gold forms; the only place.
- Joined
- Apr 26, 2013
- Messages
- 14,536
- Name
- Mack
Spanos would not be paying relocation fees if he'd stayed in SD. He was already in SD. The point is discussing the downsides to the move he already committed to. The Chargers are on rails now and they must see this bad move until the end.
Spanos can do nothing to salvage the situation here.
Also, playing in a top tier stadium with zero access to significant revenue resources means he will struggle to sign franchise players because he won't have the liquid cash to do it.
Afaik, the escrow must be fully funded, it cannot be leveraged (the NFLPA would never go for that, otherwise a cash-strapped owner could literally be in position to not be able to pay a bonus).
Spanos won't own the franchise forever, no one does.
The problem for the NEXT owner is that the Chargers are at the bottom of fan attendance and revenues, including licensing revenues and the new stadium doesn't increase his income substantially. It may reduce costs, but not so much that the net is substantially better.
Paying nothing in rent doesn't change the revenue model, it simply allows for reduced income. The problem is that the revenue reductions I'd wager are much greater than anticipated. Fans didn't just "get over" the move. They aren't filling StubHub. Even with dirt cheap tickets, they're only close to capacity due to other team's fans seeing a chance to see their team. Once in the new stadium, how many Charger fans are going to pony up for legit expensive tickets? Pretty sure when those numbers come out that they will be abysmal.
As for Spanos' liquid situation, seeing as it will take 5+ years to sort out all Fred Spanos' estate including what to liquidate to pay taxes (the taxes on his estate eclipses the total net worth of all his children combined), the Spanos' are in no position to put, say $80M in escrow when Bosa comes up for his contract or $40M for Gordon.
Bottom line is that the Chargers have very little in liquid revenue that only decreases by the day and Spanos doesn't have the liquidity to simply put out tons of cash (which may have been a big part of why he wasn't interested in SD at all unless they simply gave him everything).
To put it simply, even paying $16M in rent in SD was far better insofar as their revenues eclipsed that by a fair margin.
Reducing the rent to nothing does improve their cash flow a little bit and it would have been quite a lot IF they still garnered fan support. With so little fan support, that revenue number plummets.
Why's that a problem? The differential was greater in SD, so they are netting less money now. Moreover, they have less access to supplemental or ancillary income like parking and concessions which could also extend to concerts and other events. THAT's the benefit of owning.
The Spanos' are so boxed in that the only thing that can save them is the one thing they will never have thanks to this move...fan support. The TV contract and opposing fans aren't enough to save them.