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NFL begins work on setting relocation fee
By Jim Thomas
In another indication of the growing momentum to have an NFL team in Los Angeles, the league has begun the process of establishing a relocation fee for the team — or teams — that might move to LA for the 2016 season.
“We’ve engaged an outside firm to help us look at various ways to analyze it,” NFL executive Eric Grubman said at least week’s owners meetings in San Francisco. “Which is not to say our finance staff is not capable of doing any of the analysis. But sometimes it’s good to have an independent mind take a look at it.”
The fee, Grubman said, could vary from market to market. The Rams in St. Louis, the Chargers in San Diego, and the Raiders in Oakland are all eyeing a possible move to LA after the 2015 season. When all is said and done, there could be a formula developed to set the fee. Or there simply could just be a flat fee determined.
“We’re not very far along in that,” Grubman said. “It’s sort of designing the analysis, and we’re debating the different ways that it could be looked at and the different time frames that could be looked at.”
The relocation fee is designed to compensate club owners for allowing another team to move into a new, lucrative market and basically gets split up among the other teams. It has been estimated that the relocation fee for a Rams move back to LA could be in excess of $500 million for team owner Stan Kroenke.
Grubman said any relocation fee probably wouldn’t be determined until very near the end of the entire relocation process.
“Anybody’s who’s getting into it or asking for a vote would be understanding of what it is,” Grubman said.
Just curious — Did Georgia have to pay a
Relocation fee back in 95 ? What was it?edit: yes. http://articles.latimes.com/1995-04-13/news/mn-54268_1_rams-owner
TJ Simers – LA Times
April 1995IRVING, Tex. — The Los Angeles Rams are history, officially gone from Anaheim to St. Louis after winning the National Football League’s blessing Wednesday with a $46-million payment.
In addition to a $29-million relocation fee, the Rams agreed to pay $17 million from the proceeds of personal seat licenses, which are one-time fees for rights to buy season tickets.
Twenty-three of the 30 league owners must approve a franchise move, and they voted 22 to 6 in favor Wednesday, with the Los Angeles Raiders abstaining. Rams owner Georgia Frontiere, who had been asked to remain outside during the special meeting, was then called on to cast the deciding vote.
“I thought about it for a few minutes,” she joked.
“My grandmother had a saying: ‘Go little where wanted, go not at all where little wanted.’ And that’s about the way it’s been (in Anaheim). I think they will be better off too,” Frontiere said.
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vI have no idea what the fee will be. 500 M might be on right the money. But, doing the rule thumb 7 year doubling rule for future worth compared to the 29 million from 20 years ago would put it approximately 100 million and then double it for the bigger market value -glamour factor would make it about 200 million. I’m sure that anyway you slice it, it won’t be cheap. I’d guess Stan’s money will likely buy votes – as per usual.
I’m getting ‘more’ mentally lazy in my old age. Actually, the doubling rule of thumb thing would have it at 30 X 2 = 60 X 2 = 120 X 2 = 240 so 240 Million is approximate answer and then add to it whatever the LA market glamour factor. If one doesn’t think it’s worth much, let the Los Angeles Angels of Anaheim owner know that too.
a lot of it would apparently be done through psls. that relocation fee could be financed partly through that. some doubt it can actually be done. especially a team entering a new market although it could be argued that being in san diego they have a regional presence.
http://www.latimes.com/business/realestate/la-fi-stadium-goldman-20150524-story.html
Just a P.S.
In Bernie’s piece about the marketing survey in St. Louis, he mentioned a survey – not only of fans – but of corporations.
You can bet the NFL is doing that in LA, too.
Which stadium/team do you like better? How much will you pay for a suite? How much will you pay to have the stadium named after you? How much will you pay, pay, pay for this, this, this?
And they are going to add up all the dollars from Inglewoodland, and all the dollars from Carson, and if there is a clear winner, then there is a clear winner. And that you can take to the bank.
laram commented on this. they did do a survey in los angeles, and i think the rams and chargers came out on top. i’m not sure who was the more favorable of the two but the raiders definitely came last.
i’m not sure which site was more favorable although i don’t know that carson was actually in play at the time. maybe it was. but i can’t see how carson would be a more favorable site among sponsors. supposedly carson is the more favorable site within the nfl. but if the corporate dollars speak out in favor of inglewood, i’d imagine they’d change their minds very quickly.
my guess is inglewood would be more favorable among corporate sponsors. geographically it’s just closer to los angeles proper than carson. you have venice, santa monica, west los angeles, beverly hills, brentwood close by. leimert park, baldwin hills, and inglewood itself are undergoing massive gentrification. it’s also going to be closer to the concert venues they have planned in that area. it’s going to be a bigger attraction among young people with money to spend. carson isn’t.
so who does the league choose? i would think inglewood, but i’m not so sure anymore.
and can the chargers take on this stadium project by themselves? i really don’t think the raiders will be of any help. if spanos is going to do it, he’s going to have to do it with the help of goldman sachs. and even then there’s some question as to whether their plan will work. a lot of it is dependent on the sale of psls.
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