The financial environment of football and the physical playing fields (now called "venues") have changed. Both national magazines and our own local newspapers have underscored the fact that our current stadium situation limits the Chargers' ability to do two critical things: (1) run the business franchise profitably and (2) field a competitive team — the kind of team our fans demand and Dean Spanos is committed to putting on the field.
The business of professional football is changing, and, as stated by the NFL and every team in the NFL, teams need stadiums configured to enable them to keep pace with the rest of the league. Without either a new stadium or additional renovations to the current stadium in order to facilitate additional revenue sources other teams enjoy, that gap will get wider every year. Soon, the Chargers will not be able to generate the revenues needed to operate the team in San Diego. We don't want Los Angeles to get our team.
If we want to keep the Chargers, we have to adjust to the new reality that professional sports is now both big business and big entertainment.
The Chargers are fortunate to play in a financially healthy league with no labor problems, a league that works to ensure smaller-market teams like the Chargers have a chance to compete. And although the bulk of shared revenues come from national broadcasting rights, and each NFL team gets the same amount each year, additional revenues are needed to keep pace with the escalating operating costs, which can only be achieved with a stadium that brings in new revenue, either by renovating existing stadiums or building new ones. The shared revenue scheme has not leveled the playing field. The larger markets have built stadiums which can generate home town revenues for the team. San Diego does not have that. To field any team let alone the Chargers, teams have to have stadiums configured to enable that to happen. To return to the glory days of Air Coryell and Dan Fouts, we need to replace or renovate the stadium so the Chargers can stay in San Diego and compete.
Unfortunately, shared revenue is only one part of the equation. 21st century profitability will be based on non-shared revenues which will come primarily from stadium sources such as concessions, parking, suites, club seats, advertising and any other activities which a team can develop and use to generate revenue. In 2002, these revenues will vary greatly from team to team. The Chargers will rank near the bottom of the league. Another team that is near the bottom in revenues, and thus is now in the process of seeking another city where it can obtain a stadium, is the Minnesota Vikings.
The San Diego Chargers are a privately owned team, and so specific information is not available. However, we can provide approximate numbers for the Chargers in the chart below.
The salary cap helps teams like the Chargers compete for star players by putting a ceiling on the total amount teams can pay players. But the salary cap is tied to the average NFL team revenue and it will rise as the average team revenue rises. Without new or renovated stadium configured for new revenue sources, the Chargers will fall further below average and will be faced with a tough choice: pay up to the salary cap and lose money, or pay below the cap and lose favorite, star players. The following is information for another near the bottom, the Vikings. The Chargers are in a similar position.
|Projected Rankings 1999 (Source: NFL CFO's Office)|
|Vikings||Chargers||Top Quartile Variance|
|Net Gate Receipts||25th||??||27.2%|
A rank position like this seriously limits the Chargers revenue opportunities. The Chargers rank near the bottom among all NFL teams when it comes to important stadium revenue sources like concessions, parking, suites, club seats and advertising.
Because of shortfalls in every stadium revenue category, The Chargers are projected to continue to rank low in the NFL in total revenue for 2002. This is unlikely to improve without a new or renovated stadium.
We also want a facility that better serves fans. More people than ever are looking for a way to attend a Chargers game. The Chargers also need to offer better accommodations — more restrooms, more concession areas, wider concourses — so fans no longer have to choose at half-time between the restroom and a snack.
The following chart clearly shows the direction of the NFL with regard to the importance of new stadium construction. We believe, if the Chargers are to remain in San Diego, a new or renovated stadium is a necessary component of being in business with the NFL.
|Stadium Progress Report|
|Georgia Dome||Atlanta Falcons||1992|
|ALLTEL Stadium||Jacksonville Jaguars||1995|
|Trans World Dome||St. Louis Rams||1995|
|Network Associates Coliseum*||Oakland Raiders||1996|
|Ericsson Stadium||Carolina Panthers||1996|
|Louisiana Stadium||New Orleans Saints||1996|
|Qualcomm Stadium*||San Diego Chargers
(Did not provide desired revenue increases)
|Washington Redskins Stadium||Washington Redskins||1997|
|PSINet Stadium||Baltimore Ravens||1998|
|Giants Stadium*||New York Giants/Jets||1998|
|Raymond James Stadium||Tampa Bay Buccaneers||1998|
|Ralph Wilson Stadium*||Buffalo Bills||1999|
|Cleveland Browns Stadium||Cleveland Browns||1999|
|Adelphia Coliseum||Tennessee Titans||1999|
|RCA Dome*||Indianapolis Colts||1999|
|Paul Brown Stadium||Cincinnati Bengals||2000|
|Foxboro||New England Patriots||2001|
|San Francisco||San Francisco 49ers||No Plans|
(Number one candidate for relocation)
The Story of Detroit’s two stadiums has relevance to San Diego.
Key facts that relate to us in San Diego:
Let’s all get on board to bring San Diego into the elite era of key cities of the United States. If Detroit can do it with its terrible winters, certainly San Diego can do it with its perfect weather.