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SAM FARMER / ON THE NFL

Many obstacles remain before NFL returns to Los Angeles

There will soon be a new owner in Jacksonville who may have his sights on L.A. But a move by the Jaguars or any other team won't be easy, as owners figure to make the relocation fee extremely high.

November 30, 2011|Sam Farmer
  • Fans watch the Jacksonville Jaguars play the Houston Texans at EverBank Field in Jacksonville, Fla., on Sunday. The Jaguars may have a new owner, but don't expect them to be looking for a new home in Los Angeles.
Fans watch the Jacksonville Jaguars play the Houston Texans at EverBank… (Stephen Morton / Associated…)

The Jacksonville Jaguars made two blockbuster announcements in rapid-fire succession this week:

Jack Del Rio is out as coach. Shahid Khan will be in as owner.

When you change the coach, you change the face of the franchise. But when you change the owner, that can mean a seismic shift — and a lot of people believe that move is the first big step toward the vacant Los Angeles market.

It makes sense on one level, with Jacksonville being the league's fourth-smallest market, and L.A. being the nation's second-largest market. The move seems like a no-brainer, especially because Jacksonville has long struggled to sell tickets. The team is averaging crowds of 62,000 this season, 26th in the league.

What's more, Khan didn't build his fortune by making dumb business moves. Of course he's aware that L.A. has been without a franchise since 1995, and that competing groups are proposing "can't-miss" mega-venues downtown and at Grand Crossing (City of Industry). Why wouldn't he want to pack the moving vans and find the first onramp to Interstate 10?

Were the route to L.A. just a few MapQuest clicks away, however, a team would have been here by now, long before Wayne Weaver signed the papers to sell the team and teach Khan the secret handshake of NFL ownership.

But ignore the fact Weaver has repeatedly insisted the Jaguars will continue to try to make a go of it in Jacksonville — something Khan has echoed — and that Weaver had previously rebuffed suitors looking to relocate the franchise. It's OK to dismiss those promises. Owners frequently say one thing and do another.

To believe the Jaguars are skipping town is to believe the league's other 31 franchises — run by cutthroat businessmen — are ready to give Khan a clear path to the pot of gold, a locale that will essentially double the value of his team. (According to Forbes, Khan paid $760 million for the Jaguars. Various estimates project the value of an L.A. franchise to be about $1.5 billion.) The NFL also knows it cannot afford to fail again in L.A. It's a big leap in logic to think that the league would hand that opportunity to its newest, least-experienced, and nowhere-near-richest team owner.

You'd better believe the league would slap a hefty relocation fee on any team whose value would take that kind of jump. Teams aren't meant to be flipped like remodeled houses.

Don't you think teams such as the Chargers, Rams, Raiders and Vikings might have something to say about the new guy strolling into L.A. and cutting a deal, especially when the looming threat of that market is their main leverage for getting stadium deals done in their current cities?

Is Chargers owner Dean Spanos, who has spent the better part of 10 years trying to get a new stadium in San Diego, going to passively allow someone to slip into his team's secondary market without lining up votes to block it? In the NFL, you need 24 votes — a three-quarters majority of owners — to get the league's blessing for a relocation. And you need the support of the league to finance a stadium.

The Jaguars also have a stadium lease that runs through 2029. There are ways to get out of it, but it would be costly for the team to buy its way out, and a tangled mess if it tries to go through the courts.

But set all of that aside. Say Khan — or an owner of another franchise — is hellbent on getting to L.A., and willing to take on the headache, expense and risk of such a move. Hey, at some point an NFL owner will do just that.

Then which deal is he going to take, downtown or Grand Crossing?

So far, there are no takers for either. That's not to say those deals can't be tweaked and sweetened. Both Tim Leiweke (point man for AEG's Philip Anschutz) and Ed Roski (backing the Grand Crossing proposal) have shown a willingness to move off their original positions to get deals done.

AEG struck agreements with the city and state, but only by first softening its original proposals. Roski, too, has changed his deal to make it more team-friendly.

Still, neither deal works for the NFL in its current configuration.

If the teams that have talked to AEG are to be believed, Anschutz wants to acquire half a franchise at half-price, seeing as he'll be financing a stadium that costs north of $1 billion. No owner wants to sell a big chunk of his team at a deep discount, and the league doesn't want that either — even if it comes with the big valuation bump of moving to L.A.

Say Khan sold half of the Jaguars for $200 million, and the franchise moved and grew in value to $1.5 billion. In round numbers, his half would be worth $750 million — less than what he's going to pay for the whole team. Of course, there's the inherent value of being in a dazzling new L.A. stadium, and the potential for further growth, etc. But there's very real risk.

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