Tuesday, October 11, 2011

Looking at which NFL franchise may move to Los Angeles (Part I)

It isn’t a matter of if, but when the NFL will move back to Los Angeles. The question is will it be an expansion team or a current franchise packing up and moving. It looks like one or even two teams could move to Los Angeles once one of the two proposed NFL stadium plans moves forward.

There are no fewer then seven NFL teams that appear to be viable candidates to move including the San Diego Chargers, Minnesota Vikings, Buffalo Bills, Oakland Raiders, San Francisco 49ers, St. Louis Rams and Jacksonville Jaguars.

The biggest reason a current team would move from their current market to Los Angeles would be to increase the value of their franchise. The National Football League remains a good example of sports socialism at its best. A hard salary cap, a shared national television contract that guarantees each team well in excess of $100 million a year, along with other shared revenues.

Forbes Magazine determined the average NFL franchise was worth $1.04 billion. Five of the aforementioned seven teams appear as the least valuable franchises on the Forbes list.

The Minnesota Vikings value is $796 million, Buffalo Bills at $792 million, St. Louis Rams at $775 million, Oakland Raiders at $761 million and the Jacksonville Jaguar are valued at $725 million.

The two other franchises, the San Diego Chargers and San Francisco 49ers are valued at $901 million and $990 million respectively.

Relocating the Vikings is the most plausible. Their current home stadium, the Metrodome opened in 1982 and was built for both the Vikings and the Twins. The facility is below average. The Twins avoided contraction by Major League Baseball by building a new stadium, Target Field.

On December 11, 2010 a combination of an early winter blizzard and high winds resulted in a collapse of the Metrodome’s roof. The Vikings moved their December 13th home game to Detroit’s Ford Field because the University of Minnesota's nearby TCF Bank Stadium had been shut down and winterized for the season and would not be ready in time.

The Vikings current lease expires after the 2011 season. Owner Zygi Wilf has met with AEG’s president and CEO Tim Leiweke about AEG’s downtown Los Angeles NFL stadium plan (the plan that has reportedly been rejected by the NFL).

According to an ESPN report, the Vikings future in the Land of 10,000 Lakes is tied directly too a $1.1 billion retractable-roof stadium in Arden Hills. Wilf is ready to pay 39 percent of the stadiums cost, the balance would be paid by Minnesota taxpayers.

Before the Twins secured the financing for Target Field, Minnesota taxpayers had no interest in building taxpayer supported sports facilities. The Twins changed the landscape, paying $125 million towards the cost of Target Field.

On April 26, 2005, the Twins and Hennepin County announced that a deal had been reached, in which the Twins would pay roughly 1/3 of the stadium's cost, with the rest being paid for by a 0.15% Hennepin County sales tax.

Target Field cost $545 million, according to the Twins. The Hennepin County taxpayers are on the hook for $350 million of it.

A precedent has now been established for taxpayer supported sports facility in Minnesota. However the Vikings are looking for more than $600 million in taxpayer dollars, nearly double the money taxpayers have invested in Target Field.

What is clear for the Vikings and the NFL is the Metrodome is finished.

"I think there's a recognition that we need to find a long-term solution for the Vikings here to get a new stadium built," NFL commissioner Roger Goodell told reporters when the Metrodome roof collapsed last December. "We're all working hard to try to develop those solutions and keep the Vikings here in Minnesota. Our focus is entirely on making sure they're successful in this market."

Vikings' Vice President of Public Affairs and Stadium Development Lester Bagley told the Minneapolis Star Tribune the Vikings waited and watched as the Twins and the University of Minnesota found solutions to their stadium issues.

"This conversation has gone on a long time. The issues are clear. It's time to resolve the issue," Bagley said. "Any further delay only increases the cost for everybody. It's not like we're sneaking up on anybody. State leaders have had ample warning the lease is expiring.

"The good news is, from the feedback we've had on the ground and in conversations with elected officials, we have finally reached a point where state leaders acknowledge the Metrodome won't work and we've got to have the Vikings in this market."

Bagley acknowledged the Vikings might be the team eventually heading to Los Angeles.

"There is no doubt the league and the broader ownership of the league wants a team or teams in Los Angeles as soon as it's feasible," Bagley said. "We're convinced there will be a team or teams in L.A. in the relatively near future.

"The fact that it's a viable organization like AEG that has stepped up and is pushing this, with their success in pro sports and arenas, how they've been able to get deals done, they have the inside track."

The Buffalo Bills are another candidate for relocation. Their current lease expires after the 2012 season, however they can move after the 2011 season if pay a $2 million penalty.

The Bills are owned by 92-year old Ralph Wilson. As long as the Hall of Fame owner is alive the Bills aren’t likely to be going anywhere.

What happens when Wilson passes away?

Speaking to Bills fans before Sunday’s Bills home game, NFL commissioner Roger Goodell made it clear the NFL wants to keep the Bills in Buffalo.

“I promise you I’ll do everything I can to make sure [a move away from Buffalo] doesn’t happen,” Goodell told football fans attending the event.

“To us, it’s all one region,” said Goodell. “While western New Yorkers might not think of it that way, it’s helping make this market be successful here by bringing fans down from Southern Ontario. So we want to continue to encourage that.”

What else would Goodell be expected to say?

When Ralph Wilson passes away, the Bills are expected to be sold. This is when the teams’ future becomes less clear.

Ralph Wilson Stadium was built in 1973 and seats 80,000. Because of the size of the Buffalo market, their expiring lease and long term ownership issues, the team could eventually be sold to an owner without loyalty to the city.

They could see the bright lights of Los Angeles and the potential to double the value of the franchise as too good an opportunity to pass up.

In Sports Business News next Insider we’ll look at the remaining candidates who might move to Los Angeles.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: ESPN, Wikipedia, Yahoo Sports and the Minneapolis Star Tribune

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