NFL Merry-Go-Round: Relocation Roundelay

[Gothamite]

Indeed.

And of course year-to-year leases are untenable. They are for any significant company. Your big accounting firms wouldn't settle for a year-to-year lease on five floors in Midtown. Condé Nast didn't sign a year-to-year lease when they moved into the new World Trade Center building; they locked in 25 years. The NFL itself signed a 20-year lease on its new 345 Park Avenue headquarters.

Long leases allow companies to protect costs and budget over many years. That's the way business works. Why should we expect an NFL team to be any different?

[The_Admiral]

Condé Nast is gonna regret this in a year when they get a sweet job offer in Brooklyn and have a chance to really...find themselves, you know?

[Gothamite]

Ha!

Condé Nast's bohemian days were all spent around the round table at the Algonquin. They're now in "full service-building" mode with a mail room, washers in every apartment and a pool on the 60th floor that they keep swearing they'll start to use any day now.

[STL FANATIC]

Year-to-year leases are like any other contract. Unfavorable when you're looking for long-term security, but quite favorable if you have multiple parties bidding on your services and you have no risk of losing your value.

That last part is why we see athletes prefer long-term deals often. They risk losing their value due to injury or just father time.

But an NFL football team isn't going to lose its value in the intermediate term. If that could happen, the Rams would be desired by nobody. So in this case, a year-to-year lease is actually a good thing for the Rams. It's what gives them all their leverage.

I don't doubt they'd prefer to exercise that leverage as soon as an acceptable deal presents itself and find the long-term option. But it's not because a year-to-year lease is untenable, it's because the things that go with it (mainly a subpar stadium) is untenable. If the year-to-year part was untenable, all the Rams would have to do is not turn it year-to-year and sign on for their remaining 10 years.

But we all know it's not the year-to-year part that bothers them at all.

[Gothamite]

They didn't sign for the remaining ten years in the dome because it's no longer an acceptable facility. Every year they spend there is a year they remain at a competitive disadvantage; they'd have to be extremely poor businessmen to sign for those ten years.

That's not to say that year-to-year isn't good as leverage, as you say. But for anything other than leverage, year-to-year is indeed untenable for a business. Municipalities could then raise the cost of rent higher than a long lease would allow. That's why they lock these rates in when they do.

Nobody's willingly choosing to sign a year-to-year if they have any other option, as these three teams all do.

[STL FANATIC]

But that's sort of the point. These teams all have other options. So year to year is totally fine with them so that they can explore them. They know they don't have to worry about the rent being raised on them or anything like that because they'll just bolt to a different city.

It's obviously not their desired long-term arrangement, but I think the notion that it's untenable for an NFL team for even a few years is silly. It gives them the power.

[Gothamite]

A year or two? In the abstract, maybe not. But beyond that?

The year-to-year leases in these particular stadiums continue to put the clubs at a financial disadvantage. Which was my reading of the article; the league doesn't want these situations to go on indefinitely.

[hbgoo1975]

Now I know what the NFL stood for 20 years ago, Not For Los Angeles.

[TheRicSlick]

Now I know what the NFL stood for 20 years ago, Not For Los Angeles.

That spells NFLA....

[hbgoo1975]

I know.

[Cosmic]

A year or two? In the abstract, maybe not. But beyond that?

The year-to-year leases in these particular stadiums continue to put the clubs at a financial disadvantage. Which was my reading of the article; the league doesn't want these situations to go on indefinitely.

A financial disadvantage comparatively, but it's not like they're really hurting. It's like me complaining about my BMV because my friends have Bentleys. As much add we all think LA is a sure thing, there's a risk any time you pick your whole business up and move it halfway across the country. It's not unusual for a business to "pause" before a big decision.

[Gothamite]

Your comparison only holds if you and your friends are racing those cars and you're being left behind as they get progressively newer and more powerful machines.

Dollars that come in via the stadiums (including merchandise sales) aren't subject to revenue sharing. Teams with greater stadium-related revenues obviously have more money coming in. While player payroll is a fixed cost, nothing else is. So the teams with better stadium revenue streams will have more money to spend on marketing, improving facilities, hiring better coaches, building a scouting network, and everything else. So yes, teams without those streams, or with lessened streams, are at a competitive disadvantage against teams that do. Are these revenues a deciding factor? Of course not. But football is a game of inches, as the hoary chestnut goes, no less so in the board room than the gridiron.

And when every other team has revenues that these few don't, I can see where "untenable" becomes the word that springs to mind. Especially when that competitive disadvantage can get magnified every year the situation stays the same

[BBTV]

While player payroll is a fixed cost,

Is it really though? I would think that teams that make more money would be better positioned to offer the huge signing bonuses and guarantees that the have-nots simply can't. The "cap number" may be fixed, but seems to me that in reality the actual expenditure isn't.

[Gothamite]

You're right, but my point was that people think that a salary cap means teams all spend the same across the board. It's not true, even leaving aside things like signing bonuses and the like. But you show how it's even more important for these teams to get out of their current stadiums.

[DustDevil61]

While not saying much other than there was a sizeable contingent of Rams fans at the Rams/Chargers game in San Diego, there's this article concerning the Rams. It does mention that Stan Kroenke didn't acknowledge them, remaining as mysterious as ever.

[tigerslionspistonshabs]

While not saying much other than there was a sizeable contingent of Rams fans at the Rams/Chargers game in San Diego, there's this article concerning the Rams. It does mention that Stan Kroenke didn't acknowledge them, remaining as mysterious as ever.

They spent a fair amount of time focusing on those 'Bring back the LA Rams' groups..of which I saw quite a few. Signs, banners, photos, all that.

[STL FANATIC]

Yeah, they made their presence felt and the TV cameras took note. None of that is shocking to me. I think we knew that group of passionate fans exists, and I still don't think the fan bases or potential fan bases will be a particularly relevant part of this decision.

Not directly related, but on the subject of stadium situations and the use and "approval" of public funding: http://espn.go.com/espn/story/_/id/11902037/dc-united-atlanta-braves-cut-taxpayers-stadium-issues

[The_Admiral]

Over a quarter billion for an MLS stadium oh gtfo

That stuff with Cobb and the Braves is beyond the pale. I think we went over that astroturfing stuff in the Braves thread; I know we've gone over all things Phoenix Coyotes.

[Gothamite]

Yeah, they made their presence felt and the TV cameras took note. None of that is shocking to me. I think we knew that group of passionate fans exists, and I still don't think the fan bases or potential fan bases will be a particularly relevant part of this decision.

They will only if St. Louis is counting on the NFL's bylaws to delay or forestall a relocation.

[STL FANATIC]

Can't say I follow exactly what you're saying there. But nonetheless, I know you think St. Louis fans haven't been very good and think it will matter. We disagree on these points.