After 19 years of dead ends, the NFL is taking another run at returning to Los Angeles. Solving that riddle will require some creative thinking and possibly an outside-the-box approach.
The league is evaluating various sites in the L.A. area and looking into alternative financing models for a stadium, including paying for one itself as opposed to having an individual owner foot the bill.
“Whatever gets us a team in L.A., that would be awesome,” said New England’s Robert Kraft, among the league’s most influential owners. “That might be the solution. Whatever it takes, I know I’d be willing to support.”
How might the league approach the situation differently? Here are some answers to the primary questions:
What are the two main financing scenarios?
In the first, a club has a stadium site and concept in mind, puts together a financing plan and looks to the league for help. The NFL helps pay for the venue but also assesses a hefty relocation fee. The club then has full control of the stadium.
In the second, the league pays for the stadium, offsetting that $1-billion-plus investment by selling naming rights, personal seat licenses (PSLs) and the like. That becomes the home of one or two teams (perhaps to be named later), who don’t have the astronomical cost of a stadium on their books. In theory, the relocation fee would be smaller because the NFL benefits from those sponsorship sales.
Why would a team want to have a stadium that’s owned by the league?
That’s the pivotal question, and there are a lot of owners who wouldn’t want Big Brother as a landlord. That said, the NFL could make it more enticing by giving tenants control of key revenue streams such as sales of suites, club and general admission seats, local sponsorship and advertising, parking and the like. The challenge for the league would be making the deal attractive enough.
What could be different about a league-owned venue?
If all 32 teams are sharing in the revenue that stadium generates, those teams would probably push to hold major events there. For instance, the NFL has searched for ways to revamp (and pump interest) into the Pro Bowl. What if that annual event were staged at the league’s stadium in L.A.? The league is already considering holding the 2015 draft in L.A. What about moving the scouting combine there? A West Coast hub of the Pro Football Hall of Fame, perhaps? And it’s not a reach to think the league might want to relocate the NFL Network and NFL.com to an eventual L.A. stadium, if one ever happens.
Who would play there?
As soon as a team tips its hand that it’s leaving, it’s dead in its current market. In theory, the NFL could build a stadium without naming the teams that might play there until the last minute, thereby avoiding a lame-duck season. As it is, there’s a very tight window for a team to announce it’s relocating — from mid-January through February — precisely because the team would need time to sell season tickets in its new market. But were it a league-owned stadium, the NFL could start moving dirt at any time and simply say, “Stay tuned.”
Is there another potential revenue stream out there, one the league might harness to finance a stadium?
Yes, Super Bowl PSLs. This idea has been floating around for years, and it’s only a matter of time before it happens. If and when the league establishes a regular rotation of Super Bowl sites — and it’s reexamining how it currently awards cities the marquee game — it can start selling seats years in advance. Well, the rights to seats, anyway. For instance, if L.A. were promised four Super Bowls in 20 years, the league could tell fans, “Pay X-thousand dollars now, and you will have the right to buy a face-value ticket for this seat for all four of those Super Bowls.” You may not like it, and it’s going to be pricey, but there’s a good chance that’s eventually going to happen.
Why would the league want to be back in L.A., anyway?
This market has already lost two teams, and three if you count the short-lived L.A. Chargers. In that sense, it’s about as rock-solid reliable as a Hollywood marriage.
Then again, how well managed were the L.A. Raiders and Rams? At the same time those teams were struggling in Southern California, the New England Patriots were failing in Massachusetts. The Saints were always a mess in New Orleans, and they became hugely profitable with the same owner at the helm. The Seahawks were gasping for air in Seattle — and even briefly moved to Anaheim — before Paul Allen rebranded them.
The NFL says it wants to be back in L.A. The real question is, how much?