Chargers +/- $350 Million Short of Initial PSL Sales Target

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SDRay

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The Los Angeles Chargers are struggling mightily to sell personal seat licenses at their new home in Inglewood (slated to open in ’20). One high ranking team executive said that Dean Spanos’ organization is +/- $350 million short of their initial $400 million target. Rams owner Stan Kroenke is understandably upset about his tenant’s inability to move PSLs. Those revenues along with a $200 million NFL G-6 loan are supposed to go towards the new venues’ constructions costs (+/- $5 billion) and he’s is responsible for the difference.

Howie Long-Short: The Rams have long history in the L.A. basin (’46-’94) and Kroenke spearheaded the league’s return to the city, so the Chargers status as both a newcomer and as second class citizens in the market has made it difficult for them to sell high priced products. The club is learning the hard way that there’s a finite amount of time and money that people are willing to spend on pro football. Remember, the Rams also have the better on-field product and Los Angeles is a town that craves star power. Chargers PSLs are a tough sale.

It’s not uncommon for projections on a large-scale construction project to be slightly off, but by nearly 87.5% is an abnormally wide miss. The initial study conducted by Conventions, Sports & Leisure International (a Legends subsidiary) suggested that the market could support $1 billion worth of PSL sales (Rams: $600 million, Chargers: $400 million). When the Chargers stumbled out of the gate with CSL’s suggested pricing, a second study was done and the team’s sales target was lowered to $150 million. But Spanos’ club isn’t even close to reaching that number. Our source said that while the Rams are pushing $500 million in PSL sales, the Chargers have sold just +/- $50 million worth. Executives at the league’s highest levels are said to be concerned.

The Chargers aren’t responsible for picking up the short-fall in PSL sales (if there is one) and are entitled to keep all game day revenues, so one can understand why some believe Spanos “got a sweetheart deal.” But if the club continues to struggle to sell tickets and suites, it’s not certain that his franchise is any more valuable in Los Angeles than it was in San Diego. Remember, this isn’t baseball where the teams control local media rights. There are no local rights in the NFL – the league maintains national TV deals and each franchise is entitled to 1/32 of the revenue. Just moving from a small market to a big market will not – on its own – boost team revenues.

The size of and money in Los Angeles (along with the CSL study) likely convinced the league’s wealthiest (living) owner that demand for NFL football in the market was greater than it is. Of course, the Rams owner won’t have an issue paying down the debt if the Chargers come up short by a few hundred million dollars; he’s estimated to be worth $9.7 billion.

If the market continues to reject the club it’s worth wondering if a return to San Diego could be in the team’s future. The team executive we spoke to said that was unlikely. While the Chargers are contractually obligated to play at SoFi Stadium long-term, it’s believed that Kroenke – already upset that the number pledged to cover the debt was cut – would be willing to negotiate an early exit. The problem is, San Diego isn’t taking a Dean Spanos owned team back; a Chargers return to the city would be contingent upon the franchise being sold.

The Chargers’ decision to leave San Diego never made much sense. Sure, the team was unable to get a new publicly funded stadium there, but the city has just one other pro sports team and it plays during the spring and summer months. There are no other teams to compete with for sponsorship dollars (or eyeballs) in the fall and winter.

To be clear, no one (not the Rams, Chargers or the league) is discussing relocation. In fact, the individual we spoke to that is tied to the stadium deal believe it’s premature for anyone to even begin to panic. “As the building comes up out of the ground more people will see that it’s real and sign-up [for tickets].” In the meantime, all the team can do is “market harder and play better.”
 

Fender57

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88% of a shortfall, that is a whiff of gargantuan proportions.

Kroenke, not Spanos, is responsible for any PSL shortfalls - no wonder why Kroenke is pissed! $350M out of $400M will be a tab for Kroenke to pick up.

The article also states that their value, when taking into consideration the PSL shortfall and their lack of interest in the region, is no more viable in LA than San Diego. Hey Deano, if Fibiani convinced you the team’s value would be higher, looks like he lied to you too! :laugh::laugh:
 

Concudan

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88% of a shortfall, that is a whiff of gargantuan proportions.

Kroenke, not Spanos, is responsible for any PSL shortfalls - no wonder why Kroenke is pissed! $350M out of $400M will be a tab for Kroenke to pick up.

The article also states that their value, when taking into consideration the PSL shortfall and their lack of interest in the region, is no more viable in LA than San Diego. Hey Deano, if Fibiani convinced you the team’s value would be higher, looks like he lied to you too! :laugh::laugh:
Kronkmeister should not worry... He will make up the amount from the rent the chargers are paying in just 400 or so million years...
 

Harryo the K

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Kroenke – already upset that the number pledged to cover the debt was cut – would be willing to negotiate an early exit
————

I recall pro Bolters saying ....that will never happen...Chargers have 30 year lease.......understandable to build up fan base...
.....uptick in team valuation (that never happened).....etc, etc.

For you Charger fans out there, wait a year or two and that sucker who has a $3,000 PSL seat will sell it to you for $500 and take the loss.

Joke of an organization.
 
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Harryo the K

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Where the Hell is the relocation money coming from? I hope Deano already has a bank loan set up because, I'd steer clear.
 

Gill Man

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I hope you’re right. If he had the leverage we thought he had, the Chargers would’ve never ended up in LA.
that's why it makes little sense......how did Stan let the deadbeat dean the weenie even get the option to join him in LA? He apparently doesn't have the leverage to have made sure that little deadbeat weenie couldn't weasel in on the stadium lease. Kroenke isn't all that apparently. He looks sort of stupid actually. I guess stupid looking people can con folks out of money easily lolz. But he's the guy that got conned by the NFL to have to put up with deadbeat dean.
 

Fender57

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that's why it makes little sense......how did Stan let the deadbeat dean the weenie even get the option to join him in LA? He apparently doesn't have the leverage to have made sure that little deadbeat weenie couldn't weasel in on the stadium lease. Kroenke isn't all that apparently. He looks sort of stupid actually. I guess stupid looking people can con folks out of money easily lolz. But he's the guy that got conned by the NFL to have to put up with deadbeat dean.
Kroenke’s wife is a Walmart Walton. He had money but she is the major moneymaker.
 

Gill Man

Inaugural San Diego Charger Fan Since 1962 FUDEAN
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Kroenke’s wife is a Walmart Walton. He had money but she is the major moneymaker.
And dean does all his shopping at Kroenke's wife's place in addition to renting at his stadium. Maybe the league oughta relocate dean to a double wide somewhere.
 

Faded Blues

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Feb 10, 2018
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Ben Higgins just ripped the nfl and the chargers this morning for the la debacle.

I don’t know if they post a podcast but it’s worth the listen. It starts around 800 am and lasts about 15 minutes.

The best part was that Ben was analytical about it and just destroyed them.

97.3 fan
 
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Faded Blues

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If you read the article, the chargers are responsible for an undisclosed portion of the psl shortfall.

this contradicts Fred roggin.

I trust Forbes over Fred roggin.

stan going to say write me a check BITCH or get the fuck out!
 

Harryo the K

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If you read the article, the chargers are responsible for an undisclosed portion of the psl shortfall.

this contradicts Fred roggin.

I trust Forbes over Fred roggin.

stan going to say write me a check BITCH or get the fuck out!
Might explain the Rivers no extension dance.
 

Harryo the K

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Aug 26, 2017
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If you read the article, the chargers are responsible for an undisclosed portion of the psl shortfall.

this contradicts Fred roggin.

I trust Forbes over Fred roggin.

stan going to say write me a check BITCH or get the fuck out!

I could see Stan demanding the money in a lump sum or he sues. Not going to be pretty for the League.