NFL Merry-Go-Round: Relocation Roundelay

[UnclearInitial]

Before you get too far down the road with the idea of the Los Angeles Jaguars, understand that moving the team from Jacksonville isn?t as simple as it might seem. Not today, not a year from now and probably not even four or five years down the line.

Never mind that outgoing owner Wayne Weaver, who saved new owner Shahid Khan the trouble by firing coach Jack Del Rio on Tuesday before announcing the sale, promised that Khan has no plans to move the team. Never mind that Khan put out a public statement saying he was fully committed to bringing Jacksonville its first Super Bowl victory. Just remember that there?s a lease to get out from underneath and it runs through the 2027 season. The lease has one very difficult threshold the team must cross before it can get out, says former Jacksonville Mayor John Delaney, a lawyer who helped write the deal.

?The team would have to show that because of lack of attendance it?s losing money for three straight years and that?s probably a difficult thing for an NFL team to do,? Delaney said. ?That?s there for if the city doesn?t support the team. If we don?t, we shouldn?t stick the team with a long-term lease. But if we support it, they can?t just pretend they?re losing and expect to get out.?

Marc Ganis, the president of SportsCorp, backed that sentiment. Ganis has reviewed the 100-page lease between the team and the city and said it?s ?one of the more difficult leases you?ll see for a team to get out of.?

That threshold, more than the actual money that?s owed to pay off the lease, stands in the way of a possible quick move of the team. In the mid-1990s, Delaney says the city took out approximately $115 million in bonds for improvements on what is now EverBank Field. Delaney guessed the rough amount of the payoff on the bonds would be ?in the area of $60 million.? For a team planning to move, that?s not significant.

?The city you?re moving to would pay that off very quickly if that?s all you?re talking about,? Ganis said.

But fighting through the first threshold could be difficult, if not far more expensive. Under the growing television revenue the NFL receives, teams have never been more profitable. The average value of an NFL team has climbed to approximately $1 billion. In August, Jacksonville was ranked by Forbes as the NFL?s least valuable team at $725 million.

?Even if the team declared that it was losing money, the issue would be litigated and all the books from the team would be subpoenaed,? Delaney said. Litigation could take a year or two, making the quickest the team could leave more than four years away. In addition, the NFL is generally averse to having team financial records made public.

?Could you find a way out of the lease? Yes, but it?s going to take some very serious work and there?s going to be a lot of uncertainty along the way,? Delaney said. ?People in that situation don?t like uncertainty.?

That comes on top of Weaver?s effort to keep people in Los Angeles from buying the team. A source close to billionaire Los Angeles developer Ed Roski said Roski offered Weaver

$800 million

two years ago for the team, but was rebuffed.

?Weaver wasn?t interested at all in moving the team,? Roski said at the time. ?That?s not the legacy he wants to leave.?

Weaver reiterated that point Tuesday. Although there is nothing in the sales contract barring Khan from moving the team (two sources said the NFL would not allow that language in the agreement), Weaver said he trusts Khan.

?It?s hard to write something to say you are going to force somebody to keep something here,? said Weaver, who added that he expects his grandson to grow up to be a Jaguars fan and attend games in Jacksonville. ?You have to trust individuals? integrity. I?ve no doubt Shahid will do what he says he?s going to do. ? I had to be comfortable that his plans are to keep the team in Jacksonville. There?s not a doubt in my mind he will keep this team in Jacksonville.?

Weaver said Khan, who purchased the team for a reported $760 million, plans to purchase a home in Jacksonville. Khan, 61, built his fortune in the auto parts business after moving to the United States from Pakistan at age 16. He lives in Urbana, Ill., and earned a degree from the University of Illinois before eventually working his way up from employee to owner of Flex-N-Gate.

So Weaver lost more than $40 million (Roski tried to buy it in the worst part of the recession, and the Jaguars couldn't even come close to sellouts back then) just to keep the team in Jacksonville? Wow.

How does Khan handle this transaction when the Jaguars are dealing with minimal local revenue? Although Khan has been trying to get into the NFL for almost two years (he tried to purchase the St. Louis Rams in early 2010), he is also taking out approximately $350 million in loans to purchase the team, according to a report by Forbes.com.

Ganis has said numerous times that Jacksonville is one of the worst teams in the NFL in making local revenue from sponsorship deals and other avenues. At the same time, with a 10-year collective bargaining agreement in place between owners and players, Ganis said the value of NFL teams is about to spike again.

?You have cost certainty and you have a product that is going through the roof in terms of popularity,? Ganis said. ?I think we?re about to see a massive increase in the value of teams.?

Roski might want to help him out with that.

[GeorgesL]

I guess according to reports on the sale of the Jaguars, you can take them off the list of potential L.A. suitors.

[DaytonBlue]

wish St. Louis had the guy who drew up the Jaguars lease do the Rams' lease...

...although the skeptical side of me believes leases can always be broken after Sonicsgate

[bosrs1]

I guess according to reports on the sale of the Jaguars, you can take them off the list of potential L.A. suitors.

I wouldn't just yet. Nothing about the lease is new information and if anything Weaver being gone eliminates their biggest tie to Jacksonville. While they may not go to LA directly in the end I think they are now an even bigger risk to move away potentially to St. Louis.

[GatorHunter]

Jacksonville Jaguars owner is to sell the team to a Illinois resident. New owner committed to make Jacksonville Super Bowl Champions.

http://online.wsj.com/article/SB10001424052970204449804577068521537649462.html?mod=googlenews_wsj

http://msn.foxsports.com/nfl/story/Jacksonville-Jaguars-set-to-be-sold-after-firing-Jack-Del-Rio-112911/

[dbadefense1990]

Well there goes the Jags' bid to LA. Never had a chance to get out of there anyway, with the whole 30-ish year long stadium lease. But this should end all talks of the Jaguars bolting out of East Florida.

[TBGKon]

All info on this subject and the rest of NFL Relocations can be found here in this thread:

http://boards.sportslogos.net/topic/84249-nfl-merry-go-round-football-in-la/

[Mac the Knife]

Well there goes the Jags' bid to LA. Never had a chance to get out of there anyway, with the whole 30-ish year long stadium lease. But this should end all talks of the Jaguars bolting out of East Florida.

Um... I think if anything, it intensifies the discussions, folks. As stated in the other thread, all Khan has to do is (i) show three straight years of financial losses (not impossible by any means, particularly in Jacksonville), (ii) get the NFL owners to approve the move, and (iii) pay off the remainder of the existing lease as a buyout clause. Hardly insurmountable hurdles.

[Mac the Knife]

The Falcons are set to move into an open air stadium right down the road from the dome in 2017 if they can get the thing approved.

"If they can get the thing approved" in this case meaning if they can get public financing, which the city's elders have said isn't going to happen anytime soon, given the relative youth of the Georgia Dome.

[Mac the Knife]

It's basically a giant, average arena. Nothing too spectacular for football. It's great for the Final Four and NCAA tourney games and concerts and such.

Hypothetically, how early could the Jags possibly leave? Are we looking at maybe next year, or will they need to wait longer?

With the Jags current lease, they need to prove that they've lost money in three consecutive years otherwise they can't break the lease until 2028.

With some creative shuffling a la the Dodgers I'm pretty sure you can show a loss.

In Jacksonville's case, I suspect it won't even take much creative accounting. Simply pull a Rachel Phelps - let the on-field product go to hell and just feign interest in selling tickets, corporate sponsorship deals, etc. That'd probably do it inside of five years.

[Mac the Knife]

Again, I think it would be possible for even Jerry Jones to show he is losing money if he cooks the books/sets up the right arrangement.

Au contraire... it's not only possible for Jerry Jones to be showing a loss right now, it's almost an absolute certainty that he actually is.

If you combined all the business entities tied to operating the Dallas Cowboys (if you followed the Dodgers and Rangers bankruptcies, you know just how complicated the business structures behind operating those clubs can be), between amortized stadium construction costs, debt servicing, up-front payments here and deferred payments there, he's almost certainly showing a loss on the books - and will be for at least the next 3-7 years.

[McCall]

If you read the espn article with all of Weaver's quotes, how he says the Jags will be there long term, how Kahn is committed to the area and buying a house there, how he reiterated to Weaver that he was keeping them there, and Weaver saying he turned down LA because he wanted them in Jacksonville, you get the feeling a move is eminent and that he's setting himself up to deflect any blame and negative press.

[STL FANATIC]

Here's the first article I've seen really give credence to the idea that it could be a double move with LA and STL ending up with teams and JAX ending up without one. Granted, it's a blog and the "insider" quote within is unnamed and still not tied into the circles of Kroenke or Khan.

All anybody is really doing is speculating at this point; this is just speculation from people who know a bit more.

http://profootballtalk.nbcsports.com/2011/11/30/if-jags-move-l-a-may-not-be-the-destination/

If the Jaguars move, it may not be a foregone conclusion that they move to Los Angeles. There?s a chance they?ll move to St. Louis, with the Rams returning to L.A.

As one executive with a team other than the Jaguars told PFT on Wednesday morning, ?People that I trust think there is a chance [Rams owner] Stan Kroenke moves the Rams to L.A. and [shahid] Khan moves to St. Louis.?

[TFoA]

The Falcons are set to move into an open air stadium right down the road from the dome in 2017 if they can get the thing approved.

"If they can get the thing approved" in this case meaning if they can get public financing, which the city's elders have said isn't going to happen anytime soon, given the relative youth of the Georgia Dome.

Pretty much. I'm not holding my breath at all for the Falcons to move out of the Dome any time soon. They're in that one for the long haul.

It's weird considering the fact that it's a young stadium, but it's already outdated since it was built after the cookie cutter era but before the new crop of stadiums showed up. As long as they keep making renovations, it'll be okay, but it's far behind when it comes to other stadiums' quality.

As far as the Jaguars are concerned, if they find a way to get out of that lease in like 2 years or less, the word "lease" will be come synonymous with "bull ."

[Gothamite]

Interesting. Khan didn't want any limited partners, so he bought everybody out, not just Weaver. He owns 100% of the team.

Make of that what you will.

[Mac the Knife]

Interesting. Khan didn't want any limited partners, so he bought everybody out, not just Weaver. He owns 100% of the team.

Make of that what you will.

Several different things can be extrapolated from that, none of which are definitive, but all of which are at least to some extent telling in one way or another...

- No partners means there's absolutely no question of who's in charge, nor any chance of a lawsuit by a minority owner, trouble skirting NFL Bylaws regarding minimum ownership interest requirements, and some other things.

- No partners means there's no one to internally hold him (by injunction, for instance) back from moving the Jags should he choose to do so. You'll remember with the Browns for instance that a minority owner sued Art Modell for a brief period before it was settled. No chance of that if you own the show entirely.

- No partners means you keep a tight lid on financials, showing them (for the most part) only to whom you want, when you want, and for your purposes. A perfect way to cook the books and, say, show a loss for three years running.

[TBGKon]

Here's the first article I've seen really give credence to the idea that it could be a double move with LA and STL ending up with teams and JAX ending up without one. Granted, it's a blog and the "insider" quote within is unnamed and still not tied into the circles of Kroenke or Khan.

All anybody is really doing is speculating at this point; this is just speculation from people who know a bit more.

http://profootballtalk.nbcsports.com/2011/11/30/if-jags-move-l-a-may-not-be-the-destination/

If the Jaguars move, it may not be a foregone conclusion that they move to Los Angeles. There?s a chance they?ll move to St. Louis, with the Rams returning to L.A.

As one executive with a team other than the Jaguars told PFT on Wednesday morning, ?People that I trust think there is a chance [Rams owner] Stan Kroenke moves the Rams to L.A. and [shahid] Khan moves to St. Louis.?

Mike Florio and PFT.com are a pretty reliable source. Not saying they're always 100% correct, but that guy's got ears everywhere.

[CubsFanBudMan]

I'll say this about St. Louis: There's probably no place that honors its shared NFL history better than that city does with the Cardinals and Rams. Make room for that teal Brunell, Boselli, etc. in that ring of honor...

On a side note, if this plays out, should a new team's colors be blue and gold while the Rams return to yellow? Or perhaps navy and teal would be a good fit... ah, so easy to speculate on the possibilities.

[McCall]

I'm really hoping he just moves them to LA and flips them for the Rams, keeping them in St. Louis. I don't wanna have to all of sudden start cheering for a new team. Let them take the Rams spot in the NFC West and the Rams can take theirs in the AFC South.

[TheOldRoman]

I'm really hoping he just moves them to LA and flips them for the Rams, keeping them in St. Louis. I don't wanna have to all of sudden start cheering for a new team. Let them take the Rams spot in the NFC West and the Rams can take theirs in the AFC South.

You'll cheer for the Jaguars and like it.