Chargers: Where to from here?

Does the city owe the Chargers?

The city of San Diego is broke, and the Chargers have a beautiful and serviceable football stadium in Mission Valley for which they only pay $2.5 million per year for 10 games. Plus the Chargers have a rent-free, city-built state-of-the-art practice facility.

And let’s see, Bob Filner is a Democrat. He just won the mayoral election over Doug Manchester’s U-T San Diego-favored GOP candidate, and the billionaire Spanos family has been prominent supporters of GOP causes and candidates for many years.

“The retention of the Chargers ... cannot be paid on the back of taxpayers," according to Filner’s campaign website. "As mayor, my starting point in any negotiation will be that San Diego simply cannot afford to give a billionaire owner half a billion dollars or more to build something that does not directly give back to the financial well-being of the city.

“At a time when we cannot adequately pave our roads, keep our libraries open or our community fire stations fully staffed, the very idea of doling out half a billion dollars for a sports stadium is out of touch with the realities faced by average San Diegans. The price tag for one stadium could fund hundreds of soccer fields, miles of newly paved roads and a host of other desperately needed basic city services.”

The Chargers in 2012

Each year, Forbes Magazine places values on professional sports teams. For 2012, the Chargers are valued at $936 million. This puts the Spanos family as owners of “only” the 24th most valuable NFL team. Incidentally, Alex Spanos paid $70 million for the team in 1984.

Forbes reports the team had revenues of $246 million in 2011 with player expenses at $148 million, and their operating income is listed at only $22.5 million. Meanwhile, the Chargers pay only $2.5 million per year in rent and keep all revenues from luxury suites, advertising, parking, tickets and concessions. The city pays an estimated $12 million per year to operate the stadium, which it also rents for college football, parking (including parking lot car sales) and a few other events.

In 2010, each NFL team received $118 million from their TV contract. In 2012, the NFL will split $4 billion of TV revenue between 32 teams. And the Chargers need the city to provide a stadium?

Reflecting on the past

In the early 1960s, Jack Murphy, a sports writer for The San Diego Union newspaper, began a campaign for a multipurpose stadium for San Diego. A $27 million bond was passed, and construction began. When completed, the facility was named San Diego Stadium. Later the name was changed to Jack Murphy Stadium.

The Chargers played the first game ever at the stadium on Aug. 20, 1967. San Diego Stadium was the principal tenant until 1968, when the Padres began playing 81 games per year at the stadium.

After a successful 1994 season, when the Chargers went to the Super Bowl, the city renegotiated the Charger stadium lease, which at the time was about $3.4 million per year. After the renegotiation, Jack Murphy Stadium was remodeled, making the stadium unsuitable for pro baseball and giving all stadium advertising revenue to the Chargers, even though the Padres played 10 times as many games. It also gave the Chargers the dreaded ticket guarantee of 60,000 seats per game, not including the premium seats. This folly cost the city in excess of $35 million over the next few years.

The future

The Chargers tell us they need a new stadium for several reasons. First, to be “competitive,” which apparently means competitive with the profits of other owners. It essentially means more “state-of-the-art” amenities like super skyboxes for wealthy patrons.

The Chargers say the stadium is in bad physical condition and that it is uninhabitable, which seems fine because no one lives there. For most of us, Qualcomm Stadium is beautiful; well-placed by two freeways; and has a 166-acre, 19,000-space parking lot.

The Chargers argue that it will cost hundreds of millions for San Diego taxpayers between now and 2020 to maintain the Mission Valley location as a stadium. They make a valid argument that taxpayers are giving up millions by maintaining the 166 acres as a parking lot. The Chargers contend that $113 million must be spent to keep the stadium operating through 2020, and that a better use would be to sell the property for development to private interests. They do not mention the plume of oil and gas residue under the property, which drained from the fuel storage area immediately adjacent to the north. Incidentally 166 acres is 7.23 million square feet, in other words very valuable land.

The Chargers have tried to coerce the city to at least partially fund a new stadium for years, and they have an annual exit clause from the Qualcomm lease. Los Angeles proposes to build a new stadium, but the Chargers appear to want to get San Diego to come up with a new stadium —preferably downtown.

But didn’t Petco Park already assist in the renewal of East Village? It certainly is crowded there now. And why waste the huge parking lot? A downtown stadium would have little available parking. The argument of course would be fans could park at Qualcomm and take the trolley as they do for a lot of Padre games. Why not just remodel Qualcomm at the Chargers' expense?

The Chargers probably directly employ fewer than 200 people, few of whom are year-round, and 60 or so are athletes who are largely paid for by NFL profit sharing. So should the city or county build a billion-dollar edifice for fewer than 200 employees? You get almost no multiplier effect at all with an NFL franchise because you have so few employees, and so much of the revenue is not recirculated locally, the majority going home to athletes' families.

Takers and givers

There has been much talk in the last presidential campaign of who are the “takers” from the public and who are the “givers.” It seems to me the largest “takers” in San Diego the past 15 years or so have been the pro sports teams. And with a 4-7 season, a lot of folks would not be upset if the Spanos family took their team to Los Angeles.

It should be mentioned that a primary beneficiary of professional sports in San Diego is the news media, particularly the U-T San Diego. Therefore we can expect a maximum amount of encouragement from Papa Doug’s U-T, all toward benefiting his newspaper interests and his downtown real estate empire.

Carrico is a San Diego attorney and can be emailed at Comments may be published as Letters to the Editor.

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