The Los Angeles Chargers are struggling mightily to sell personal seat licenses at their new home in Inglewood (slated to open in ’20). One high ranking team executive said that Dean Spanos’ organization is +/- $350 million short of their initial $400 million target. Rams owner Stan Kroenke is understandably upset about his tenant’s inability to move PSLs. Those revenues along with a $200 million NFL G-6 loan are supposed to go towards the new venues’ constructions costs (+/- $5 billion) and he’s is responsible for the difference.

Leaving emotion and stadium talk out of it, and knowing what we know now about lack of PSL sales, did Chargers move make any economic sense at all?

Allison Ratzlaff

It was a Terrible decision.  The Value of the team is suppose to go up, and they can pretend that the value went up because they are in a market that is exposing them more, but the market wont cover them. Look at it this way and I will try to be unbiased. Ticket sales- They sale tickets at stubhub and the opposing fans snatch up those tickets so either way they make money, BUT part of that money has to come in concession and Merch.  So concession sales plus ticket sales have to be split in one way or another with the soccer stadium since they are renting that space.  So the 100% revenue that the chargers get to keep is Merch sales. Merchandise - The problem here is if 85% of your fan base is driving up from San Diego to watch these games they will not be buying merchandise that represents Los Angeles.  I have heard 100s of fans who say I will sport my SD Charger gear but will never buy La charger gear.  Now take into account all the opposing fans, if you have a 26,000 seat stadium and about 18-20,000 of those fans are opposing fans, they are not buying charger merch either. TV ratings- pretty simple no one is watching in LA so the brand exposure and tv deals will be problematic. PSL - The short of it like Allie said, they haven't even met their quota even after lowering their PSL 80% almost fire sale them.  Stadium - The Spanos believe this will solve their problems Financially and with fans in the LA Market. The fans will come in hoards and hand over their money to the spanos they are just waiting for a stadium.  Final thought (sorry for the long post) I really believe that with 3 prime time charger home games (2 at "home") The NFL Nationally will see how unwanted the Chargers are in LA which will be addressed at the owners meeting and I can imagine Stan Kronke is going to get really  fed up and address the issue of not selling PSLs.  call it wishful thinking, but I have seen crazier things happen, but I would not be shocked if the NFL and Kronke came up with a proposal to give the chargers their 650 mill relocation fee back, the 200 million promised earlier and Kronke to buy them out of their contract with the stadium.  If he is going to have to make up the money for their lack of interest it might be cheaper for him to buy them out and get them out of his stadium.  Like I said sounds wishful, but at this point it doesn't seem that far fetched!

Guys night Lab (Jesus)

As much as I hate to say it, probably did for Spanos. They get to pay $1 rent and get to keep game day revenues and play in a cool new stadium. Their PSL sales would have mostly went toward the building anyway, so who cares if they sell or not. Might as well sell as many tickets as they can to opposing teams fans game by game. This league also splits tv revenue, so again, they bring nothing to the table, but can leave with equal portions as everyone else. If the NFL steps in and changes the rules (as they can and totally have done before)  and makes Deano bring more to the table, I think this is a different conversation. This, plus how they keep saying they’re playing the “long game” makes me think they’ll probably do this for 20 years or however long the lease goes, with the hope a Ballmer type will come in and over pay once the San Diego Chargers become a part of historical archives previous generations left behindsorry for the long post

Kenneth Moore

The move was doomed to fail from the start. The SD vs. LA animosity should have been considered from the beginning. Dean stated that 20% of his fans came from LA , what rational CEO would trade 80% for 20% of a developing market ? The man is a bumbling clumsy idiot that Inherited a subsidized gold mine yet will eventually run it into the ground.

TuRockShow

Raul Fontes

Yes, when they sell the franchise within the next year's, they will have added an extra billion to their coffers than if they had stayed in SD. I truly believe they have never had any intention of building anything in LA and will be looking to sell the team once the new stadium opens.

Christopher Moreno

VERIFIED

I think for the Short term if for sure did, because there in LA whic his a bigger market. And just like mentioned above when they sell the team soon its worth more then it is.The crappy part is in the long term.

Derrick McQuinn

Chargers, Rams, and Raiders were in the bottom 5 for their valuations just a few years ago. Rams are now in the top 5, Raiders are around 12th, Chargers are 21st. Nobody likes them in LA.

Ken Foster

The move was a mistake. They could’ve used that relocation money and the 300 million and build their own stadium in MV

Bubba

At some point Dean will sell and he will get more selling a team in LA

Michael Johnson

Isaac Ramirez

This is what doesn't make the most sense: seeing opposing fans overrun your little soccer stadium each home game. For 3 seasons now, the Chargers have had these optics to look at, and after the Steelers game last Sunday, I think the players are starting to become really frustrated with lack of home-field advantage. For an owner, making money on opposing fans' ticket sales is one thing, but it's clearly another when the entire country talks about the lack of support for them in LA. Move back to San Diego, please. And soon!

Mike Krupinski

On the long term I definitely agree that this hurts their value/economics. I also definitely agree with your last statement. Their biggest problem is going to be that I think the NFL will have to force the Spanos Family to sell to get them back/or some where else.

Love your long post! Very thoughtful and informative!

Don't be sorry for long posts! We love the thoughtful response!