NFL Owners to Finance and Build a Stadium in LA? Possible but Unlikely
From the here we go again file, National Football League owners want to put a franchise in Los Angeles and according to reports the barons of the gridiron are thinking about financing a stadium. Of course thinking about financing and actually spending league money for a facility that could cost as much as two billion dollars are entirely different matters.
But staying on topic, the NFL actually spending league money on a facility flies in the face of common stadium financing wisdom and could set a dangerous, for the league, precedent. If NFL owners are willing to take money of out their collective pockets in the nation’s second biggest market, why should any municipality pay for a football stadium for the NFL? Recently, the Solons of Jacksonville decided to fund $43 million of a $63 million stadium expenditure for Jaguars owner Shahid Khan’s new stadium scoreboard. Don’t laugh, scoreboards are a big revenue stream for teams and Khan probably will get back his $20 million investment quickly while Jacksonville won’t. The city will get reimbursed for the scoreboard through a two cents on the dollar sales tax hike on hotel and motel guests visiting Jacksonville.
Meanwhile Miami has figured out a way to appease New York real estate tycoon and billionaire Stephen Ross happy. The Miami Dolphins owner will spend his own money renovating the Dolphins’ aging facility which comes out to $350 million and Ross will continue paying property taxes on the barn. But if the NFL awards Ross a Super Bowl, cash strapped Miami will give Ross and the NFL a $4 million gift as a thank you for bringing the “Big Game” to town. The city will also pay Ross $3 million for a national college football championship contest, a measly $2 million for a college football playoff game and up to $1.5 million annually for international sporting events like a soccer friendly featuring say Manchester United or Real Madrid or a team on that level.
If Miami lands a game in the World Cup (Brazilians will be paying for useless stadiums from the 2014 World Cup for decades), the city will give Ross $3 million and if the World Cup final takes place in Miami, it will be $4 million.
Ross is going to win this bet with Miami politicians, as the NFL, college sports officials and international football teams will embrace this deal as soon as Ross gets a canopy on the stadium along with putting new lights and a new sound system in the 27 year old facility. Ross will get at least one Super Bowl because the NFL awards the “Big Game” now on two criteria. One, how much money a community spends in building or renovating a stadium and two, how much money and perks an area is willing to give the 31 owners plus the Green Bay Board of Directors to anchor their annual football orgy in the city.
Miami politicians love to give money to sports owners, just ask Ross, the Heat owner Micky Arison and Miami Marlins owner Jeffrey Loria. Miami, which is not a particularly wealthy sports market because tourism is a main industry and doesn’t have the economic punch that other industries have for sports, is debating how to placate David Beckham who would like to put a Major League Soccer stadium near the waterfront.
Extracting money from municipalities is the name of the game for owners. Right now there are three NFL owners that are seeking greener pastures, whether that is a new or renovated stadium or a new city. The ownership groups of the St. Louis Rams, the Oakland Raiders and the San Diego Chargers franchises are all at the end of leases and can move to LA or London or some football field in the middle of a cow pasture. The Spanos family, the Chargers owners, have looked for a new facility since 2000. Mark Davis and Oakland officials are squabbling because Oakland has not come up with a concrete plan for a new stadium and the Rams’ owner Stan Kroenke apparently has not gotten too far in his bid for a new St. Louis building.
Los Angeles has been a tricky market for the NFL. Los Angeles Rams owner Carroll Rosenbloom took his team to Anaheim in 1980 leaving the Los Angeles Memorial Coliseum. Minnesota Vikings and Baltimore Colts ownership groups kicked the tires at the Coliseum but decided not to buy the old stadium. Oakland Raiders owner Al Davis moved into the facility and battled the NFL for the right to do so and beat the NFL in an antitrust case. Davis’s team played in the Coliseum between 1982 and 1994. Meanwhile the Rams franchise passed from Rosenbloom after his drowning death to his wife Georgia. The two football teams left the LA area after the 1994 season with the remarried Georgia Frontiere taking her Rams to St. Louis and Davis taking his team back to Oakland.
St. Louis gave Frontiere a guarantee that the new domed city facility would kept the Rams in the upper portion of the league in revenues during the 20 year lease that committed Frontiere to St. Louis. In 1995, the stadium was new and the revenue streams were among the best in the NFL, since then St. Louis has not been able to keep up with a wave of new stadiums that came equipped with vastly superior revenue streams. Davis’s move out of LA was much more complicated.
The NFL wanted Davis to stay and got involved in Davis’s negotiations with the owners of the parking lot at the Hollywood Park racetrack next to the Inglewood Forum. The original deal that was cut included five Super Bowls over a ten year period to help Davis pay for his stadium that would have included all the revenue gadgets including club seats, luxury boxes and restaurants. But there was a problem and “the great taffy pull” ended the negotiations.
The NFL pulled back from five Super Bowls over a ten year period to three then one. The NFL then told Davis that a second team would play in the stadium one year after it opened and that Davis would have to share the revenue streams with the other franchise. That was a deal breaker and Davis took Oakland’s offer.
In 1996, Seattle Seahawks owner Ken Behring, frustrated that he was unable to get a move facility in Seattle, announced that he was breaking his lease and moving to Anaheim because of earthquake concerns and whether the Seattle Kingdome was strong enough to withstand an earthquake. The NFL blocked the move.
In 1999, the NFL decided to expand to 32 teams with Los Angeles getting a condition expansion franchise. No one in Los Angeles or Carson, California was able to cobble together a stadium financing plan. The 32nd franchise ended up in Houston with the local population voting to spend money for a new stadium. Bud Adams moved his Houston Oilers to Tennessee following the 1996 season.
Two possible stadiums that were planned in the City of Industry and in downtown Los Angeles apparently are dead. Those stadium ideas join the Carson project of 1999 and a plan to build a stadium in a rock pit in Irwindale in the late 1980s. Irwindale was so sure it could build the stadium that the municipality of about 1,000 gave Al Davis a $10 million non-refundable payment as a gesture of good will. Irwindale never put a shovel in the ground and by 1990 the stadium was dead because of environment concerns and financial trouble. Davis kept the money.
It is hard to believe that NFL owners will forsake municipal dollars and put their collective hands in their collective pockets and pull out two billion dollars to build a stadium. Sports owners are conditioned to take money and local politicians extol the benefits of having a big time sports team in their cities even if it send the city into a financial tailspin. The NFL has a way of telling cities like St. Louis, Oakland and San Diego to get with their needs and using Los Angeles or maybe even putting up money for a dual football-American football stadium in London is a message for those cities and others. Do what we want or else.
Evan Weiner can be reached at firstname.lastname@example.org. His e-book, “The Business and Politics of Sports, Second Edition” is available (https://www.smashwords.com/books/view/365489 ) and his e-books, America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century, (https://itunes.apple.com/us/book/americas-passion-how-coal/id595575002?mt=11 ), From Peach Baskets to Dance Halls and the Not-so-Stern NBA (https://itunes.apple.com/us/book/from-peach-baskets-to-dance/id636914196?mt=11 ) and the reissue of the 2005 book, The Business and Politics of Sports (http://www.barnesandnoble.com/w/business-and-politics-of-sports-evan-weiner/1101715508?ean=2940044505094) and reissue of the 2010 e-book The Business and Politics of Sports, Second Edition (https://itunes.apple.com/us/book/business-politics-sports-selection/id771331977?mt=11 ) are available from e-book distributors globally. 2014 e-book, sports business 2010-14(https://www.smashwords.com/books/view/393652 ). The e-books are available from e-book distributors globally