San Dee-Ay-Go, make that Los An-Gel-Es, Super Chargers?

In finance there is a concept called required rate of return. Let's say Spanos has a five percent rate of return (probably low). So if we apply a little remedial finance he needs to make an extra 32.5 million a year in LA plus whatever Kronecke charges for rent. Let's assume Kronecke charges 10 million a year for 10 games. Spanos has to make an extra 42,5 million, or over four million a game. THe Chargers draw 50k in San Diego with bad teams. I realize there is extra luxury box and other ancillary revenue in LA but is there really over 40 million a year extra, especially for what is probably going to be the number two team? Especially when for the first couple of years they will play in a 27.000 seat stadium.

 

According to the Yahoo! article, the Chargers will pay $1 per year and chip in $200 million for the stadium. Revenue split is not known. What's missing is Kroenke probably makes more money with the Chargers there. Rams revenue takes a hit, but Kroenke makes it up with 10 more home games to fill.

Why the Chargers' move to LA makes financial sense

 

Kevin Acee of the San Diego Union-Tribune really wants to call Dean Spanos a p*ssy. Tough words!

Spanos no fool, just a coward

 

The article uses Forbes valuations. Forbes lists San Diego as worth 2.08 billion and the Rams as worth 2.9 billion. The Jets are valued at 2,75 billion. So if the Chargers become as much as the Jets they appreciate by 670 million. But the article says that Spanos will pay 550 million in relocation fees and have to kick in a 200 million dollar loan from the NFL. So the increased value is offset by the relocation and stadium fee.

Forbes thinks that the Jets have operating profits of 102 million and the Chargers make 59 million. If the Chargers are as profitable as the Jets Spanos makes 43 million of a 750 million dollar investment or about 6%. And I don't think the Chargers will be as profitable as the Jets unless they win a lot. The Jets sell out every game, even when they suck, and I think the Chargers will have to be pretty good to sell out.

 

Lancey, I believe the Chargers' fee is $550M cash or $650M credit, and they will undoubtedly choose the latter. Whatever the exact numbers are, there is no possible way it is a better deal than Spanos just putting his collateral and the NFL's $300M loan toward a new stadium.

The non-football revenue possibilities for a new stadium in San Diego would be amazing. Every stadium concert would stop there, they would be a regular entrant for both the Super Bowl and the CFP, international soccer would love it ... It's an absolute no-brainer.

But they hurted Dean's feelings, so he'll screw himself to spite them.

 

One person could stop this madness: Dick Enberg.

He should just let the team know it stays "or else." Problem solved.

 

Give it 10-12 years and I predict the Chargers will be back in San Diego. One way or another.

 

And the other shoe drops ...
Oakland Raiders file Las Vegas relocation paperwork

 

Well, now it appears the NFL and many of the other owners are upset at the Chargers moving to L.A.

NFL is reportedly upset with Chargers, wants them to move back to San Diego

Gee, guys, didn't you have the opportunity to nip this in the bud a year ago? Instead, you gave them the option to move, and they exercised that option, and NOW you're complaining?

FTR, I completely agree with the main point, but it's stupid for the league to bitch about it now.

 

Educated guess: NFL figured Chargers and San Diego would make a deal, thus clearing the way for the Raiders to leave Oakland for LA. But on top of putting a poor product on the field, Spanos strikes me as being quite toxic in San Diego. Not Modell in Cleveland toxic, more like Bud Adams and Houston toxic.

 

Having two bad teams in LA with the accompanying degrading effect on the teevee slate will probably put a dent in national network ratings and accordingly, ad revenues. So the rest of the owners probably see it costing them money.