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Chargers' value would increase with move to L.A.

Forbes says the L.A. Chargers would become the eighth most valuable team in the NFL, at $1.2 billion.

September 07, 2011|By Jim Peltz
  • A move north to L.A. by running back Ryan Mathews and the Chargers is likely with two proposed NFL stadium plans in place.
A move north to L.A. by running back Ryan Mathews and the Chargers is likely… (Christopher Hanewinckel…)

If the San Diego Chargers eventually move to the Los Angeles area, the NFL franchise could see its value jump by at least $200 million.

So concluded Forbes as the magazine Wednesday unveiled its annual ranking of how much the 32 NFL teams are worth.

The Chargers' value was estimated at $920 million, or 23rd highest in the league, a 1.4% increase from $907 million the prior year.

But with two competing proposals to build a new NFL stadium, if the Chargers moved to Los Angeles or an L.A. suburb, it "would increase the team's value by at least $200 million," or 21.7%, the magazine stated.

That would lift the Chargers' value to $1.12 billion and make it the eighth most valuable NFL team based on Forbes' latest ranking.

The Dallas Cowboys, with a value of $1.85 billion, were the most valuable NFL team for the fifth consecutive year. The Washington Redskins ($1.56 billion) were second, the New England Patriots ($1.4 billion) third and the New York Giants ($1.3 billion) fourth.

Overall, the average NFL team was worth $1.04 billion, also up 1.4% from last year, Forbes said.

A move to Los Angeles would boost the Chargers' value for several reasons, analysts said: A new stadium would offer more lucrative sponsorship opportunities, the larger population offers a wider customer base for premium ticket sales and the team would draw heightened media attention.

Los Angeles is "a stronger market for corporations and others to spend money at the stadium," said David Carter, executive director of USC's Sports Business Institute. "Any team relocating to Los Angeles would likely find itself in the top quartile of teams" in terms of NFL valuations.

But it's the Chargers, currently controlled by the Spanos family, who are considered the leading candidate to move if one of the two stadium proposals actually results in a new venue.

One is a stadium in downtown Los Angeles next to Staples Center backed by billionaire Philip Anschutz's AEG sports and entertainment concern. The other is a stadium in City of Industry backed by billionaire developer Ed Roski.

"The Chargers are only going to move to L.A. for a better stadium situation, and that would increase the value of the franchise," said Forbes Senior Editor Kurt Badenhausen.

Forbes noted that though the Chargers have a favorable lease at Qualcomm Stadium in San Diego, the facility was built in 1967 and "lacks modern amenities and sponsorship opportunities."

A new stadium generally "lends itself to more types of club areas that can be sponsored for companies that want to reach high-end clientele," Badenhausen said.

And, "The corporate base in L.A. is enormous relative to some of these other markets" and thus a deeper potential reservoir for an NFL team looking to sell higher-priced seats and sponsorships, he said.

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