Why the Chargers will stay in SD
By Mike Murray
Yesterday afternoon it was looking like the Chargers were headed to LA. The NFL owners gave little support for Oakland returning to the big city and decided to choose the Chargers to partner with Kroenke’s Rams. But then we began to hear rumblings that Dean Spanos did not want to partner with Kroenke. In the end the NFL didn’t care. They awarded LA to the guy with the most money and the shiniest stadium proposal. And to not offend anyone they gave Dean an option to work out a deal with Kroenke or a 100 million to stay home.
Is there hope the Chargers will stay in San Diego. I think there is and here is why.
Kroenke doesn’t want a partner. If it was me I would want the city and market to myself. Why share with anyone? The Chargers would help offset the cost of the stadium but Kroenke is a rich dude. It will come down to what Kroenke wants. I am sure he will put some proposals Dean’s way in good faith, but I don’t think the proposals will include any bargain deals.
Its cheaper to stay. the NFL sweetened the pot yesterday by adding 100 million to the 200 million they already pledged for a stadium in San Diego. Also, if the Chargers decide to leave it will cost them a 550 million dollar relocation fee. (The NFL did not give a direct number on the fee but this is what was rumored earlier.) Right there LA will cost 850 million dollars extra dollars and we have not even talked about what Kroenke will want for the stadium.
Here is the original breakdown of the financing for the proposed stadium in San Diego, before the extra 100 million was added.
Chargers: $300 millionNFL: $200 millionCity Stadium Fund: $121 millionCounty Stadium Fund: $121 millionPersonal Seat Licenses: $60 million ($120 million total – split evenly with the Chargers)Chargers Rent: $173 millionSDSU Annual Rent: $21.6 millionBowl Games Rent: $21.6 millionDeveloper Purchase (sale of 75 acres at $3 million an acre): $225 millionTicket Surcharge: $84.7 millionChargers Parking & Surcharge: $26 millionAdditional funding sources stadium is expected to generate: $50 million
Bottom line on funding…To stay it will cost the Chargers around 300 million with a 173 million dollar a year lease.To leave it will cost the 550 million relocation fee plus about 1 billion to help Kroenke build or an annual lease with Kroenke which I am sure will exceed 173 million.
There is no longer a market to protect. I believe one of the biggest reasons that the Chargers were trying to move to LA was to block the Rams from getting there. And to protect the market share they have there. Now its too late. Whatever market that the Chargers hoped to protect is gone. Moving there would only mean that they lose the base they already have in San Diego and now they would need to compete directly with the Rams for a new market share. Will the Chargers want to compete with Kroenke and the Rams? I wouldn’t. I would stay home. It makes more sense to stay in San Diego and work on marketing your team to the City and to Mexico.
Should they stay or should they go?
It looks like staying would be the best choice, but there is one more thing that must happen. The vote in June must be approved. If the City of San Diego fails to put together a proposal to build the Chargers will leave.
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I would not expect the Chargers to make a decision until after the vote in June. They will want to keep both options on the table as long as they can. Which means that the Chargers will most likely be in San Diego one more year as they need to decide on a location for the 2016 by March.
Hope is alive. and the chances of staying are looking good. Lets hope the voters will show up and support their Chargers.