Relocation fee to L.A. could cost NFL owner & city upwards of $1 billion

Rams owner Stan Kroenke (left) is building an 80,000 seat stadium in Inglewood.
Rams owner Stan Kroenke (left) is building an 80,000 seat stadium in Inglewood.

Since the Rams and Raiders left Los Angeles in 1995, 22 of the 32 NFL teams have moved into new stadiums with all of them built at Los Angeles’ expense. That includes the Edward Jones Dome in St. Louis where the Rams moved after the 1994 season.

The cost to the City of Angels is the privilege of being the home of a franchise in the biggest and most lucrative entertainment/sports industry: the National Football League.

Los Angeles – the second largest media market in the country also known as the Entertainment Capital of the World – has always been considered an NFL market.

For the last two decades L.A.’s game has been off the field being used as leverage by the owners threatening a move to the City of Angels in the process fleecing their current cities of taxpayer dollars to build these new multi-billion dollar stadiums. This has enabled the value of all 32 franchises to climb to an average of $1.4 billion apiece. That’s a total of $44.8 billion.

The Indanapolis Colts - who parked their team plane at LAX - are one of many teams using L.A. as leverage to get a stadium deal in their current city.
The Indanapolis Colts – who parked their team plane at LAX – are one of many teams using L.A. as leverage to get a stadium deal in their current city.

That “L.A. Leverage Game” for the league is a thing of the past with all these new cathedrals of the gridiron up and running. The St. Louis Rams, Oakland Raiders and San Diego Chargers are the three remaining teams needing new buildings. The Raiders and Chargers leveraging their respective cities with L.A. can’t work because the cities they call home and L.A. are all California cities and are thus subjected to the exact same laws. It’s absolutely known that all government entities in the Golden State will not earmark taxpayer dollars towards sports stadiums. It’s just no fiscally responsible.

For L.A. to get back on the field a stadium needs to be privately funded. Enter Rams owner Stan Kroenke. He’s partnered with the Stockbridge Group in Inglewood and is going to build an 80,000 seat stadium where the old Hollywood Park Race Track sits on his own dime.  Plans are for it to be done in time for the 2018 season with the Coliseum or Rose Bowl a temporary home for a team – or teams – moving to L.A. in the meantime.

Kroenke is buiding his NFL stadium in Inglewood as part of the City of Champions Revitalization Project.
Kroenke is buiding his NFL stadium in Inglewood as part of the City of Champions Revitalization Project.

Estimates are an owner looking to relocate his team to L.A. will have to fork up a fee of half-a-billion to a billion dollars. Were that to actually happen, that cost would be passed down to the L.A. football fan paying outrageous prices for personal seat licenses; a voucher to get you a ticket inside the stadium. Then there’s parking, the actual ticket to the game as well as concessions for food and drinks that would undoubtedly be astronomical all because of this relocation fee.

A team owner willing to move his team to Los Angeles and the fans that have waited a generation to be able to attend an NFL game in their home city SHOULD NOT be subjected to a hefty relocation fee.

The 32 owners have made multi-billions of dollars using L.A. as leverage and will make a great deal more once a franchise or two calls Los Angeles home. That’s WITHOUT so-called relocation fees.

Making an owner pay a billion dollar relocation fee to L.A. pales in comparison to the multi-billions of dollars Los Angeles has netted the league over the past two decades as a leverage piece.

According to Forbes franchise values have quadrupled in the last 17 years when most of the 22 stadiums were built. The Dallas Cowboys top the list at $3.2 billion with the newly crowned Super Bowl Champion New England Patriots coming in second valued at $2.6 billion. Both play in two of the 22 stadiums built since L.A. has been without a team.

Patriots’ owner Robert Kraft purchased the team for $175 million in 1994 which is, coincidently, the last year Los Angeles was home to the Rams and Raiders.  Kraft’s franchise is now worth some 15 times his initial investment.  Thanks partly to the leverage game L.A. was forced to play.

On the field, L.A. has a rich NFL history with the Rams who called L.A. home for 49 years. They played 34 of them in “L.A. proper” at the Memorial Coliseum and the last 15 in Anaheim sharing the “Big A” with the baseball Angels.

The Raiders left their birthplace in Oakland calling the Coliseum home for 13 years before returning to the East Bay after the 1994 season. The Chargers inaugural season in 1960 was spent in L.A. before bolting south for San Diego where they’ve called home for over 50 years.

Since ‘95, if an NFL fan in Los Angeles wanted to see the likes of Tom Brady, Peyton Manning and Aaron Rodgers among others in person, a two-hour and more than 125 mile drive to San Diego, or a five-hour 370 mile drive to Phoenix or an eight-hour drive or $200 roundtrip flight to the Bay Area have been the best options for L.A. fans to see these talents in person. That’s how L.A. used as leverage has affected the L.A. football fan.

Los Angeles has made multi-billions of dollars for all 32 NFL owners off the field and has a rich NFL past on it. Waiving any type of relocation fee to L.A. would be a reward for its football fans who have gone an entire generation without a team to call their own.

 

 

 

 

NFL in L.A.: Inglewood has the land. Rams owner Stan Kroenke owns 60 acres of it

“There is no deal until there is a deal but Inglewood is well equipped for an NFLstadium.”

Members of Bring Back the L.A. Rams listen to Inglewood Mayor James T. Butts discussing bringing the NFL to Hollywood Park. St. Louis Rams owner Stan Kroenke owns 60 acres of Inglewood land.
Members of Bring Back the L.A. Rams listen to Inglewood Mayor James T. Butts discussing bringing the NFL to Hollywood Park. St. Louis Rams owner Stan Kroenke owns 60 acres of Inglewood land.

That’s the message mayor James T. Butts gave an overflow crowd of some 500 residents at a town hall meeting this past weekend, most of whom would like to lure an NFL team to what is known as the City of Champions – Inglewood, CA.

“We have the largest single continuous block of land in Southern California and there is interest in development of some type,” said Butts referring to St. Louis Rams owner Stan Kroenke.

The multi-billionaire Missouri native and Rams’ owner – who has a home in Malibu – purchased 60 acres of land earlier this year that sits between the Fabulous Forum and the now closed Hollywood Park Racetrack. It’s being demolished to make room for a 238-acre residential and business complex called Hollywood Park Tomorrow.

Hollywood Park Tomorrow is part of an almost 300-acre plot of land ready for development with ample parking.

There’s talk that Kroenke could eventually buy more land from the developers of the Hollywood Park Tomorrow project who might consider selling some of those 238 total acres.

“Inglewood is the only city that an NFL owner owns land in and we are very well situated,” explained Butts who was elected Mayor in 2011. “Inglewood is at the center of four major freeways (405 to the west, 105 to the south, 110 to the east and the 10 to the north) and is a mile-and-a-half fromLos Angeles International Airport.”

The St. Louis Rams – who called the Los Angeles area home for 49 years prior to their move to the Midwest in 1995 – are “free agents” if you will after this season.

A top-tier stipulation in the team’s lease with the St. Louis Convention and Visitors Commission(CVC) negotiated by ex-L.A. Rams general manager John Shaw prior to the move, stated that if theEdward Jones Dome (then known as the Trans World Dome) isn’t in the top 25% of all NFL stadiums after 20 seasons, the team goes year-to-year effectively allowing it to move anywhere.

Last year an arbiter ruled in favor of a Rams $700 million proposal to upgrade the Dome, while the CVC’s $126 million plan was ruled not enough to make the Dome one of the top eight stadiums in the league.

And here we are.

Inglewood is known as the City of Champions because of the racetrack, which opened in 1938 and had a 75-year run until it closed last year; the Fabulous Forum which opened in 1967 with its main tenants being the Los Angeles Lakers – who won six NBA Championships while calling Inglewood home until the team moved to Staples Center in downtown L.A. prior to the 1999-2000 season – and the NHL’s Los Angeles Kings who moved to Staples Center along with the Lakers.

Having been without a major professional sports franchise going on 15 years and counting, and with the closing of the racetrack last year, Mayor Butts and the residents of Inglewood – which number more than 110,000 people – would like nothing better than to be the home of L.A.’s NFL team as part of the city’s revitalization and keep that City of Champions moniker.

While all the residents are in favor of bringing the NFL to Inglewood some don’t want the traffic a team and football games would bring.

“It’s just 10 games a year,” said Butts not figuring in possible playoff games, possible college bowl games and the big prize – Super Bowls. He continued, “With any kind of development comes traffic and money. If you don’t want the traffic, you don’t want the money. You can’t have one without the other.”

The newly remodeled Fabulous Forum – owned by MSG Entertainment – is home to world class concerts.

Naming some of the restaurants in Inglewood, Mayor Butts, who spent two decades as an officer in the Inglewood Police Department, explained:

“When the Forum holds major events receipts are doubled and even tripled because of the traffic the events bring.”

While Butts told me he hasn’t spoken to the NFL or Kroenke about a stadium, when the billionaire owner of an NFL team buys 60 acres of prime developmental real estate in the middle of your city, you’re going to have discussions about what he plans to do with it.

To hear more of my interview with Mayor Butts click on the video with this article.

Los Angeles the second largest media market in the country with more than 18 million residents and includes Ventura County to the north, Orange County to the south, the Pacific Ocean to the west, the Inland Empire to the east, and everything in between – has been without an NFL team since both the Rams and Raiders left after the 1994 season.

Many stadium proposals have come and gone over the past two decades in an attempt to bring the NFL back to the City of Angels. None more prominent than AEG’s Farmers Field proposal, which was to be financed privately by AEG in downtown L.A. in conjunction with the remodel of the Convention Center.

In September 2012 the L.A. City Council unanimously approved a deal with AEG to build Farmers Field. Although the stadium is shovel-ready, no ground has been broken because of one major detail: AEG doesn’t own an NFL team.

AEG won’t spend the almost $2 billion price tag to build the stadium without an agreement from any of the NFL team owners looking for better digs in return for a significant percentage of a team.

When I asked an AEG representative – who chose not to be identified – his thoughts on Kroenke’s purchase of 60 acres in Inglewood this is what he told me:

“Farmers Field is still the best option. We don’t think asking for 30 to 40 percent ownership of a team is too much to ask for in return for a new stadium we’re paying for out of our pocket.”

A third of a team for a stadium is a price tag none of the 32 owners is willing to pay.

And the clock is ticking because the deal between the City of Los Angeles and AEG to build Farmers Field expires in October of this year. If AEG doesn’t file for an extension by October 18th, Farmers Field is essentially dead.

When time runs out, the City of L.A. goes to Plan B focusing all its attention on remodeling the Convention Center.

Kroenke has a team, owns enough land in Inglewood to build a stadium, and coupled with ex-Microsoft CEO Steve Ballmer’s recent purchase of the NBA’s Los Angeles Clippers for a hefty $2 billion, the NFL has amped up its efforts to return to L.A.

Considering NFL officials have always toyed with the idea of building a Hall-of-Fame West and a stadium-site NFL Network studio, Los Angeles, home to Hollywood – the Entertainment Capital of the World – as well as Inglewood, is destined to be home to an NFL team sooner rather than later.

And that team could very well be the Rams who playing in St. Louis are ranked dead last in franchise value, according to Forbes. A move to Los Angeles could very well increase their value from the current $930 million to what the Clippers were recently purchased for: $2 billion.

We could all soon find out.

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