LA WATCHDOG--The Los Angeles Rams are returning to Southern California, 35 years after they left Memorial Coliseum for Anaheim and 21 years after ditching Anaheim for St. Louis. But most importantly, the return to the Southland is not being financed with taxpayer money which is why the move to Inglewood does not make economic sense for either the San Diego Chargers or the Oakland Raiders.
The Rams will be playing in an 80,000 seat stadium that is projected to cost $1.8 billion. But this futuristic, high tech venue is only part of a 298 acre, $3 billion entertainment complex that will consist of not only the football stadium, but over 4 million square feet of retail, office, hotel, and high end residential space as well as a 6,000 seat performing arts venue and a 25 acre park.
This entertainment complex that is located in Inglewood, just south of the refurbished Forum that is now managed by New York based Madison Square Garden, is owned by Hollywood Park Land Company, a joint venture between two sophisticated, well-heeled partners, San Francisco based Stockbridge Capital, a real estate investment firm with almost $10 billion of assets under management, and The Kroenke Company, a commercial real estate and development company founded in 1985 by Rams owner Stan Kroenke. This family enterprise controls over 60 million square feet of space, including shopping centers, warehouse facilities, residential real estate and entertainment venues in the United States, Canada, and the United Kingdom.
However, if the Chargers or Raiders decide to relocate to Inglewood, the second team in the market would have to pony up $900 million, an amount equal 50% of the cost of the not-so-profitable stadium. However, this team would not have the opportunity to participate in the upside of the joint venture unlike Kroenke, the owner of the Rams and one of the principals of the Hollywood Park Land Company.
As a result, both the Chargers and Raiders would be better off by staying in their respective cities, leveraging the threat to move to LA with the cities of San Diego and Oakland for new stadiums, saving their $900 million needed for the Inglewood stadium, foregoing the payment of a substantial relocation fee, and taking the $100 million that the National Football League has offered each of them to stay in their existing markets.
The relocation of the Rams to Southern California, the second largest media market in the country, is a huge win for the NFL as the 17 million residents in the Los Angeles metropolitan area (including the Inland Empire) will more than offset of the loss of 3 million people in the St. Louis metropolitan area where the Rams play second fiddle to their beloved Cardinals.
Kroenke will benefit not only from his investment in the Inglewood entertainment complex, but also from the increase in the value of the Los Angeles Rams (v. the St. Louis Rams) over and above the $550 million relocation fee that the NFL will extract from the team.
While the economics of the relocation of the Rams to Inglewood (and not the City of Los Angeles, contrary to the impression left by LA Mayor Eric Garcetti in his Sports Center interview) is of paramount interest to the 32 billionaire owners of the NFL, our question is when will we have winning team? Fans may not be bothered by being forced to buy a personal seat license for thousands of dollars and pay over $100 for a nose bleed ticket, but putting up with another losing team is unacceptable, especially now that the Lakers have lost almost 80% of their games this season.
The Rams have not had a winning record in 12 years. Over the last five years, the team has won less than 40% of its games and over the last ten years, less than 30% of its games. So the question to Stan Kroenke and Coach Jeff Fisher (a home town boy who graduated from Taft and USC) is: “What is the plan to produce a winning team, especially in a division that features the Arizona Cardinals and the Seattle Seahawks?”
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
Vol 14 Issue 6
Pub: Jan 19, 2016