|
https://www.espn.com/nfl/story/_/id/28117460/inside-rams-chargers-marriage-nfl-fights-los-angeles
Seth WickershamDon Van Natta Jr.
THE SKELETON OF a stadium sits at the center of a construction site three times the size of Disneyland. It is a futuristic mass of steel and concrete that appears to have both risen from the earth and descended from space. SoFi Stadium -- the name sounds from the ether -- will house a football field 100 feet below ground level and is surrounded by mammoth mounds of excavated Inglewood, California, soil piled like peaks in a range around the development. When it opens next summer, its backers hope SoFi will mark the end of one NFL era in Los Angeles -- defined by rotting venues and teams that have drifted in and out over 73 years -- and the beginning of another. The $5 billion-plus project will feature a translucent roof that appears to hover above the stadium, as if allowing it to breathe, and will be home to 298 acres of retail space, including a theater, a concert venue and a new NFL Media headquarters. Now, though, seven days a week, it is surrounded by cranes and trucks and an army of hustling workers in white construction helmets bearing the logos of two home teams: the Los Angeles Rams and the Los Angeles Chargers, an arranged marriage of clubs whose high-level executives barely speak with one another.
EDITOR'S PICKS
Inside the NFL's wild return to LA
Sin City or Bust: How the Raiders went Vegas, baby
SEPARATED BY MINUTES, Dean Spanos and Stan Kroenke walk into a Ritz-Carlton ballroom in Fort Lauderdale, Florida. It's the final day of the NFL's fall owners meeting in mid-October. Spanos, in khakis and a navy blazer, arrives first, with commissioner Roger Goodell. Spanos is a conservative, risk-averse man whose Chargers are still trying to get on the radar in L.A. Kroenke, tall and thin with a thick mustache, follows shortly after in a black suit, black dress shirt and black sunglasses. The Rams' owner is a shrewd real estate mogul who has found changing the Los Angeles sports landscape more challenging and expensive than he'd imagined. Both L.A. teams suffered losses the previous weekend. The Rams drew an announced crowd of 75,695 to the Los Angeles Memorial Coliseum, but it was half-empty at kickoff and contained so many San Francisco 49ers fans that the Rams' offense was forced to use a silent snap count. The Chargers, on national television against the Pittsburgh Steelers at the 25,300-seat Dignity Health Sports Park in Carson, 16 miles south of downtown L.A., felt as if they were playing on the road -- again. Steelers fans either outnumbered Chargers fans or came close, as did Denver Broncos fans at the prior home game, as did Houston Texans fans at the home game before that, as did Indianapolis Colts fans in the season opener. In the fourth quarter against the Steelers, the opening of the Styx song "Renegade," a Steelers anthem, blared from the stadium's sound system, the setup to a failed Chargers joke that got the visiting fans even rowdier. Overhead, as with most Chargers home games, a plane dragged a banner that read: "Impeach Dean Spanos."
L.A. has always been a Lakers town. On a cool September evening in Chavez Ravine, you'd be forgiven for thinking it's a Dodgers town. When Wayne Gretzky arrived in 1988, the Kings joined the mix, and when USC was hot under Pete Carroll more than a decade ago, the city became a college football capital. Was it ever an NFL town? If so, can it still be? Something strange happened in the 21 seasons between when the Rams and Raiders left after the 1994 season, and when the Rams returned in 2016. Angelenos, burned by a league that seemed to view the city more as a focus-grouped market than a layered and complicated region, showed little desire for a team of their own.
Jerry Jones thought he could win them over. Now 77, the Dallas Cowboys' owner and Hall of Famer is the NFL's most powerful person and maybe the most influential power broker in American sports. He has been the most passionate evangelist for the NFL to make a splashy return to Los Angeles, the city where he was born, envisioning a near-future with more money in it for everybody. In 2015, the Rams' Inglewood project, then estimated to cost $1.86 billion, was competing against a Chargers-Raiders $1.8 billion option in Carson. Few outside the NFL knew it, but Jones positioned himself to profit from either proposal. Concessions for either project -- and the construction, in the case of Inglewood -- would be managed by Legends, the company co-owned by Jones and the Steinbrenner family. The competition between the proposals was bloody and toxic given the high stakes, pitting owners against one another. Ultimately, Jones sided with Kroenke because his stadium and project proposal had what Jones called the wow factor. "We had good insight on its vision," Jacksonville Jaguars owner Shad Khan says. "It was spectacular."
New L.A. Stadium
LA StadiumThe 70,000-seat, open-air facility that will be shared by the Rams and the Chargers in Inglewood is the centerpiece of a $2.6 billion, 298-acre development.
• Photos, videos from a media tour of the construction site
• Chargers' Dean Spanos: 'It's like a city being built right in front of you'
At an owners meeting in a posh Houston hotel in January 2016, Jones helped to resolve the L.A. relocation scrum by persuading fellow owners to endorse a compromise that he had sold as a blueprint for success. Two teams would return to Los Angeles: the Rams -- and, if they chose, the Chargers. The red flags that are obvious now were visible then. League research indicated neither the Rams nor the Chargers had an overwhelming reservoir of support in the L.A. region, with fewer local fans than the Patriots, Steelers, Packers, Cowboys and even the Raiders, according to some team and league studies. What's more, the accommodation wouldn't make the Rams and Chargers equal partners, like the Jets and Giants at MetLife Stadium, which the teams jointly built with private funds. Kroenke -- one of the NFL's wealthiest team owners, worth an estimated $9.7 billion -- would pay to build the stadium, perhaps the only option in California, whose legislators and voters rarely approve a single public dollar for new stadiums. Spanos, a long-respected owner with a reputation for putting the league first, would be given the first option to be Kroenke's tenant, for $1 a year, and if the Chargers decided to remain in San Diego, the Raiders could join the Rams in L.A. -- an outcome nobody around the league wanted, owing to Al Davis' burned bridges and the co-opting of team apparel by gangs.
Almost all owners believed Jones' resolution to be the best business decision among the available options, and most supported it under the cover of a secret ballot, which allowed them to vote for Inglewood without Spanos knowing who had turned on him.
Spanos felt burned and betrayed by the vote and the entire L.A. decision process, and therefore few expected him to exercise the tenancy option. But he did, and now these unequal partners are locked in a bitter fight, stoked by Kroenke's fury over cost overruns exceeding $3 billion, questions over the Chargers' long-term viability in the market, a lawsuit seeking billions over Kroenke's departure from St. Louis that has engulfed the entire league, and an increasingly fractious and sometimes petty civil war between Rams and Chargers officials, according to documents and nearly two dozen interviews with owners, league and team executives, and lawyers.
SoFi Stadium has become a vessel for each figure's motivations and goals, and a repository for the hopes and vanities of the NFL. Spanos wants to secure once and for all his family's fortunes and establish his team as more than an NFL version of the second-rate Clippers, embarrassment and awkwardness over being Kroenke's tenant be damned. Kroenke is driven by the chance to build a monumental legacy for both himself and the NFL, despite the huge bill. Jones wants what he always wants: for the league to flex, show off and "grow the pie" of annual league revenues now edging toward $17 billion a year -- and to walk away with a healthy cut. But SoFi Stadium is also a bet -- a multibillion-dollar wager that in a market of 22 million, the world's most spectacular stadium will inspire 70,000 people to show up every Sunday and cheer. For two teams.
A PHONE CALL between Kroenke and Goodell in the autumn of 2015 was a harbinger for the current impasse. On Nov. 4, Kroenke was on his cellphone on the small patio of The Coffee Bean & Tea Leaf in the heart of Beverly Hills. The secret ballot in Houston was still two months away, and the Carson project seemed to be gaining traction with owners, mostly out of loyalty to Spanos, who believed at the time he was close to the votes he needed. Kroenke was willing to do whatever it took to return the Rams to L.A. -- including partnering with Spanos. "I want you in L.A. with Stan," Jones had told Spanos. Normally quiet and reserved, Kroenke was hot.
"No. No! No, Roger!" Kroenke said. "I've been out there, spending millions, and everybody else is piggybacking on everything I've done, not spending a dime, letting me take all the heat, and then they think they're going to get to step in? I don't think so."
"I've been out there, spending millions, and everybody else is piggybacking on everything I've done, not spending a dime."
Stan Kroenke
The call continued for 10 minutes, until Kroenke realized people were staring at him. He stood up and said, "Roger, we're going to have to continue this conversation in a few seconds. I need to get somewhere a bit more private to discuss some of the things I need to say to you next."
The following month in San Francisco, Spanos dined with a small group of owners who were convinced his project would prevail. "We got you," said Jerry Richardson, the Carolina Panthers' then-owner who had tried to bully owners to vote for Carson. They raised a glass, and Richardson spent the rest of the dinner trashing Kroenke. But Richardson had overestimated his power of intimidation -- and underestimated Jones' persistent charm. Twenty-four hours before the vote in Houston, Spanos walked into a conference room where a clutch of owners had been deliberating. On a whiteboard, the two options that had been on the table for a year -- "STAN/LA" and "CHARGERS-RAIDERS/CARSON" -- were crossed out. A new option, a Jones-driven last-minute compromise, had appeared: "STAN-DEAN/LA." Spanos knew he had lost.
Before the secret ballots were counted, Colts owner Jim Irsay pulled Spanos aside and said, "This is for the best."
Chargers owner Dean Spanos believed his proposal to build a stadium in Carson would prevail just 24 hours before a secret ballot went against him. AP Photo/Carolyn Kaster
FEW IN THE league felt that way a year later, especially Spanos. In December 2016, he stood before a room of owners and league executives at the Four Seasons in Irving, Texas, looking like a man who had lost much more than a vote. He was 66 and at the low point of his 22 years running the Chargers. After losing to Kroenke, he had returned to San Diego and lost again, blowing $15 million on a long-shot ballot initiative for a new stadium, destroying any remaining goodwill and trust with a loyal fan base. A broken man, Spanos was out of options.
"I don't want to go to L.A.," Spanos said. "I want to stay."
Many owners sympathized with Spanos, but some were also frustrated by him. The league's $550 million relocation fee that Spanos would need to spend to move to L.A. might have been better invested in a new stadium in San Diego, where the Chargers would collect most of the revenue. Why move to a city that showed little interest in them? "It wasn't rational," a high-level league source says.
But Spanos had his own rationale, frustrated by years of wars with San Diego officials over public financing for a new stadium. The league-first guy was gone. He was determined to do what was best for his club and for his family, several of whom worked for the team, and in L.A. he saw "a favorable, low-risk deal," a Spanos confidant says. In L.A., the value of Spanos' team might increase by $1 billion from the Forbes-estimated $2.08 billion value it had in San Diego in 2016. He'd play in a glistening new park, with no stadium debt. His biggest expense would be the $550 million relocation fee, and Spanos intended to borrow to pay it.
After the Irving league meeting, brass from the Chargers and Rams met with league executives and lawyers for a series of negotiations to finalize the term sheet, whose broad stipulations were set by owners and league executives the night before the secret relocation vote. Spanos and Kroenke, both of whom declined to comment for this story, had enjoyed a strange relationship, both cool and occasionally friendly, once playing gin rummy together on a private jet a decade ago. But the term-sheet sessions were awkward and "the body language horrible," according to one attendee. Spanos and his executives surprised Rams officials by drawing a hard line, demanding a cut of all revenue streams, input over design elements, and approval over all decisions made by Legends and by StadCo L.A. LLC, the stadium company controlled by Kroenke. Rams officials tried to be cordial, but they seethed. The way they saw it, Spanos had the entire Southern California market to himself for 21 seasons with little to show for it, but now he felt entitled to a chunk of revenue on a project to which he would contribute one dollar a year. Says one high-level executive involved in the negotiations: "The Rams felt like Stan was taking all this risk and would appreciate it if Dean would recognize what he was bringing to the table."
"I don't want to go to L.A. I want to stay."
Dean Spanos
Spanos was keenly aware of the imbalance, but he also knew the league, a trade association at heart, would ensure him a share of stadium cashflow enjoyed by other teams. The Chargers ended up with a sizable 15% share of all revenue streams, including joint luxury suite sales, sponsorships and SoFi Stadium's naming rights, which is estimated at more than $600 million over 20 years.
Spanos also won a major concession on the most divisive issue: stadium seat licenses, the tens of thousands of dollars NFL teams often charge for the right to buy season tickets. All the revenue from both teams' sale of SSLs would go to Kroenke to help defray the cost of the stadium. But per the term sheet, the Chargers neither had to meet a revenue target nor even sell a single SSL. All the Chargers had to do was try to sell the SSLs, at whatever cost they determined, until one year after the stadium opened, after which they wouldn't even have to try to sell any.
The NFL sets SSL targets for all teams, often forcing owners to open escrow accounts through the league as part of a complicated process to ensure that no owner defaults on stadium debt. League research had predicted that the Chargers and Rams could each sell $400 million in SSLs, but because Kroenke was paying for the stadium himself, neither the Chargers nor the Rams were required by the league to meet those sales targets. While there were no penalties if the teams failed to hit the goal -- all involved were careful not to violate antitrust laws -- the Rams expected the Chargers to reach the $400 million mark as a way to contribute to their new home. The terms were favorable to Spanos, and Kroenke had little choice but to accept them. League executives wanted the Chargers to have a friendly deal -- and also knew that in the long run the Inglewood stadium and project would probably appreciate by billions, making Kroenke's investment more than worthwhile. Kroenke took Spanos at his word that the Chargers would be a full partner, while aware that Spanos had no financial incentive or obligation to help. It was a fragile trust forged by two teams suspicious of each other.
On Jan. 18, 2017, the Chargers held a fan rally at the Forum in Inglewood to officially announce the move to L.A. Only a small section of the arena was open, and it was nowhere close to full. On a huge screen, Chargers highlights played, accompanied by the soundtrack from "Top Gun," which was set in San Diego. Superstar quarterback Philip Rivers looked dour on stage, like a child who had been dragged to a party by his parents, and would later proudly refuse to move his family to L.A. Twice, Goodell praised Kroenke, who was not in attendance, and his vision for the palatial new stadium before mentioning Spanos, who was seated nearest to the commissioner. When it was Spanos' turn to speak, he surveyed the scarce and scattered Chargers fans. "This is surreal!" he said. A group of fans flipped him off.
Cowboys owner Jerry Jones, shown with NFL commissioner Roger Goodell and Rams owner Stan Kroenke before an NFC divisional playoff game last January, has always believed in the transformative power of a stadium. Ric Tapia via AP Photo
JERRY JONES HAS always believed in the transformative power of a new home, having witnessed it firsthand when he went big on AT&T Stadium. In 2009, Jerry World opened in Arlington, Texas, and a decade later it still shines with a modern, fresh-paint gleam. Jones even believes in the transformative power of a practice facility. He turned The Star, the Cowboys' training center, into an entire football ecosystem, with high-rise apartments, restaurants and a high-end club. How big can the NFL become? Jones loves to test his own "tolerance for ambiguity," as he often says. But L.A. is not North Texas in its hunger for the NFL and he knew it. To get L.A. fans off their phones and into a stadium, Jones told everyone that the league had to build something unforgettable. At an August 2015 owners meeting, Jones said Kroenke was the only one who had the "big balls" requisite to reintroduce the league after two decades away. This year, at least half a dozen owners and team executives have toured the new stadium. "It's going to be a phenomenal building," 49ers CEO Jed York says. "It's going to be a place that you need to see a game."
Problem was, the Rams couldn't move right into their new stadium after the relocation vote, forcing them into a holding pattern until it opened. They tried to market their homecoming after 21 years in St. Louis by dusting off throwback uniforms and the team's classic "Whose house? Rams house!" chant. A crowd of 91,046 showed up in September 2016 for the first regular-season home game, a win over the Seattle Seahawks. But the Rams learned that just because fans show up doesn't mean they root for the home team, especially if it's a loser. They finished 4-12. After less than a year in L.A., the reboot required a reboot. The team fired longtime head coach Jeff Fisher, and in January 2017, Kroenke signed Redskins offensive coordinator Sean McVay as head coach, a perfect West L.A. combination of precocious and attractive. Still, league executives were worried. McVay was only 30, the youngest head coach in modern NFL history. If he failed, the entire return to L.A. might too.
McVay didn't fail. He led the Rams to the playoffs in 2017 against the Atlanta Falcons, a game at the Coliseum that sold out in less than a week. In November 2018, the Rams appeared to break through for good at the Coliseum on Monday Night Football against the Kansas City Chiefs. Jay Z, Robin Thicke and Goodell were in attendance. The Coliseum was packed and electric. Quarterbacks Jared Goff and Patrick Mahomes combined for 891 total yards and 10 touchdown passes. The Rams' 54-51 win felt like something real, a connection between a city and a team after years of stops and starts with various clubs that used Los Angeles as leverage to build new stadiums in their home markets. The Rams shot up 9% in local TV ratings after that Monday night, a bump that continued as they reached the Super Bowl. But there was no second bump. This year, the Rams are less exciting and less dominant, with uneven fan support. Against the Tampa Bay Buccaneers on Sept. 29, a photo went viral of a mostly empty Coliseum at kickoff. It was ugly, and it served as a reminder to Chargers executives that no matter how embarrassing their team's own crowds are, L.A. is still up for grabs.
Chargers home games at Dignity Health Sports Park in Carson, California, have often seemed like road games for the L.A. team. Sean M. Haffey/Getty Images
OF COURSE, JUST because L.A. is up for grabs doesn't mean the Chargers are well positioned to grab it. In 2017, the Chargers also tried to reinvent themselves upon returning to the city where they last played in 1960. They went small. For a temporary home, they chose a soccer stadium in the middle of the California State University, Dominguez Hills campus, shaving its 27,000 seats to 25,300. The idea was to start fresh by offering a premium experience and, not incidentally, premium ticket prices. League executives loved the idea: an entirely new experience of fans climbing fences to get in. Spanos hosted pregame parties for family and friends not in a walled-off suite but under a low-key tent next to the stadium. Want to boo him? Shake his hand? Spanos was accessible.
But few fans tried to get access to him. The Chargers struggled to fill the tiny venue with home-team supporters, a fact first obvious against Philadelphia in Week 4 of 2017, when the Eagles recovered a Rivers fumble on the first drive and the crowd roared as if at the old Vet. Still, new head coach Anthony Lynn, a budding star who was hired one day after Spanos announced the move, led the Chargers to a 9-7 record. After wasting much of 2017 with relocation logistics, the Chargers made some modest marketing strides. They partnered with KABC, the top-rated TV station in L.A., announced a deal with iHeartRadio to reach 10 million listeners, and cooperated on a show in the style of HBO's "Hard Knocks" with Spectrum SportsNet. The team sold all 11,000 season tickets in 2018, but the stadium still felt more like a neutral-site college bowl game than the NFL.
In March 2018, the Rams and Chargers launched their SSL programs for the new stadium. It was harder than expected for the Rams and couldn't have gone worse for the Chargers. Most teams hire at least a dozen staffers to handle SSL sales for a new stadium, in addition to hiring a company like Legends. The Chargers, which outsourced most of the work to Legends, were flying blind in L.A., with no analytics department or sophisticated method of reaching fans. The Rams had a huge head start; they had sold 70,000 season tickets for the 2016 season in the Coliseum in six hours. All the Chargers had was "a couple of email addresses" of potential ticket holders, in the words of a team executive, and a slogan -- "Fight for L.A.!" -- that sounded less like a rallying cry and more like a schoolyard challenge to their future landlord, which did not go unnoticed by Rams executives, who mocked the slogan. The Chargers spent $3 million marketing "Fight for L.A.!" -- including $2.3 million on Facebook ads that didn't move the needle.
That fall, Chargers executives reviewed a bracing study that was available only to a handful of teams, league and Legends executives. It confirmed what some around the league had predicted all along: There was practically no market for Chargers season tickets, no matter the price. Legends officials later told league executives and those from other teams that it was the worst feasibility forecast they'd ever seen. In 2018, the Chargers were in the middle of a season in which they would finish 12-4 but rank 30th in revenue, one spot down from their final year in San Diego, owing largely to the small stadium. The team had sold only $60 million worth of SSLs, far behind the league's $400 million goal. "The projections were made before anyone had a clue," one Chargers executive says. "They were completely unrealistic."
Spanos and Chargers COO Jeanne Bonk then made a controversial decision. They slashed prices for 26,000 upper deck seats, lowering tickets to the $50 to $90 range, and dropped the SSL rate to $100 -- up to 15 times less than the Rams were charging for the same seats. The Chargers' reduced prices were higher than options suggested by Legends, which included the idea of abandoning the SSLs altogether. But for a bottom-line league, it was an unmissable flare that L.A. might never be a two-team NFL town.
The Rams got a heads-up one day before the Chargers' fire sale was announced.
Empty seats at the Los Angeles Memorial Coliseum have served as a reminder that L.A. is still up for grabs for the Rams and Chargers. Sean M. Haffey/Getty Images
THE RAMS WERE furious. Spanos had potentially cost Kroenke hundreds of millions. In the Chargers' news release, president of business operations A.G. Spanos, one of Dean's sons, wrote, "A family of four should be able to buy season tickets for the entire family and not need a second mortgage to do so." It felt like a subtle shot at the Rams.
Other owners and executives were stunned by the Chargers' deep discount and asked the league to intervene. The NFL had considered asking its senior vice president Brian Lafemina, trusted and respected by both the Rams and Chargers, to move to L.A. and serve as peacemaker. But before the league could officially offer the job, Lafemina left to run business operations for the Washington Redskins, and instead a host of league executives were assigned to help manage L.A. Kroenke and Spanos remained cordial with each other -- both are nonconfrontational -- but relationships between their staffs collapsed, becoming petty and personal, with both teams' executives ripping each other to confidants. "The Chargers were trying to save themselves," a high-level source involved in relations between the two teams says. "They want to be seen as a full partner, yet they did something that hit their partner hardest."
"They want to be seen as a full partner, yet they did something that hit their partner hardest."
High-level source involved in relations between the two teams
Spanos insisted the price drop wasn't a spiteful move but a reflection of weak demand, indicative not only of the larger problem of selling the Chargers in L.A. but also of the concept of SSLs in Southern California. There was no tradition of SSLs in L.A. No Lakers fan had to pay extra for the right to buy season tickets to watch LeBron James at Staples Center. It sounded to some fans like a racket, making an already tough sell even tougher. Everyone started pointing fingers, with owners mad at the league office for allowing a toxic relocation process and the league reminding owners that most of them voted for two teams in L.A. In the end, most owners rooted for the Chargers to not piggyback off Kroenke but try to duplicate the success of the soon-to-be Las Vegas Raiders, who have sold nearly $400 million in SSLs, double their projected number, for their new stadium opening in September 2020 off the Vegas Strip. What's more, a "fair amount" of the Raiders SSL buyers live in L.A. and will hop on I-15 on weekends, an executive with knowledge of the sales says. It has left a few owners and team officials worried and irritated that the Raiders have siphoned off part of an already wary L.A. fan base.
Chargers executives were convinced the Rams were lashing out because stadium construction was billions over budget. In the eyes of Chargers brass, the Rams had every right to be angry. But blowing up at Legends was tricky for the Rams because Jones had delivered the L.A. vote -- and Kroenke and Jones have become pals, a power clique of two. Still, Legends had never managed a project so massive -- and it had "gone off the rails," a source close to Legends says. It began in 2016, when the Rams realized that both initial estimates -- $1.86 billion in early 2015, which rose to $2.4 billion by late 2015 -- had been poorly calculated. Vendor costs ballooned because of competition with LAX's $14 billion renovation. The infrastructure was unexpectedly pricey, with a massive retaining wall required 100 feet below grade for the field. A record amount of rain in early 2017 complicated matters even more, filling the hole of the field with up to 15 feet of water that needed to be drained and costing the Rams 40 work days. And so the Rams announced in May of that year that completion would be delayed until 2020. In March 2018, the project had hit a cost of $5 billion, but the price continues to go up. StadCo officials now refer to it to owners and executives around the league as "our $6 billion stadium," although some executives insist it won't be that high. All the construction complexities have turned SoFi Stadium into "the eighth wonder of the world," Khan says. "It's amazing how much earth has been moved."
Kroenke was livid when his legacy project veered so badly off course, with no guarantee that SoFi will be filled once the novelty wears off. The Rams have joked to owners and confidants they'd happily accept extra financial donations from the league, but they haven't submitted a formal proposal and don't plan to. Kroenke is intent on delivering on his promise and not cutting corners. But Kroenke didn't become one of the richest men in America by spending cash without any limits, and unfortunately for him, a lawsuit has no hard cap.
AT A HOTEL bar last spring in Key Biscayne, a few owners and executives discussed a lawsuit that had not only failed to fade away, like most inevitable litigation following a team's relocation, but had mushroomed into a leaguewide headache, shoving the L.A. mess into each owner's email server and threatening everyone's bottom line. A group that included the city of St. Louis, the surrounding county and the Regional Convention and Sports Complex Authority were suing the NFL, claiming in a 52-page state court complaint that Rams officials and league executives violated the league's own relocation bylaws by failing to negotiate with the city in good faith, among other issues. The suit argued that the Rams induced the city to spend more than $17 million on plans for a new stadium that the team never intended to consider because Kroenke had planned long earlier to move to L.A. The complaint alleged breach of contract, unjust enrichment, fraudulent misrepresentation and business interference. The city is seeking billions in damages.
The NFL publicly dismissed the case as baseless and privately saw it as retribution from a city angry at Kroenke, whose departure forever destroyed his relationship with his home state. In his 2016 relocation application, Kroenke had written a scathing indictment of St. Louis both as a football city and as an economic engine, ignoring the loud and loyal crowds during the Greatest Show on Turf. But so far, the St. Louis plaintiffs have quietly won every court motion and decision, including a devastating defeat in the Eastern District of the Missouri State Court of Appeals, in a St. Louis courthouse, on June 12, 2018. The Rams' lawyer, Andrew Kassof, argued for the lawsuit to be sent to arbitration, corporate America's venue of choice. Kassof's argument hinged on what he saw as a clear and simple technicality: The NFL relocation policy was moot because the Rams had the right to relocate whenever they wanted, due to their year-to-year lease in St. Louis' then-Edward Jones Dome. The lease had expired in 2016, Kassof argued, so the Rams were free to leave.
Judge Philip Hess sounded suspicious. "Do the Rams have the ability to move without the NFL's approval?" he said.
"No," Kassof said. "They need the NFL's approval, and ..."
Hess cut him off. "Isn't that what this is about? The relocation policy of the NFL?"
It was a stunning moment in a nearly empty courtroom. Hess' question had forced Kassof to undermine his own case. Christopher Bauman, representing the plaintiffs, seized on it, winning the argument and keeping the case out of arbitration. Last month, the Rams petitioned the U.S. Supreme Court to issue a stay, and the high court denied it. Teams have been forced to provide eight years of phone records and emails for discovery -- and had to hire legal teams and data experts to sift through them. Kroenke has had to foot all the legal bills for the teams and league, part of an indemnification agreement the league presented to the Rams, Chargers and Raiders on the morning of the L.A. vote. The legal bills have reached eight figures for some teams.
St. Louis is now seeking each owner's cut of the Rams' and Chargers' $550 million relocation fees -- about $35.5 million per -- as restitution, infuriating owners. Over the past year, the league has dedicated a full hour at owners meetings to debating the merits of "Hard Knocks" but hasn't formally addressed the St. Louis case in depth, irritating some owners even more. The lawsuit has even reopened old wounds from the relocation process. Discovery turned up a damning email from a Carson project official outlining to St. Louis authorities all the ways the Rams seemed to be in violation of the league's relocation policy, providing a blueprint for the city of St. Louis' lawsuit. The email enraged league and Rams executives and undermined Spanos' reputation as the consummate company man, even though he didn't write it. "The perception was that Dean always put the league first and Stan was only out for himself," a team executive says. "Neither was ever completely true."
It has all served as a reminder that before the shotgun marriage there was an ugly divorce, ensuring nobody gets out unscathed.
Chargers owner Dean Spanos' team has struggled to draw fans in Carson, but he says he's proud to be part of the effort to fight for the NFL in Los Angeles. Tom Hauck via AP Photo
THE FIGHT FOR L.A. has carried a cost. The needs of the Chargers and Rams are as different as the personalities of their owners. The Chargers still have to find a way to matter in L.A. Late in the summer of 2018, the team hired Fred Maas, a longtime Spanos adviser, as chief of staff. His mandate was clear: increase team revenues. His first order of business was to kill the useless "Fight For L.A.!" slogan, preferring instead small steps to seek out L.A. Chargers fans. The team has sharpened its social media feeds, held a dog rescue day, and hired a Hispanic outreach coordinator who, unlike a predecessor, actually speaks Spanish. On the first day of the 2019 draft, the Chargers held a ticketed fan rally at the Santa Monica Pier, drawing a beyond-capacity 6,000 fans. Still, even executives playing the long game knew getting traction was a big challenge. "We were the most successful 7-11 in San Diego," a high-ranking Chargers executive says. "Now we're just another Whole Foods in L.A."
The Rams, meanwhile, need the stadium to reshape Inglewood and southwest L.A., while luring fans to show up, not just watch on TV. The Rams' 2018 TV ratings in L.A. were higher than the Giants and Jets in New York, the only comparable market and situation. And a prime-time game against the Seattle Seahawks this year outdrew a Dodgers playoff game head-to-head on TV. The Rams ranked 11th in total home paid attendance in 2018, despite playing in the league's oldest stadium. But at any given game, roughly 40,000 fans are theirs, 30,000 root for the visiting team -- as was the case when the Chargers played the Rams at the Coliseum in 2018 -- and the rest seem to be wearing Tony Romo or Bo Jackson jerseys. It's a leaguewide problem in the age of the secondary ticket market but an acute problem in L.A. The Rams' goal is to be the top choice in the region, knowing full well that an entire generation of fans might have been lost in the past two decades. If that fails, their goal is to be every L.A. NFL fan's second-favorite team, and to be the top choice for the next generation. The Rams are leveraging everything, paying all of their star players, trading away future picks -- they sent two first-round picks to Jacksonville for cornerback Jalen Ramsey in October -- to not only win now but also ensure SoFi Stadium is full, preferably in blue and gold.
"We are fighting over relatively penny-ante things. It's unfathomable."
Executive involved in Chargers-Rams spats
In the end, it'll fall to Legends -- and, by extension, Jones -- to nudge L.A. into embracing the Chargers and the Rams. Jones declined several requests to comment for this story; a Cowboys spokesman said "a lot is still happening and Jerry would prefer not to discuss it." A lot of what is happening involves the teams' staffs at war, mostly in a passive-aggressive manner via emails and texts. There have been spats over the types of golf carts the stadium will use and over the number of office spaces Chargers suite sales staff are entitled to, per the term sheet. "We are fighting over relatively penny ante things," one executive involved says. "It's unfathomable."
The disagreements inevitably return to the most divisive and, not coincidentally, most expensive issue: the Chargers' SSL prices. In October 2018, when the Chargers announced the price drop, the Rams felt burned, but Kroenke's StadCo -- to which Legends reports -- still pledged to the NFL that it would hire 20 new Chargers SSL sales staffers, along with administrators, bringing each team's SSL sales staff to 40. The Chargers believed staffing parity would give them a chance to succeed or, at least, have a fighting chance. But over the next four months, nobody was hired on the Chargers' side. In December and January, Legends presented a proposal with a Chargers sales staff number lower than 40, explaining that the Chargers didn't warrant as many staffers because there was so little SSL demand -- a low blow, in the minds of Chargers executives. So the Chargers invoked the nuclear option by appealing in writing to the league, forcing Goodell into the role of mediator. There was a conference call with Goodell, Kroenke and Spanos in mid-April, followed by a meeting of team executives in New York on June 20. The staffing issue, among others, was finally resolved -- the Chargers now have 35 SSL salespeople -- but it's still a sore spot with both teams, the Chargers feeling marginalized and the Rams resentful of carrying the financial burden of two teams, one billionaire indefinitely subsidizing another.
Jones has told associates he feels a deep responsibility to make sure Kroenke and Spanos are not only successful but feel taken care of. But the Chargers have sold a weak 25,000 season tickets to date, and the Rams have sold a nascent 40,000, with the hope from both clubs that sales will improve after the stadium opens. "People are not going to spend a fortune on something they haven't seen yet," a Chargers executive says. Sources from both teams insist there isn't any friction with Jones, which is either true or simply what they're saying to avoid getting on his bad side, hoping not to test strained relations. By all appearances, Kroenke and Jones are just fine, hanging out at the hotel bar at various owners meetings, sipping wine and Johnnie Walker Blue Label scotch. In August in Chicago, Jones and Spanos had dinner together after a session of bargaining with the players' union. In negotiations with the union, Jones has raised the so-called LA Exemption, a proposal calling for owners and players to consider diverting tens of millions outside of the normal stadium credits to help Kroenke defray the cost of the stadium. NFL team owners move in self-selected packs and cliques, and Jones will always gravitate toward an owner who can keep revenues spiraling in the right direction.
Nobody in the NFL is spending more to make more than Stan Kroenke.
DEAN SPANOS HOLDS a microphone at the center of a crowded, well-appointed room. It's a late September evening, at a Chargers reception at Luxe, a membership-only office building and high-end restaurant in Beverly Hills. Clad in his usual attire -- blazer over polo shirt -- Spanos appears relaxed before suite holders, business partners, elected officials, team employees and media, despite facing another tough season. The Chargers have played hard but haven't won as much as in the past, the fatigue from playing without any home field advantage for virtually four years perhaps starting to take a toll. The rare high moments have been tough to enjoy. After a dominant home win over the Packers on Nov. 3, the Los Angeles Times published a long column imploring the Chargers to leave for a market that appreciates them.
By midseason, Spanos would seem exasperated over periodic rumors and reports that the team will be sold or relocate again, responding to a report from The Athletic that the Chargers had discussed moving to London as "total f---ing bulls---." At the reception, a flat-screen TV behind him flashes a Chargers logo. "Everything we do, we do as a family," Spanos says.
His family still loves San Diego. Spanos loves San Diego. His father, Alex, a legendary businessman who died at 95 in October 2018, loved San Diego. It still isn't easy to say Los Angeles Chargers -- Fox broadcaster Troy Aikman slipped up on a recent Thursday Night Football telecast -- and NFL executives believe the Chargers could have raised $250 million a year in SSL revenue if they'd stayed, a figure that team executives dismiss as preposterous. If Kroenke had lost the L.A. vote to the Chargers and Raiders, he might have petitioned to move the Rams to San Diego, a source close to him says. But Spanos has told associates that he cut a better financial deal with Kroenke than most had initially given him credit for -- and he insists privately that he really doesn't mind being a tenant. The Los Angeles Chargers are here to stay, whether the city's fans want them or not.
"The stadium is going to redefine Los Angeles in that area for the next century. It's going to be incredible and we're very proud to be part of it."
Dean Spanos
Spanos gives a stump speech of sorts about SoFi Stadium, offering to set up tours. The Chargers are trying to remain optimistic. Team executives are hopeful they can hit $320 million in SSL sales for Kroenke and climb from 31st in revenue to the middle of the pack in the next few years. But others wonder if there's any real opportunity for the Chargers. In the annual Forbes list of NFL franchise valuations -- an imperfect ranking that nonetheless tickles owners' egos -- the Rams were fourth, at $3.8 billion, for the second consecutive year. The Las Vegas-bound Raiders jumped six spots to 12th. The Chargers ticked up only one spot, from 22nd in 2018 to 21st in 2019, and their valuation has increased only $420 million, to $2.5 billion, from 2016 in San Diego to now. The team hasn't added the envisioned $1 billion in value -- at least not yet. The Chargers' lack of popularity and inability to monetize however many SSLs they sell will always give them a low ceiling in a high-ceiling league.
"The stadium is going to redefine Los Angeles in that area for the next century," Spanos tells the crowd. "It's going to be incredible and we're very proud to be a part of it."
SoFi Stadium, set to open next year at a cost of $5 billion-plus, will be home to the uneasy arranged marriage between the Rams and Chargers. DANIEL SLIM/AFP via Getty Images
Kroenke is very proud to deliver it, associates say, giving the league something to celebrate in 2020: a glistening venue that might start to heal the relationship between a city and league, not to mention the rift between the two teams. The strained relations with the Rams seem to be on Spanos' mind as he speaks at Luxe. He thanks his future landlord, calling the Rams "great partners." No matter their differences, Jones, Kroenke and Spanos are in this fight for L.A. together, bound by the mandate that a stadium with the wow factor will, in fact, wow enough people to fill it.
"If I could have one wish this year, I'd wish that we could play them in the Super Bowl," Spanos says of the Rams. "But if I can't play them, we'll play anybody."
JERRY JONES STANDS at the 50-yard line of AT&T Stadium, not far from the sideline, pacing in tight semicircles, ringing his hands and looking anxious. It's an hour before the Cowboys play the Eagles on Sunday Night Football in late October, and the stadium is buzzing and frenzied, its own football energy field -- exactly what he has promised to deliver to L.A. As always, Jones is at the center and absorbing it all, wearing his typical game-day attire of a navy suit and powder-blue shirt with a Cowboys star pinned to his left jacket lapel.
"I'm nervous but feel good," he says with a grin. "This one we really need."
A few days earlier, Jones had stood with Kroenke outside a ballroom at the league meetings in Florida. Other owners drifted in and out of the conversation, but it was mostly just the two of them, a pair of power brokers who will take the league on a journey next fall. The Cowboys will be one of the Rams' 2020 home opponents, and it's easy to imagine a prime-time season and stadium opener between them. There are venues more iconic and louder than AT&T, but until SoFi opens, it's the standard for the power and potential of a new big-ticket stadium, a destination not just for football but for the profit-churning celebration of football grandeur. Nobody in the modern NFL has understood showmanship better than Jones, and he has never failed when he has gone big on vision. Next year will clarify whether there's such a thing as too big.
Jones lingers on the field a few more minutes. He moves to his private suite, flanked by his two sons and surrounded by 91,213 screaming fans as the Cowboys rout the Eagles, an iconic American evening in an iconic American city that might or might not transfer to another next September, when two L.A. teams kick off from underground and into the domed air.
|
Printer-friendly copy 
Email this topic to a friend
Okay Sports
#/media/File:Firefly.png)
