UNDATED: In this rendering released by AEG the proposed football stadium to house a NFL team in Los Angeles California is seen. It was announced February 1 2011 that AEG has sold the naming rights for the proposed stadium to Farmers Insurance Group for $650,000 calling the stadium "Farmers Field." (Illustration by AEG via Getty Images)
As was reported ad nauseum during several local news broadcasts yesterday evening, and in this morning's Los Angeles Times, the Los Angeles (LA) City Council voted unanimously to move forward with Anschutz Entertainment Group's (AEG) proposal to rebuild part of the LA Convention Center and build a new football stadium in downtown LA, adjacent to the Staples Center.
The new facility, Farmers Field, is currently projected to open in 5 years, provided that the framework of the deal doesn't blow up over that time. As far as San Diego is concerned... does this mean we're losing the Chargers?
More below the jump...
The Deal - In Broad Strokes.
Before we begin to discuss the Chargers, let's briefly look at the outlined deal between LA and AEG. At this point, the project is expected to cost about $1.5 billion, $275 million of which will come from public investment through bond sales. AEG also has a naming rights deal in place with Farmers Insurance Group, which is expected to pay $700 million over a number of years. AEG would then pick up the rest of the tab.
As the LA Times article states:
Approval of the deal framework puts AEG in a better position to deliver on its plan to open the 72,000-seat stadium in five years and show the NFL that the company has overcome political obstacles, said AEG Chief Executive Tim Leiweke. "It sends a very strong message to the NFL owners. We did it. We were unanimous," he said.
Additionally, of concern to San Diego, is the possibility that a renovated LA Convention Center will be directly competing with San Diego for the biggest conventions. I'm sure that LA would love to gets it's hands on Comic-Con, especially considering how the event has increasingly become a focal point for Hollywood in their promotion of upcoming films.
Now, about the Chargers...
You can say I'm looking through rose-tinted glasses, but I am still skeptical that the Chargers are the team that is most likely to move. This is based on the following:
- The Spanos family wants to stay in San Diego. They've said it for the last 15 years, and considering the lack of serious discussions to move the team during those 15 years, I think they've earned the benefit of the doubt for now. Never mind that they've explored new stadium options in Mission Valley, Downtown, Oceanside, Chula Vista, National City, and even Escondido.
- The Spanos family DOES NOT want to sell a controlling interest in the franchise. The discussions we heard earlier this year about Alex Spanos selling some of his stake in the team to AEG was primarily based on expected estate tax increases, which Spanos did not want to pass off to his children. When the Bush tax cuts were extended last winter, it removed the need for Spanos to sell his ownership stake to outside interests. Furthermore, AEG has said in the past that it would want a controlling interest in any franchise that relocated to LA and played at Farmers Field.
- I don't think the Spanos family wants to pay a relocation fee that has been estimated as anywhere from $500 million to $1 billion. It's essentially the same fee that that the league charges whenever an expansion team comes in (this was the fee Robert McNair paid when he got the Houston Texans).
Countervailing that optimistic assessment, is this section of Sam Farmer's LA Times article, written yesterday..
So which team is most likely to move?
San Diego is the clubhouse leader. The way I see it, the Vikings will get a deal done in Minnesota, and it will be more difficult than people think to extract the Jaguars from Jacksonville or the Bills from Buffalo.
The Rams could be the second team to return to L.A., but they can't move from St. Louis until 2014, and that doesn't fit with AEG Chief Executive Tim Leiweke's timeline. As for the Raiders, they're too polarizing — people love them or hate them — and AEG is banking on this deal to help them sell top-dollar condominiums at L.A. Live. Telling potential buyers the Raiders will play 10 games a year there won't necessarily be a selling point.
Will it be easy for AEG owner Philip Anschutz to make a deal with the Chargers?
First of all, the Spanos family won't give up controlling ownership of the team. Insiders say the family and Anschutz are far apart on how much of the team he should own, and how much he should pay. He's looking for a deep discount, and Chargers President Dean Spanos isn't likely to go for that, no matter how dazzling the L.A. stadium might be.
Are the sides eventually going to agree on a price?
Here's betting they do, providing it gets that far. That price disagreement would have to be pretty bad for Anschutz to spend $45 million on an environmental impact report and plans for a stadium, training center and Pico Hall, and then walk away at the altar.
As always, the big question is the city of San Diego. Occasionally, we hear about big ideas for a stadium project that never really get off the ground. Occasionally, we hear ideas that seem to make sense, until competing agencies start bickering over the money and protecting their pet projects.
Folks on the San Diego City Council, you are out of time. The dithering and the blather has to stop. The passing of the buck on to the next elected group of people - in hope of avoiding blame - wont work anymore. Either you want the Chargers, or you don't. Stop grousing about investing public money in a private franchise - how about finding a way to make the investment work by creating jobs and building new tax bases?
I really don't think that the Spanos family WANTS to move to Los Angeles. But if you folks at City Hall can't get it together, the Spanos family will eventually make a business decision... and you'll get the nightmare of T.J. Simers' piece about Philip Rivers and the Los Angeles Chargers coming to pass.