L.A. transfer fees could be up to $500 million per team

If/when (when) one or more NFL teams relocate to Los Angeles, the owners will be required to fork over a significant transfer fee.

Per NIck Canepa of U-T San Diego, that amount could be up to $500 million per team.

The league’s relocation policy expressly states that a relocating team “will ordinarily be expected to pay a transfer fee to the League,” aimed at compensating other teams for the loss of the opportunity to move to the new market themselves and/or accounting for the enhanced value of the franchise arising from the move.

With Steve Ballmer buying the NBA’s L.A. Clippers for more than $2 billion last year, it’s safe to say the move of an NFL team to Los Angeles will enhance its value, dramatically.  Because the factors include comparison of revenue streams and franchise value in the old market and the new market, it’s possible that, for example, the Rams and Chargers would face different transfer fees, if they move.

The relocation policy also gives the Commissioner discretion to adjust the transfer free based on the NFL’s interest in encouraging the move or discouraging the move.  In other words, the NFL will once again be able to do whatever it wants to do.

The most prudent approach would be to negotiate all aspects of relocation between the team(s) that will be moving and the league office before ownership votes on the move.  If an impasse is reached, an owner can decide to defy the rest of the NFL and move without paying a transfer fee or accepting any other terms.  While the NFL believes it can impose its will on specific franchises, the late Al Davis proved when moving to L.A. more than 30 years ago that the antitrust laws prevent a collection of independent businesses from telling one specific business where to do its business.

That’s the ultimate leverage for the Rams, Chargers, and/or Raiders this time around.  It requires a willingness to alienate the league office and most if not all other owners, but keeping up to $500 million could provide a strong incentive to deal with getting the cold shoulder at ownership meetings.

79 responses to “L.A. transfer fees could be up to $500 million per team

  1. Guarantee that if Mark Davis had $500,000,000 to give to the other owners, he’d have the stadium built in Oakland he talks about.

  2. I’m not sure that the current crop of owners would face down the league office like Davis once did.

    Exhibit #1 – I give you the uncapped year when the CBA expired and the freedom to spend as much as you like….er, not so much.

    Sounds like a pretty clear cut and dried case that Wash and Dallas (was it?) had if they wanted to challenge Goodell.

    Not a peep…

    But then again – if Goodell just FORBADE Schneider and Jones from spending the cap $$$ and allowed them to pocket the savings, well – that’s kinda like a lose/win situation.

    $500 million might be something to fight over for these guys – that’s almost half a (ridiculous) stadium.

  3. $500 million per team? So a ne cream would have to fork out 17.5 billion to move to L.A.?!?

    I think someone needs to do a little fact checking or proof reading here.

    Why would an owner go in debt to move his team?

  4. Purely a money grab by the other owners. Absolutely no reason to have to pay that kind of cash to “improve” your location that will ultimately give the other owners more money for revenue sharing anyway.

  5. 5th paragraph, “transfer free”? C’mon Mike, proofread! Anyway, having to pay $500mil to move a team sounds ridiculous. But then again, the NFL basically prints money at this point. I’m still expecting to see the Rams make the move though.

  6. So teams that want to move to LA need to pay the other teams because these other teams didn’t move to LA? I realize they just can’t say it’s a greedy money grab (it’s OK NFL, we know), but as lame justifications go, it’s pretty weak. I wonder how much teams will get paid for not moving to St. Louis.

  7. I can’t for the life of me understand why any sane owner would even pay one nickel for the ‘privilege’ of moving to a city that’s been a proven graveyard of NFL teams.

  8. It’s worth a billion to either team. They’ll go from middle of the league in value to the most valuable instantly. Pay the fee and sell the team for 2.5-3 billion.

  9. Due to revenue sharing, the rest of the league will make money from the teams moving from a smaller market to LA, I don’t see why they feel the need to shoot themselves in the foot.

  10. “While the NFL believes it can impose its will on specific franchises, the late Al Davis proved when moving to L.A. more than 30 years ago that the antitrust laws prevent a collection of independent businesses from telling one specific business where to do its business.”

    While Al Davis won his legal battles with there NFL, he paid for it with decades of bad calls against his team.

  11. $500 million is likely less than two years profit for said team. Yes it’s a bitter pill, but it’s a speeding ticket when you consider what those franchises will be worth.

    Seriously, just look at the money that gets thrown around when USC is a National Championship competitor. Now imagine an LA team competing for a world championship. Increase by a factor of 5 easily.

    If a team does it correctly they could foist a good chunk of the latino fan market away from the cowgirls as well.

    The only issue I have all three of the teams being considered are pretty much run by idiots. Will they have the brains to put people in charge that can take advantage of the opportunity?

  12. So, teams in position to move are doing it because they are not making enough money. And then they have to come up with and pay almost 500 million dollars to move to a better market? That just seems, I don’t know, backwards? It will probably fall on the heads of the tax payers in the new city. Not exactly the best way to start off a new relationship.

  13. the fans (once again) will be paying for the “Transfer Fee” not the owner….i make a point to give the NFL very little of my paycheck…it’s really almost next to nothing….i encourage others to take the same approach….

  14. Meh all the billionaire owners will have to do is raise the price for a beer to $20, a hot dog to $25, parking to $100, $10 for unlocking a bathroom stall etc. etc. and they’ll squeeze that $500 million out of the sucker little people fans in no time.

  15. Seems to come close to the line of extortion. It may not cross it but it’s getting close by the sounds of it. I can’t take the NFL and it’s holier than thou belief anymore. What the clowns have done to the game in the name of the almighty dollar is just disgusting and I can’t wait for the implosion to happen. With the greed exhibited by the NFL they will fall on their own sword, it’s just a matter of time

  16. One thing I don’t really understand is in a league where revenue is shared, why would teams get fined/penalized with a fee for moving into a more valuable market? Every team benefits.

    I’m surprised the teams don’t all collude together to FORCE some of the smaller market/low revenue teams to move to more profitable areas. Seems backwards to me.

  17. If it’s two teams moving to the same stadium, $500 million is financially a smart move, imo. Each team could likely raise $400 million ($800 million total) in PSL’s. The stadium would also likely generate an additional $250 to 300+ million for the naming rights for the first 20 years (and these dollar figures could be on the low side). The move itself to the better market would increase the value more than the $500 million per team. The increased suite revenue and ticket revenue would likely trump anything a city like St. Louis could provide.

  18. “aimed at compensating other teams for the loss of the opportunity to move to the new market themselves”

    in other words have to pay because other teams cant use LA to extort their cities for a new stadium

  19. Completely unenforceable. Just move, Stan. There isn’t a thing the league or the other NFL owners can do about it. You know it. I know it. Everyone knows it.

  20. If those reasons are accurate as the justification of the $500 million, thats BS. $500 million to other franchise that could have moved there. Lol. Only in Goodells warped, stupid view would that reason make any sense at all.

    As far as increasing the value reason. The new owner should be rewarded not the rest of the gravy train.

    If thosr reasons are accurate and legit, then the NFL never ceases to amaze me with their greed and stupidity

  21. folk crusader when USC played Oklahoma in the National Championship a few years back in Miami tickets were practically worthless. You could buy all the lowers you wanted for $20 and uppers were free. I gave away tickets.

  22. I don’t think if the league is pushing to get one or two teams to relocate that they will be charged for doing so. If a team on its own wanted to move then I could see the charges being something to be paid. But like I said if its the league pushing no payment needed.

  23. “$500 million per team? So a ne cream would have to fork out 17.5 billion to move to L.A.?!?”

    Meaning that if two teams move, they both owe the league up to $5oo million.

  24. I wouldn’t pay a penny. Let them fight me in court over it. AND on top of that any games played which its obvious calls went against my franchise would expose the NFL for being rigged and no better than WWE. By the way Roger the dodger… what ever happened to the outcome of #DEFLATEGATE…. hmmm

  25. So if they can afford to pay every NFL team $500 million, why do tax payers need to chip in for stadium construction/renovation again?

  26. Wait till they find out California is about to run out of water. I wonder how that will impact the move?

  27. folkcrusader says:
    Apr 5, 2015 9:42 AM
    $500 million is likely less than two years profit for said team. Yes it’s a bitter pill, but it’s a speeding ticket when you consider what those franchises will be worth.

    ———————————————-

    Mmmmmmm, not so much.

    NFL earns $9 bil a year – 50% of that goes to players. $4.5 divided by 32 = $140 million per team IN REVENUE, not profit.

    Packers make some $30+ a year, bottom line. Hardly the $250 million a year you bandied about…

    That being said – a huge transfer fee like that is ridiculous.

  28. Pretty sure Mike is mischaractetizing what the fee is for. I could think of a couple of reasons the NFL might require a transfer fee that would seem more justified than the 2 reasons he proposes. One of those reasons would be Market Branding. Market Branding is a significant expence and the associated risk of lost capital resulting from a significant business change, such as moving to a new market, is a risk. If the team fails in the new market, then apart from lost revenue is the loss of name brand (NFL) respectabilty due to that failure…which is by far more significant than any lost short term revenue stream. So, a large fee could be imposed to offset the risk and insure that any team wanting to make that change has both the financial assets and commitment to insure (as much as can be insured) that failure is not an option.

  29. Glad to share the same sentiments as most of you: this transfer fee is a form of extortion.

  30. “Do they put the fact that in the past nobody wanted to go to the stadium to watch pro football in LA into that equation?”

    Also the fact that nobody cared when the Rams and Raiders fled town in the first place. In fact, many fans were happy that they left because it meant that they could watch their hometown team on TV more often instead of being forced to watch the local teams.

  31. Could Spanos or Davis afford this on top of the cost of building a stadium? Makes me wonder how accurate this figure is.

    If the figure is correct, this could be the NFL trying to force Davis away from LA and to get Spanos to play in Kroenke’s palace in Inglewood.

  32. So you can’t buy a team without being approved. You have to pay $500 M to move a team.

    Sounds like they are financing a team in England or finally paying for those cameras they need.

    #nflpoormanfundraiser

  33. mcjon22 says:
    Apr 5, 2015 8:37 AM

    $500 million per team? So a ne cream would have to fork out 17.5 billion to move to L.A.?!?

    I think someone needs to do a little fact checking or proof reading here.

    Why would an owner go in debt to move his team?

    I just saw an article that had the Lions valued at just over 1 Billion. If you put that team in L.A., the value would likely double (maybe more, if you look at the Clippers new 2 Billion valuation). So you put up 500 Million, and double the value of your team.
    That is an investment worth making every time it is available.

  34. If that’s the case, they can keep that $500m and build their own stadium with their current cities, instead of offering $1m on a $1b stadium.

    The NFL must have forgotten that the whole idea of teams moving is because they want corporate welfare and the citizens to build their stadiums. If they can afford this kind of ludicrous transfer fee, we the citizens HAVE NO MERCY on them regarding us building them a stadium.

    NFL = American GREED!

  35. oldtrafforddevil says:
    Apr 5, 2015 11:47 AM

    Mmmmmmm, not so much.

    NFL earns $9 bil a year – 50% of that goes to players. $4.5 divided by 32 = $140 million per team IN REVENUE, not profit.

    Packers make some $30+ a year, bottom line. Hardly the $250 million a year you bandied about…

    That being said – a huge transfer fee like that is ridiculous.

    =================================

    That’s what the NFL makes and shares but not what teams make. The teams make money off of ticket sales and their stadiums and any other deals they have in place.

    Lots of teams make much more than 50% of their revenue off their stadium profits.

  36. I keep seeing that figure Ballmer paid for the Clippers. Just because the guy paid 2bill for them doesnt mean thats what theyre really worth. Ever hear of an overvalued asset/bubble? Ask those homeowners with underwater mortgages about that

  37. some guy above said.NFL teams make 500 million in profit per year. Talk about not having even the most basic grasp of business- do u have any idea how much a team that generates a steady half a billion a year in profit would be worth??

    Some people should not be allowed to post comments

  38. Guess what fans your cost for NFL stuff just went up. Just wait till you pay a fee to draft your fantasy league.

  39. If you take into account that any team that is a tenant to Kroenke would most likely not be able to use the PSL scheme to help generate money nor would they get the money from the stadium name deal to help with the relocation fee. It seems that this fee and the percentage of rent Kroenke would require, would really jack up the price for tickets. Both the Chargers and Raiders are better off building modest stadiums in their respective markets. This way, the money would go towards an asset they own, like their own stadium, as opposed to another owner/s’ pocket.

  40. compensating other teams for the loss of the opportunity to move to the new market themselves and/or accounting for the enhanced value of the franchise arising from the move.
    *********************************************************
    Now that’s ridiculous !!! I’m with Al Davis, this is going too far. Paying other teams for the “loss” of moving to the new market themselves?? Let’s see “Uh yeah, we were considering moving but the other team beat us to it, can we have some of that $500M for just “thinking” about moving??” Absurd………..How much MONEY has been lost by NOT having a team in this market for so many years?? How about the NFL pays the 30-31 teams that refused or showed indifference to allowing the Los Angeles market to die off over the years??? Anti-trust laws? How about extortion ??? Can’t you go to jail for being proven to have extorted someone for money?? Wow, the NFL has it’s own set of rules…………………..

  41. AL DAVIS RIP WOULD CHEW UP RODGER GOODELL & SPIT HIM OUT . MARK DAVIS SHOULD JUST MOVE THE TEAM TO VEGAS BY PASS THE LA DRAMA AND SAVE ON TAXES .

  42. Well then, if it’s 500 million, then the NFL can afford to kick some money to the city for building the stadium.

    If not, a move there would almost seem like a transfer of money from the City (for the stadium) to the NFL headquarters (transfer fee).

  43. If either of the teams that are going to finance their own stadiums had $500 million to spend on a relocation fee, they would have made better efforts to build it at their current cities. This is more red tape, political and mafia mentality that is going to keep the league away from LA. The G4 $200 million is not eligible for the LA relocation project, therefore the out of pocket costs for these 3 teams will be significantly higher. If the financing for these stadiums result in very minimal out of pocket costs (initial), especially with the 2 team Carson project, i can see the league asking for a relocation fee worth 1/4 of the potential valuation of an LA team…..whether its justifiednor not.

  44. … and yet the taxpayers get to foot the bill for building the stadiums.

    The time has come for the NFL to pay for its own playpens.

    NO MORE TAX $$$ FOR THE NFL !!!!!!!

  45. Just because someone can throw away $2 billion on a crappy empty franchise like the Clippers, it doesn’t mean everyone who owns a sports franchise is reckless and stupid with money. No one is paying $500 million to his competition. He may burn down their stadiums, but he’s not going to strengthen the competition.

  46. YOU GOT TO BE KIDDING ME?
    IF THE TEAMS WERE WILLING TO SPEND 5 MILLION DOLLARS ON A STADIUM ,THEY WOULDN’T BE MOVING IN THE FIRST PLACE!

  47. The NFL needs to stop changing the game itself, and start working to change some of their stupid rules!

  48. This ain’t the mafia and protection money! I would not pay a cent if that stadium is personally financed.

    What in the world does that have to do with paying money to the other owners ..,,,,,lol……lol

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