Business winners, losers in Rams’ relocation to L.A.

It’s official, the NFL is back in Los Angeles. Although the NFL’s L.A. relocation committee recommended the competing Carson project 5-1, the Rams’ Inglewood proposal won convincingly among owners. After final presentations were made secret, the tune changed –as did the votes– and the Rams led in votes, 20-12, essentially ensuring they would win the relocation race.

There are still some things to be figured out, most notably what happens with the Chargers since the team has right of first refusal to move to L.A. with the Rams. Oakland still needs a new stadium — even though the product on the field has improved, which does not have an effect on which team was chosen to stay in its current market or move– but business-wise their situation is untenable. Let’s take a brief look at the business winners and losers. We’ll try to keep the commentary short.

Winners

Stan Kroenke

Rams owner Stan Kroenke. (Mark J. Rebilas-USA TODAY Sports)
Rams owner Stan Kroenke. (Mark J. Rebilas-USA TODAY Sports)

Kroenke has battled opposition at almost every turn, but he still won the day and secured his relocation bid. The franchise value of the Rams will definitely shoot up in the next Forbes rankings and Kroenke now owns the only team in the United States’ second-biggest media market. The Rams won’t have a hard time finding corporate partners and Kroenke’s real estate holdings will increase in value through the surrounding area’s sports-anchored real estate development.

The NFL

Credit: Kirby Lee-USA TODAY Sports
Credit: Kirby Lee-USA TODAY Sports

If the NFL punted on this and pushed the decision off a year, that would have been more bad PR piled on what it has received from other recent missteps. League leadership needed to have this decision go through, and a 30-2 bid is pretty remarkable with that many strong-willed owners. The Inglewood bid also included new NFL property the league can use for its media arm and a West Coast headquarters.

Los Angeles

Credit: Kirby Lee-USA TODAY Sports
Credit: Kirby Lee-USA TODAY Sports

The city gets a new state-of-the-art venue without dropping a dime on construction costs. There could be tax breaks here and there, but nothing close to what St. Louis was offering or what San Diego is voting on. The new stadium will help create temporary jobs and drive more events to the city. It also won’t hurt L.A.’s Olympic bid.

Oakland and San Diego

(Gregory Bull-AP Photo)
(Gregory Bull-AP Photo)

The cities now have a chance to keep their teams. Oakland has already stated it won’t contribute public money, but if the NFL can assist Mark Davis and the Raiders, it might be in everyone’s best interest they stay. The 49ers stadium in Santa Clara is a solid 40 miles from San Francisco and the Raiders could own the Bay Area crowd if they can figure out a new stadium and improve on the field. San Diego has an upcoming vote on whether to assist the Chargers with public funds.

Los Angeles Coliseum

 

Credit: Kirby Lee/Image of Sport-USA TODAY Sports
Credit: Kirby Lee/Image of Sport-USA TODAY Sports

The historical Los Angeles Coliseum will host the Rams for at least the next three years. That’s an extra boost of revenue to a venue that is going through refurbishments and construction improvements.

Potential Losers

Dean Spanos and Mark Davis

Dean Spanos, owner San Diego Chargers. Credit: Kirby Lee-USA TODAY Sports
Dean Spanos, owner San Diego Chargers. Credit: Kirby Lee-USA TODAY Sports

It’s really difficult to call any one of these groups outright losers. There is still a lot left to be figured out, but the disappointment was apparent for both Davis and Spanos yesterday. They lost out on the second-biggest media market in the U.S. and Spanos could lose fan market-share if he stays in San Diego. Even a move as the secondary tenant — or owner — in L.A. will be controlled and negotiated by Rams ownership that have already secured everything it needs in Los Angeles.

St. Louis

AP Photo/St. Louis Post Dispatch, Chris Lee
AP Photo/St. Louis Post Dispatch, Chris Lee

For all the talk about how difficult the decision was for the NFL to leave St. Louis, the Rams and the league did so with public money on the table. That is an amazing precedent because normally the NFL wants to reward cities that work with the teams on new venues. St. Louis is possibly a relocation option but the Raiders have reportedly balked at that idea for now. St. Louis is now the first city to lose two NFL teams to relocation.

Carson

la-sp-2015-carson-stadium-lightning-bolt-20150423

The City of Carson had to think it was the leader in the clubhouse, especially after the relocation committee vote. Now it has to decide what to do on the 168-acre parcel of land earmarked for the stadium.

Hardline family ownership faction

Credit: Thomas B. Shea-USA TODAY Sports
Credit: Thomas B. Shea-USA TODAY Sports

Jerry Richardson — owner of the Carolina Panthers — was very vocal about his support for Spanos’ Carson bid. Mark Davis also comes from a historical NFL/AFL family ownership tree. The lesson everyone learned is that money talks, and Kroenke has it in spades from his Wal-Mart relationship. Owners such as Mike Brown, Mark Davis and Dean Spanos are being overrun by savvy business-owners who made their billions elsewhere.

Rose Bowl

Credit: Gary A. Vasquez-USA TODAY Sports
Credit: Gary A. Vasquez-USA TODAY Sports

It may not make sense at first glance, especially because the Rose Bowl didn’t even submit a RFP — request for proposal — to the NFL for games to be played at the venue, but hear me out. The Rose Bowl is the biggest, most important venue in Los Angeles. Come 2019, it will have to compete with a newer, more technologically advanced, and fan friendly –especially in terms of getting to the stadium — venue. NCAA College Football Playoff National Championship games will most likely be played at the newer stadium. Concerts and other large events will look at both venues. Soccer matches, marquee games — would they ever move USC-UCLA or the Pac-12 Championship to a neutral field — and big events just got another option. The Rose Bowl is the granddaddy of them all, but it just got a new young competitor.

There is still a lot to be figured out. The NFL is back in Los Angeles with the Rams relocation, and the business ramifications will continue to be felt for years to come.

Michael Colangelo is Managing Editor of The Fields of Green and Assistant Director at the USC Sports Business Institute.

Follow @MikeColange or @fog_sports on Twitter and like our Fields of Green Facebook page for updates

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.