San Diego to the Chargers: Hasta la Vista!

Pound sand, Deno. That’s the message emanating from the San Diego commentariat to Chargers owner Dean Spanos when it comes to the team’s quest for a new stadium. Either build the stadium yourself, without any public contribution whatsoever, or pound sand. Go to Los Angeles. It’s where you want to be anyway, right?

The commentariat has decreed that the Chargers don’t really need a new stadium in order to remain in San Diego. But if it’s that important to them, let them take full financial responsibility for it. They’re billionaires. They can afford it.

It’s an asinine position to take, and demonstrates a complete lack of understanding of the issue, or an unwillingness to look beyond preconceived notions.

Let’s get one thing straight: There will be no new stadium built in San Diego without some sort of public component. That’s the reality; that’s the nature of being the #28 media market in the U.S. with a limited corporate sponsor base. And with a net worth of $1.2 billion–$955 million of which is the Chargers—the Spanoses do not have the resources to finance it themselves.

The San Diego Chargers cannot survive financially in San Diego long term without a new stadium. That’s a fact. And if they don’t get one, they will be forced to move. They will have no choice. The Chargers are not only competing with the rest of the NFL on the field of play, but they are also competing financially. And in a grotesquely outdated Qualcomm Stadium, they cannot compete financially with 29 of the 31 other teams all playing in newer stadiums. Only the Raiders and New Orleans Saints play in stadiums of comparable age, and the Louisiana Superdome underwent a complete overhaul after Hurricane Katrina tore it apart in 2005.

The newer, modern stadiums are in and of themselves revenue generators. From the digital signage and ribbon boards that can be customized for each event, giving the organization all kinds of freedom to get creative with in-stadium marketing packages, to the premium seating and luxury suites, to the more efficient and strategically placed concessions, all enabling each tenant to maximize its revenue potential. This is not possible in Qualcomm Stadium, which relies on stationary signs and outdated video boards. And that doesn’t take into account the poor sightlines in Qualcomm, the obstructed view seating, and the dilapidated state of the old concrete hulk, diminishing the game day experience of the paying fans.

There’s also the $15-$18 million hole Qualcomm Stadium blows into the City’s general fund budget every year to consider. With a new building, the City would actually have a chance to at least break even, if not turn a small profit. That’s not a guarantee, mind you, but at least it’s a distinct possibility. Instead, San Diego annually gushes red ink when it comes to the ‘Q.’

Meanwhile, the nature of the San Diego market places limitations on the Chargers’ potential revenue. The San Diego region is home to roughly 3.3 million people (including Imperial County), 3.5 million if the Southern Riverside County cities of Temecula and Murrieta are included. Compare that to the 14 million in the Greater Los Angeles area, the number two media market in the country.

NFL team net profits come primarily from the local revenues they can generate, and San Diego is limited in that regard, putting the city and the team at a distinct disadvantage in comparison. San Diego is home to five Fortune 1000 companies (two Fortune 500); Los Angles is home to 15 Fortune 500 companies; San Jose and the Bay Area combined are home to 53 Fortune 1000 companies. There just isn’t the economic base here to make a completely privately funded facility feasible.

To be clear: If the Spanos family really wanted to move the Chargers to Los Angeles, they could have done so at any time in the last several years. There are two shovel ready stadium projects ready to begin construction in L.A., one in the City of Industry and another in Downtown L.A. All either project needs is a team to commit to becoming a tenant and they’ll break ground. Contractually, the Chargers can opt out of their Qualcomm Stadium lease every year between February and May until the lease expires in 2020. The team would only have to pay a lease termination fee, starting at $56 million in 2009, falling on a sliding scale until 2020, when the team would owe the city $3.5 million. (If the team leaves in 2016, they would owe the city just over $15 million to terminate the lease.)

If they really coveted Los Angeles, they would already be gone.

If the team remains in San Diego, the best they could possibly hope for is to climb from the bottom of the league to the middle of the pack in revenue and valuation. Dean Spanos knows this, and he’s content with it. The team doesn’t need to be in the top 10 financially in order to be competitive on the field and in the stands. But they need a new stadium to even put the middle of the pack within reach.

The sentiment against using public funds to build a stadium is understandable, even justifiable. But that sentiment should be held against the value of having the Chargers remain a part of the San Diego community, hosting periodic Super Bowls, NCAA Regionals and Final Fours, a potential MLS team and future World Cups, and various other events the stadium will bring to San Diego, not to mention SDSU Aztecs football and the two college bowl games that will disappear along with Qualcomm Stadium.

If the prevailing point of view is still against any kind of public investment, that’s fine. It’s the voters’ prerogative and an acceptable and legitimate position. But let’s then end this charade, stop wasting everyone’s time and the Chargers money and allow the team begin its future in a new city. There’s no point in drawing this out any further, perpetuating the false notion that the Chargers can go it on their own. Shake hands and part ways amicably. If the City is not willing to participate financially, there’s no point in discussing it further.

The Chargers will get their new stadium, whether it’s here or elsewhere, and San Diego will survive without the Chargers. But it will never be the same, as a huge part of our culture and identity will have gone with them. And it will permanently mar our image as a forward thinking, dynamic, business friendly city that companies actually want to call home. That’s reality.


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