Commentary

Why Sports Teams Should Move On

by Wayne Friedman , Staff Writer, February 23, 2015

Pick up and move to a bigger market if you are with a sports team. That’s a key way to lift the value of the entertainment franchise, including NFL teams.

Reports are that boththe San Diego Chargers and Oakland Raiders are exploring an unusual deal: moving to Los Angeles and sharing a stadium.

The Los Angeles Timessays the two NFL teams "will jointly pursue" a $1.7 billion NFL stadium in Carson, Calif. That said, the two teams will "continue to seek public subsidies for new stadiums in their home markets.”

Sounds crazy? Here’s why it isn’t. In pure dollars and sense, Los Angeles is a bigger market than either San Diego and San Francisco-Oakland for local TV advertising and carriage deals with local TV providers. LA hasn’t had an NFL team in years.

Still, both teams would have to pay a $250 million penalty to the NFL for doing so. But who cares? Look at the valuations of the likes of the Los Angeles Lakers -- a $2.6 billion value, according to Forbes -- and the Los Angeles Clippers -- around $1.6 billion, nearly a 200% improvement thanks to Steve Ballmer’s $2 billion purchase of the team.

For both the Chargers and the Raiders, there’s room to grow. According to a Forbes report, the San Diego Chargers were valued at $995 million (ranked 26th of all teams); the Raiders were at $970 million (ranked 28th). And consider the dollars to come, as TV advertisers continue to place a premium on live TV, and live sports programming in particular. There are also really big dollars to be made from pay TV providers. For example, the Lakers inked a $4 billion 20-year TV deal with Time Warner Cable in 2012.

For years Los Angeles, the second biggest TV market, has been eyed by many NFL teams -- as well as property developers -- looking to gain big business.

You can, of course, worry that rebuilding a fan base isn’t easy -- as well as the negative karma of abandoning long-time fans But in a competitive entertainment/TV world, looking at every possible niche to make big gains is the rule.

Hey, don’t you favorite TV shows get canceled sometime?

football, sports, tv

6 comments about "Why Sports Teams Should Move On".

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larry towers from nyu, February 23, 2015 at 2:26 p.m.
Who cares where threy move? As long as they do so without public subsidies!!!! And the NFL needs to start to pay some taxes!
Reply

Chuck Lantz from 2007ac.com, 2017ac.com network, February 23, 2015 at 2:54 p.m.

I lived in Oakland when the Raiders franchise was founded, and they played in a community college stadium so close to the freeway that they only had grandstands on one side of the field. I lived in Los Angeles during their time there. The difference between local acceptance by fans in those two locations was huge. Oakland loves the Raiders, and needs them, if only for local pride. L.A. could not care less. Over the next few years, Oakland will very likely lose the Raiders, Warriors and the A's, three teams who have, at one time or another, dominated. Moving them would be tragic for their fans.

Jon Currie from Currie Communications, Inc., February 23, 2015 at 3:06 p.m.

Been there, done that. The Chargers started out in LA, and the Raiders had their shot there. Bottom line, once again both teams are simply using LA for leverage to build in their current markets. Getting tired of this. If the NFL had left NY (for a greater distance than across the Hudson to NJ), the NFL homies there would have gotten a new team in about 15 minutes.

Patrick Boegel from Media Logic, February 23, 2015 at 3:55 p.m.

I feel like we lived through this movie in the early/mid 1980s with the LA Rams and LA Raiders?

I am not sure a city can save either of these franchises of the combined impact of poor ownership decisions and random dumb luck.

Paula Lynn from Who Else Unlimited, February 23, 2015 at 6:35 p.m.

So the non-profits can rip off fans more ? With your own funds, not tax payers, knock yourself out.

Michael Kaplan from Blue Sky Creative, February 23, 2015 at 8:51 p.m.

Agree with the posters above. Billionaire owners of a "non-profit" league can pay for their own damn stadiums. I'm surprised fans still care about pro teams, since it's clear that most pro teams don't give a damn about their fans. There are exceptions, of course: Green Bay, where the fans OWN the team, lock, stock and goal posts.