This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
March 30, 2012
AEG's L.A. stadium still a no-go with NFL
Citing lots of unnamed sources, Yahoo! Sports' Jason Cole says that the NFL has again told AEG that it's Los Angeles stadium plan won't fly if the developer refuses to budge on getting a discounted share of team ownership plus rental payments. And refuse to budge is exactly what AEG owner Philip Anschutz did, according to Cole's sources:
At the meeting, Goodell politely told Anschutz that the terms are unacceptable to the NFL and any of the handful of teams that have been targeted for a potential move to Los Angeles, including the San Diego Chargers. Kraft attended the meeting because he is also very close to Anschutz and does business with AEG. Kraft echoed Goodell's remarks.
As a source explained: “It was friendly, but boiled down to the view that no NFL owner would accept the terms proposed. If [AEG] wanted to get that much control over an NFL franchise, their only option would be to buy a team. If they were willing to back off the control and buy a [limited partnership] stake for a reasonable price, then a shared interest in selling suites/clubs/sponsorships could be worked out."...
However, the meeting with Anschutz has thus far produced zero reaction from the billionaire, according to the sources. In the more than three months since the meeting, the NFL has not received a new proposal from Anschutz or AEG and has not been told of one being sent to any teams.
Now, whenever I see unnamed sources providing scoops, I usually assume it's for their own self-interest — and here, clearly, you could have the NFL putting out word that Anschutz is being recalcitrant in an attempt to publicly push him to make concessions.
According to another unnamed Yahoo! source, though (this one a "Los Angeles-based" source, so presumably not NFL-related), Anschutz may not care so much about whether the NFL stadium actually happens, so long as he's used it to open the door to more development near his L.A. Live site:
The bottom line is that because of that, politicians in Los Angeles may be shifting focus from the stadium project to simply enlarging the Los Angeles Convention Center. The stadium was supposed to be built on part of where the center currently sits and would serve as convention space when not being used for the NFL.
"The end game for this plan was the convention center all along," a Los Angeles-based source said Thursday. "That's what AEG wants to improve because the convention business is going to drive the whole area."
If so ... man, did we waste a whole lot of pixels discussing this. Also, hopefully Minnesota (and other) state legislators are listening, because at this rate, ain't no way the Vikings or anybody else are moving to Los Angeles anytime soon. Which shouldn't really be new news to anybody, but sometimes people need a reminder.
Come on, Neil. You deserve praise for hitting the nail on the head with the assumption that this appears to be an NFL leak, but I think you are mis-reading the situation. The NFL needs L.A. a heck of a lot more than we need the NFL. As the great Donald Trump tweeted today, "The worst thing you can possibly do in a deal is seem desperate to make it." I think that Mr. Anshutz understands that.
I see this as the NFL getting frustrated because they want one-sided terms in the eventual Vikings (and possibly Chargers) move to Los Angeles. AEG will have to move a little bit on their demands for a team, but the reality is that it will end up working itself out in terms pretty close to what AEG is proposing if the Vikings are still dealing with trying to get a stadium approved at the end of 2012.
Posted by Ben Miller on March 30, 2012 01:05 PM
Well, Zygi Wilf doesn't need L.A. more than L.A. needs him. (Except as leverage, but as we've seen, that doesn't need to be realistic to work.) And it's Zygi, or one of his fellow owners, who'd be giving up equity and/or revenues to get this deal done.
The NFL could always kick in to get it done, of course, but that only makes sense if you think an L.A. team would add hundreds of millions of dollars to NFL TV rights. Color me skeptical.
Posted by Neil deMause on March 30, 2012 01:23 PM
The NFL needs an open Los Angeles more than it needs a franchise there. That way each team can threaten to move to LA whenever they don't get their way.
Posted by Harold S on March 30, 2012 05:22 PM
And all this happened after Tim Leiweke went on KNBC. We all know from Jason Cole's past articles he has bias towards the LA stadium group and I call shenanigans on this. this is old news and even footballphds came out on twitter to say so. They wrote the story awhile back this nothing but to paint AEG in bad light after the news conference, EIR is getting released on April 5th. Anybody see the or notice there is a motive here. I wouldn't be surprised if Majestic Reality sponsored this propaganda. AEG has the momentum and the other guys cant have that happen now can they. Now watch this
www.nbclosangeles.com/video/#!/on-air/as-seen-on/LA-Stadium-Plan-Released/144062496
and this www.nbclosangeles.com/video/#!/on-air/as-seen-on/NewsConference--Tim-Leiweke--Pres----CEO-of-AEG--Part-2/144060986
and tell me AEG is a group falling apart. Lets do some home work here
The NFL consistently plays this game with cities. They want to extract more taxpayer money so to enhance the wealth of their members (team owners)and leave others to pay for the real costs. For example, my city has foolishly agreed to assume control of close to $1 billion on stadium related loans based on a proven failed formula of repayment. The assumption is the 49ers will pay for any stadium related shortfalls, but so far that appears to be an emply promise. Los Angeles would be best advised to accept the best deal which doesn't transfer any risk to their taxpayers. I agree with the sentiment the NFL needs LA more than LA needs the NFL.
Posted by santaclarawillbebroke on March 31, 2012 11:46 AM
The NFL consistently plays this game with cities. They want to extract more taxpayer money so to enhance the wealth of their members (team owners)and leave others to pay for the real costs. For example, my city has foolishly agreed to assume control of close to $1 billion on stadium related loans based on a proven failed formula of repayment. The assumption is the 49ers will pay for any stadium related shortfalls, but so far that appears to be an empty promise. Los Angeles would be best advised to accept the best deal which doesn't transfer any risk to their taxpayers. I agree with the sentiment that the NFL needs LA more than LA needs the NFL.
Posted by santaclarawillbebroke on March 31, 2012 11:49 AM
Neil, you make an excellent point that Zygi only needs LA if the NFL sweetens things up considerably.
On the league wanting to keep LA open as a relocation threat, I don't buy that. If you look at ratings in the last year we are starting to see a move away from QB/star-centric games drawing biggest and towards big markets drawing biggest (Tebow vs. Brady in the playoffs drawing the lowest rating of that weekend being the prime example). I think the NFL sees this and they want to get at least one team in Los Angeles in order to keep the momentum if these television rights fees going.
Posted by Ben Miller on March 31, 2012 12:42 PM
Why wouldn't the NFL want a presence in the second largest media market in the country? The league has far more to gain from this than Los Angeles. That city has survived for nearly two decades without an NFL team.
Posted by santaclarawillbebroke on March 31, 2012 02:57 PM
The ratings and market size argument is suspect. The Broncos/Pats game was a blowout as Denver was not competitive in that game. It's understandable that viewers would not be interested in watching a game that was out of reach after the second quarter. Besides, Boston is a big-market whereas New Orleans, Baltimore, Green Bay/Milwaukee- whose teams were playing that same weekend- are not big-markets. Competitiveness, not market size, had more to do with ratings of those games.
The NFL runs the risk of blackouts in L.A. What good is it for the league and networks if the L.A. Whatevers cannot be seen on local TV? With no team in L.A., the best games can be seen in the market. The fact that it has been 18 years since the NFL was in L.A. means the NFL does not need L.A.(except for as Neil wrote as leverage) just as the city does not need the league. Cleveland and Houston- two markets nowhere near as large as L.A.- both received new franchises after losing their original ones while L.A. still has no team. Since the Rams and Raiders left, TV rights fees have ballooned. Last December, the NFL signed record-setting TV rights deals while not guaranteeing a team in L.A.
articles.latimes.com/2011/dec/15/business/la-fi-ct-nfl-deals-20111215
The ratings and market size argument is suspect. The Broncos/Pats game was a blowout as Denver was not competitive in that game. It's understandable that viewers would not be interested in watching a game that was out of reach after the second quarter. Besides, Boston is a big-market whereas New Orleans, Baltimore, Green Bay/Milwaukee- whose teams were playing that same weekend- are not big-markets. Competitiveness, not market size, had more to do with ratings of those games.
The NFL runs the risk of blackouts in L.A. What good is it for the league and networks if the L.A. Whatevers cannot be seen on local TV? With no team in L.A., the best games can be seen in the market. The fact that it has been 18 years since the NFL was in L.A. means the NFL does not need L.A.(except for as Neil wrote as leverage) just as the city does not need the league. Cleveland and Houston- two markets nowhere near as large as L.A.- both received new franchises after losing their original ones while L.A. still has no team. Since the Rams and Raiders left, TV rights fees have ballooned. Last December, the NFL signed record-setting TV rights deals while not guaranteeing a team in L.A.
articles.latimes.com/2011/dec/15/business/la-fi-ct-nfl-deals-20111215
There has not been a new NFL Stadium built in nearly 5 decades in California. Why, because California is a very difficult place to get a new stadium built. So this very much goes to show why AEG's LA Stadium went down the drain...
But on the flip side of the equation it also shows everybody how the Santa Clara Stadium got passed...At every turn this deal has the "stink" of Corruption, Lying, and Deceit on it.
Mark my words 5 years after this thing is built all the Corruption done to get the Santa Clara Stadium built is going to come out, but by then it will be built. My hope is that the NFL will take the 49ers away from the Yorks when they find out the huge part that they played in this BS Stadium Deal. But I won't hold my breath, after all its the NFL...And they are the one who Ok'ed this Crappy deal in Santa Clara!
Posted by truth be told on April 2, 2012 01:23 AM
Of course, people like DW don't do any research and make assumptions. San Diego owns the secondary-rights to the Los Angeles-Orange County market. If San Diego doesn't sell out that game then it's blacked-out on our local TV station, CBS 2. I live here, I know. The NFL wants back into Los Angeles but only under the right stadium deal and if you've been following this story for the last couple years, you should know that AEG & NFL are negotiating in the public. AEG will eventually get a team to move to L.A. They have no reason to spend all this money if they weren't getting some kind of guarantee.
Posted by NFL in LA on April 2, 2012 03:22 AM
DW makes a salient point that the Tebow vs. Brady game was a blowout, but the market sizes played a role. I doubt that anyone who follows NFL ratings patterns would argue that the top QBs mean less than they did when Favre and Manning were the big draws even while playing in small markets.
Posted by Ben Miller on April 2, 2012 03:24 PM