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Chargers Stadium News: San Diego Battles Goldman Sachs

Goldman Sachs serves as both the Chargers' investment banker, and as a paid consultant for the St. Louis Stadium Authority. And, in this case, they're the perfect foil for Kevin Faulconer and the City of San Diego.

Will Goldman Sachs allow the Chargers to stay in San Diego?
Will Goldman Sachs allow the Chargers to stay in San Diego?
Mario Tama/Getty Images

Before continuing on, you really need to read this piece by of Voice of San Diego's Beau Lynott, regarding Goldman Sachs' (Goldman) position in relation to the Chargers, the Rams, and Chargers Special Counsel Mark Fabiani.

For those who won't read the piece, here's the short, short version:

  • Goldman is the Chargers' investment banker, and they're bankrolling the Carson stadium project.
  • Goldman is a paid consultant for the St. Louis Stadium Authority.
  • Goldman  hired Fabiani a few years ago to help with their PR when facing potential Securities Exchange Commission (SEC) fraud charges.
  • The NFL's lead on Los Angeles, Senior VP Eric Grubman, used to work for Goldman.

Excellent, now that you've all read the piece (or the recap), let's plug in the most pertinent paragraph.

"If the Chargers end up with a San Diego stadium solution, Goldman Sachs will have done their duty to their client, in that they would have helped them reach a satisfactory outcome. But will Goldman act as an honest broker if they are involved in negotiations to build a stadium in San Diego? It would go against their own financial interests in Los Angeles and St. Louis. They stand to gain much less if a stadium is built here (in San Diego)"

First off, Goldman is accustomed to getting its way. This was an investment firm which essentially put a loaded gun to the head of the world economy back in 2008 to get its money:

"(Goldman) was going to pull the pin not only on AIG, but on the financial universe if someone (emphasis in original) didn't come up with the money it felt it was owed by AIG" - Matt Taibbi, Griftopia. Pg 116.

That being said, there's no greater villain for an elected official to rail against than big business, especially when the business in question is universally detested as one of primary actors in the Great Recession, one which received billions (which has been paid back) in bailout money from taxpayers, and one which is notorious for cycling former employees into government, then back into the company.

Simply put, this allows local government to play the hero for San Diego, trying to save Chargers from being sucked up by the "Vampire Squid."

Secondly, any time Fabiani issues a criticism of the Citizen's Stadium Advisory Group (Stadium Group), the City can issue a counter-attack against Fabiani. Even better, these aren't hollow attacks. These are legitimate questions regarding conflict-of-interest, and they do honestly call into question whether the City even has a chance of reaching a deal with the Chargers. For instance, the next time Fabiani goes on the offensive, the City could counter with:

  • "Who does Fabiani really represent? Given his history with Goldman, is he working for Mr. Spanos or a group of greedy Wall Street banksters?"
  • "We have to wonder if Fabiani will even consider giving San Diego a fair chance at the bargaining table. Will his old friends at Goldman allow it?"
Thirdly, this allows the City to counter-attack without attacking Dean Spanos directly.

Lastly, as far as Spanos is concerned, he's also in a position to play the hero - by reaching a deal with the City and holding off whatever pressure Goldman is inclined to place on him.

Author's Note: the phrase "vampire squid" is attributed to Rolling Stone's Matt Taibbi, while the term "banksters" is attributed to talk-show host Thom Hartmann.