Who Will Root for the Los Angeles Chargers?


Chargers owner Dean Spanos is a complete and total disgrace.  By respectable media outlets, he has been called a “coward“, a “villain“, the “masturbating security guard of NFL owners“.  Blog commenters and keyboard cowboys on Twitter have called him things that are sometimes even worse than that.  Moving the Chargers from San Diego to Los Angeles on the surface makes no sense.  The Chargers are part of the fabric of San Diego and have played there for over 50 years.  The fans put up with the mediocrity on the field and poor ownership decisions while maintaining their loyalty.  San Diego and Imperial Counties (where they are clear cut the most popular team) total about 3.5 million people and Orange County (which they split with the LA market) has over 3 million.

On the financial side, the NFL offered to pay around $300 million towards a new stadium in San Diego and they are demanding Spanos pay a $650 million relocation fee to move the team.  In Los Angeles, the Chargers will be a tenant of Stan Kroenke, won’t own any of the real estate around the stadium and will be required to contribute their income from Permanent Seat Licenses and Naming Rights towards the cost of construction.  Unlike San Diego where they have a monopoly on NFL teams, they have to split Los Angeles with the Rams, the Raiders (which used to be in LA), and many other teams likes the Packers, Steelers, Giants, and 49ers due to the transient nature of the population and the fact that they have not been locked into any one team for over 20 years.  They will also miss out on a lot of ticket sales and luxury box sales opportunities over the next 2 seasons as they play in the small Stub Hub soccer stadium.

Professional sports teams generally aren’t massively profitable when you look at them from a return on assets or return on equity basis.  The Green Bay Packers are the only publicly-traded NFL team and they made their highest profit ever in 2015 at $48.9 million.  The Chargers probably make closer to $30 million per year in operating profit.  However, Dean Spanos got the team for free from his dad, who paid $80 million for it.  Forbes recently estimated its value at around $2 billion.  Moving to LA will supposedly make it worth $3 billion, due to it being in a much larger market with bigger corporate sponsors and a larger population of fans to draw from.  He is now supposed to make much more money when he sells the franchise one day.

The increase in value sort of assumes that the Chargers and LA will have a normal relationship of team and city.  This premise may be flawed as no one in LA seems to be a fan of the Chargers  or want them to move there.  San Diegans will receive immense peer pressure not to support this Benedict Arnold organization that just stabbed them in the back and moved to their hated big brother rival city.  The Rams are more of a real LA team and there is no geographic separation like you have with Chicago Cubs/White Sox (North Side/South Side) since they will both be playing in the exact same stadium.  Even becoming the 3rd most popular team in LA behind the Rams and soon-to-be Las Vegas Raiders may be a stretch.  Twenty years from now when the Inglewood stadium is perhaps not as shiny and new, and stadiums become less of a big deal as television and virtual reality get better, it could get worse. They could have had a monopoly in San Diego, but instead they chose to be 4th, 5th, or 6th fiddle in Los Angeles.  Dean Spanos will spend the rest of his days as a complete pariah like Art Modell was in Cleveland.  We shall see if it was worth it.

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