In the wake of the news that owners have concerns about the Chargers in L.A., some in the media have started throwing darts at the map in search of a new home for the team.
Don’t bother. They aren’t leaving Los Angeles. Not for at least 20 years after the opening of the new stadium they’ll share with the Rams in Inglewood.
Per a source with knowledge of the situation, the Chargers have a firm 20-year lease at the venue being built by Rams owner Stan Kroenke. The Chargers also hold a pair of exclusive 10-year options after the first 20-year term.
Don’t shrug at the existence of a 20-year lease and say, “Contracts were made to be broken.” Everything currently being sold at the venue — from naming rights to luxury boxes to sponsorships to advertising — hinges on at least 20 NFL games per year, for at least 20 years. Thus, a premature exit by the Chargers would be the first domino in a cascade of contractual breaches.
The first breach would surely be the biggest. Kroenke didn’t amass his fortune by not holding his business partners to their commitments. He’s shelling out billions to build the stadium, and the return on his investment relies on the Chargers honoring their commitment to play roughly 200 total games there over two decades. There’s no way Kroenke would look the other way on a way out for the Chargers absent significant compensation, from someone.
Then there’s the question of whether the Chargers want out. They don’t, and they’re not expected to. The Chargers get to play in the new stadium without paying any construction costs, including cost overruns. The Spanos family took on no debt to make the move, with the only expense being the $650 million relocation fee, paid out over 10 years.
Given the ongoing increase in TV revenue and franchise value, it’s a drop in the bucket to have partial long-term dibs on the nation’s No. 2 market.
And by the time the 20-year lease matures to the point where the Chargers can exercise their first 10-year option to renew it, a generation of Angelenos will have grown up with a pair of NFL teams in town, in contrast to the generation that grew up with none. So, yes, as time goes by, more people will embrace the Rams or the Chargers, or both. While that unfolds, the Chargers will be playing in the best stadium in the league, on favorable terms.
Maybe the first two years have been rockier than expected, but this is a 20-to-40-year play. At a minimum, it’s a 20-year venture beyond the opening of the stadium in 2020, with little or no chance of a re-relocation.