SBJ/Nov. 11-17, 2013/Leagues and Governing Bodies

NFL: We have final say in L.A.

Teams warned not to do own stadium deal

The NFL has reiterated to its 32 clubs that Los Angeles is the league’s market and that any franchise seeking to negotiate its own stadium deal in the city could threaten the best economic result for the sport, according to team and other sources familiar with the matter.

The league outlined its points in a memo sent to clubs last month. In that memo, the NFL also cautioned that a team buying real estate in Los Angeles would not preclude the league from moving forward on its own stadium deal. There has been some concern in league circles that a team might squat on Los Angeles through buying land for a potential stadium.

The developments come as several teams, including the Oakland Raiders and St. Louis Rams, are nearing the end of their leases with little resolution in sight in their local markets. That has led to worries in league circles about the league and clubs acting separately, rather than jointly, in talks with the various stadium sites that have long been under consideration in Los Angeles.

Last month’s memo was a clear signal by the league that it intends to control the process of any team relocating to Los Angeles.

The NFL 16 months ago sent a memo to all 32 teams outlining Los Angeles as the league’s province, but one team source said this new directive was “more toughly written.” The new memo, this source said, told clubs that “in order to maximize the value for the entire league … teams going off on their own are not going to achieve the best possible deal.”

Another source, however, said the memo only underscored the obvious: that the league has approval rights in Los Angeles, and so not working in step with the NFL could cause problems. This source also described the memo as being directed at the clubs not interested in a potential move to Los Angeles, saying that several owners had been questioning league officials and wondering if the expiring leases meant teams could quickly move on their own in the Southern California market.

“All it really said to clubs not active in L.A. was, ‘Stay calm,’” this source said.

The San Diego Chargers are among several teams that can move now or when leases run out.
Photo by: GETTY IMAGES
The NFL has shepherded the effort to return the league to Los Angeles almost since the Rams and Raiders departed the city after the 1994 season. Owners have sat through countless updates at meetings on Los Angeles and on the league’s perspective on what it will take to get a deal done — so a wild-card club moving in on its own is enough to spark some unease. The potential revenue of the Los Angeles market is another key element, because if a team were to strike a poor economic deal, it would mean less shared money for the rest of the league.

The Raiders’ lease expires after this season; the Rams’ lease expires after next year. The San Diego Chargers are free to move at any time, though the team would have to pay a penalty to the San Diego stadium district — a fee that decreases with each succeeding year until it expires in 2020.

In an interview last month, Dallas Cowboys owner Jerry Jones expressed optimism about returning the NFL to Los Angeles because of the number of teams with expiring leases. “Probably the most since we haven’t had a team in L.A.,” Jones said.

The NFL’s long-running discussions with AEG over its plans for Farmers Field stadium downtown and with developer Ed Roski over land in City of Industry remain at a standstill, sources said. The NFL’s thinking, according to sources, is that AEG might be willing to move off its demands of having a team as a tenant, with equity, because its rights to build on the downtown site expire next October, under terms of AEG’s agreement with the city. Those plans are contingent on AEG by that time having a team in line to play in the facility once it is built.

The NFL wants a team to have control over the stadium and is balking at AEG’s request for discounted equity in a club.

Said Michael Roth, AEG vice president of communications: “Bringing the NFL back to Los Angeles and to play in Farmers Field continues to be a priority to AEG, and we are working diligently on this initiative.”

Meanwhile, Raiders owner Mark Davis has had discussions with several parties in Los Angeles, multiple sources said, including with Michael Ovitz about his cobwebbed project in Carson, Calif. Ovitz in the late 1990s pushed for a team and stadium in Carson before the league instead awarded an expansion franchise to Houston.

The Raiders could not immediately be reached for comment.

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