These are so many massive revenue streams for NFL owners that the local fan base gets about as much respect as Jim Tomsula had as 49er head coach. Deals like the $27 Billion national TV deal are well known. Others not so much. The NFL has a brazen system in place that actually provides financial incentive for teams to move.
The NFL “relocation fee” is a vivid illustration of a business model that befits of a Sopranos episode. Quite simply, when a team wants to move to another turf, they pay off their fellow bosses with a large sum of money. Sports Illustrated reports that both the Chargers and Rams will pay $645 million for their relocation fee and the Raiders will pay $378 million. That’s some serious money being relocated!
So what happens to this approximate $1.6 billion? It all gets split up and pocketed by all the owners. Bada bing!
Why does it cost so much just to change business locations? It seems perfectly legal for a business to move, and it’s not as if an owner in New York is having the fan base impinged on in a move of two teams in the far west.
Is the exorbitant price-tag recognition that something egregious is happening to the fans, so it’s aimed to release the guilt of the moving owner? I’m not sure buying absolution is the most effective way towards achieving it, even if you are being shaken down for $645 million.
Or maybe it’s just good ol’ hush money –so the other owners will look the other way and vote to approve the relocation. I was surprised that only one owner voted against the iconic Oakland Raiders becoming the Las Vegas Raiders–that is until I learned how much money each owner made from the move. The relocation fee is a billion dollar business enterprise within the NFL structure–and it’s a business that couldn’t conflict more with the premise of loyalty on which the NFL prides itself.
How exactly do the owners decide on those exorbitant numbers anyway? $645 million seems like a number just pulled out of a hat. Fair market value for relocating seems to be about $99. It’s hard to picture any sort of formula determining that it will cost $645 million to change cities—are they calculating it using a derivative of a per mile change? Or the total number of days that loyal fans have loved them over the years?
The only sense I can make out of it is that they are factoring in the price of a league selling its soul.
Teams that relocate do make a lot of money in the short term–which is why they are willing to pay so much. Teams get wooed with giant public sector gifts. The Nevada government gave the Raiders a $750 million subsidy to build the new stadium–money that owner Mark Davis could not get from Oakland–and away the Raiders go.
Of course, this is after the Raiders already took $200 million from the City of Oakland for stadium renovations in 1995 when they returned after their failed move to Los Angeles. Deadspin reported that the City of Oakland will have to be paying off this $200 million plus another $150 million from unsold PSL’s they were stuck with long after the Raiders are gone.
Maybe the Raiders shouldn’t take their team name so literally?
The past moves of the Raiders and Rams have not just been nightmares for the cities, they have also not been long-term wins for the team and the league. If the past repeats itself, after about 20 years in Vegas the Raiders will be looking for a new home again. At that time, the Nevada government will have no more money to give and the Las Vegas Raiders will not be a shiny new team to their brand new fans anymore.
I wonder how long it will take for the Chargers to follow this recent pattern and return to San Diego? The Chargers have been in Los Angeles less than a year and it has been so painful for them that even the most move-happy owners must be cringing. The Chargers not only cannot fill their 20,000 seat soccer stadium, but many of the fans in attendance wear the visiting team’s colors. There are already stories about a return to San Diego.
How many times lately have you heard an owner, player, or coach say, “This is a business.” Yes it is a business, but it’s also something more. Local teams become part of the community fabric. Rivalry games like the Oakland Raiders vs. San Diego Chargers build over time and gain a lore and historic value that can’t be replaced overnight.
The NFL should adopt a strategy of incentives to encourage teams to plant their flag in a city and build a relationship with fans that lasts over generations. Instead, the league is a feeding frenzy with money flying around from cities to money hungry rambling owners who then share their windfall with their fellow owners.
Residents of Oakland have now had their hearts broken twice by the Raiders, and the City of Oakland is in debt paying off the money they gave the Raiders. This is not how a community or fan base should be treated. Multi-billion dollar national television contracts are making stadiums the equivalent to a recording studio–and some owners don’t even appear to care where they are located.
The NFL should be ashamed.