Could Farmers Field Lure Chargers To Los Angeles?

Farmers Insurance agreed to pay $700 million for the naming-rights to a proposed NFL stadium in Downtown Los Angeles. The deal would be one of the most lucrative naming-rights agreement in history, and the stadium hasn't even been approved yet. We speak to U-T reporter Matt Hall about the latest news on the fast-moving L.A. Stadium proposal, and what this could mean to the Chargers future in San Diego.

Guest

Matt Hall, reporter for the San Diego Union-Tribune

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CAVANAUGH: The proposed football stadium in LA now has a name. Will it soon have San Diego's team? I'm Maureen Cavanaugh, coming occupy These Days, farmer's field is where Angelinos are planting hopes that pro football will return to their town. The push toward a new football stadium in LA has moved from I rumor to a juggernaut that may sweep up the San Diego charges of we'll get the latest, and then an encore performance featuring the classical guitars of the Romeros, in a concert of Latin American and Spanish music that's all ahead this hour on These Days. First the news.

I'm Maureen Cavanaugh and You're listening to These Days on KPBS with lights, cameras, and action. Supporters of a proposed new football stadium in downtown Los Angeles held a big event this week to reveal the name of the new venue. If it's ever built, and if an until team ever plays there, it will be called farmer's field. It's not a very flashy name for a stadium in tinsel town, but its price tag is impressive, the naming rights deal with farmer's insurance is reportedly worth as much as $700 million. All this has San Diego Chargers fans on pins and needles of the Chargers seem to be the most likely team that may change partners and dance in that new LA stadium. [CHECK AUDIO] my guest, Matt Hall, reporter for the San Diego Union Tribune. Matt, good morning.

HALL: Morning, Maureen.

CAVANAUGH: You know, I want to invite our listeners to join this conversation if you have questions or comments about this new naming deal for this proposed stadium in Los Angeles, and what it might mean. Give us a call at 1-888-895-5727. Of has this ever happened before where you sell the naming rights to a stadium before it's even been approved or you should construction?

HALL: It's not unprecedented of it's pretty rare. There's a baseball field in oak hand that the As would love to be playing in that is not, you know, been built yet. So this is not the first time [CHECK AUDIO] I think what's most interesting about the naming rights deal that was announced yesterday, that's kind of been out in the news for a few weeks now was is that this is the largest and pretty astronomically so, I think that this eclipses a $400 million deal for city field in New York, and you know be seven hundred million is what the reports are saying this is if there are two NFL teams, and we're already ahead of ourselves, so to say there are two NFL teams that are gonna be playing in Los Angeles in the near future is going way too far. But the reports are that the deal will be worth a billion dollars if two NFL teams end up playing at farmer's field.

CAVANAUGH: Well, I mean, talk to us a little bit about the actual announcement yesterday because that was sort of -- led to the sort of 15 fare feeling of this, even though this whole idea of this stadium is just really certainly not a done deal yet.

HALL: Yeah, no, again, we're really premature. What you've was all about, the people behind this proposal, AEG, really wanted to make a big splash, really know the ways of Hollywood and LA, and their hour long news conference was anything but a news conference. They were given their cheerleaders, they had a light show, they had a cast of characters that rivaled a Disney production, even from Oscar de La Jolla to magic John son who is a potential owner involved in this financially. But then they paraded out a bunch of LA football greats, Jim Brown, Deacon Jones, Wilsey Greer, Willie McGinnis, and on and on. Yesterday was really about momentum and trying to make a splash and show everyone there are some politicians and business leaders and labor readers that want this to happen.

THE COURT: Tell us, Matt, if you would, where precisely would this new stadium, this Farmer's field, be located, and what are some of the hurdles that need to be worked on out before, you know, they can get the money, and the construction can start ask all of that?

HALL: AEG is eyeing really downtown Los Angeles. It would go near the staples center. [CHECK AUDIO] and they would actually have to demolish the west hall of the LA convention center to make room for the field. So that's one of the things that complicates this. Of and the project would cost anywhere from a billion to $1.5 billion, which, are in this economy would, you know, is a lot of cash. And we'll see what happens, they are the earliest stages of their proposal, and they expect our hoped to get the city approvals and the entitlements to start building in about a year. So if that happens, then things may start to move hoar quickly, but they would need some environmental exemptions and a range of approvals that, you know, aren't -- they don't have that yet.

CAVANAUGH: Right.

HALL: Interesting enough, there's a second proposal in LA that kind of got not a lot of attention yesterday.

CAVANAUGH: I was gonna ask you about that, yeah.

HALL: You know, in San Diego, if someone holds a news conference, and there's an opposing side, chances are the players on that opposing side are waiting close by to jump on the media and get their point across. Of that didn't really happen yesterday, the other side kind of deferred to AEG, the other side is proposing about a $800 million field of it's shovel ready, they already have their permits and approvals, it would be 22 miles outside of LA in the city of industry, and the kind of knock on that proposal from people who like to knock it is that it's too far from the city of LA to really attract kind of the power players and the folks who would, up, fill the luxury seats and the more expensive seats at a stadium like that.

CAVANAUGH: Just to get back to the farmer's field proposal from time to time, you said that it could be -- could cost about a billion dollars to bring this thing all together for construction and everything. How much would the taxpayers of the city of LA be on the hook for that bill.

HALL: Well, AEG has gone to great lengths to say that it would be entirely privately funded. Fill Anches who is the billionaire in Denver who would extensively bank roll this thing, would pay for it, the naming rights deal would go a long way to pay for it. And they say that no public money would be used, which, you know, depending on who you're talking to, is true or not, what this proposal would involve is 300 and $50 million of bonds that the city would have to issue to demolish the convention center and to pay down the debt that exists on the Convention Center currently. So that would, you know, put a crimp in the borrowing capacity of the city, and clearly that is a use of, you know, the public dollars right there. Of.

CAVANAUGH: What about that name, farmer's field? It's been getting a lot of flack.

HALL: A lot of people have been joking about it, you know. Farmers insurance has been in California for 83 years, I believe. And obviously just put their name on the -- or excuse me, the golf tournament at Torrey Pines that was just played this last weekend. People on the internet were making fun of it yesterday on twitter and stuff. But it's got some alliteration, maybe they'll be called the LA landscapers. Who knows?

CAVANAUGH: I want to let our listeners know issue we are taking your calls at 1-888-895-5727. My guest is reporter Matt Hall with the San Diego Union Tribune. And let's get down to the question that really sort of gets to a lot of people here in San Diego. Who, if farmers field is built, who's gonna play in it? What was the Chargers reaction to this whole big event yesterday with the announcement of this new name and this new proposed stadium?

HALL: Yeah, I talked to mark Fabian, the Chargers point person on this, and he said, look, it's clearly significant that there is this much money being advanced this early in the process in terms of the naming rights deal. His take, and maybe this is promising to Chargers fans, it depends on how you read the tea leaves, but maybe that bode it is well for San Diego, that San Diego could get some sort of naming right it is deal that's similar of what's interesting is that the deal at Qualcom and at Petco were far, far lower dollar amounts. I forget the dollar amounts off the top of my head. But nothing close to what was announced in LA. And the City of San Diego proposal which has been -- the Chargers and the city are looking at a site in downtown as most people know by now, kind of east of Petco Park, the early price tag for that is eight hundred million, and a lot of money needs to come to the fore to build that.

CAVANAUGH: Right, eight hundred million for this stadium and not for the cleanup and not for the demolition, and not for a lot of things that would have to accompany that bell of the stadium. I'm wondering, the San Diego Chargers, is it just because we're in San Diego and we know that the Chargers are looking for a new stadium that we think automatically that they would be the first choice or the first candidates to move to LA? Are there other teams?

HALL: That's a good question. And a lot of attention has been focused on San Diego. But there are others who are potentially movable. There's about seven total teams who, because of their leases issue they either have exit strategies, clauses, or their leases are coming to a close that could move. On that short list, I think the most serious, the most likely candidates are the Chargers because they can pay early termination fee and leave every year between now and the end of their lease in 2020. This year, if the team had left and they have indicated they're gonna play here next year, that the cost of that -- that would be $25 million 678 other teams, sluice rams like the Chargers got their start in LA. So that's I possibility. They have had some stadium issues there. Of the Jacksonville jaguars are a team that has had a tough time filling seats, and they're a possible team, and the Minnesota Vikings which are negotiating for a new stadium now. I think the state's governor is pushing for that. So there are a lot of, kind of, pieces on the chess board. San Diego because of its proximity and the ease of its lease is generally youred at the top or near the top of the list.

CAVANAUGH: And it's not just considered by us near the top of the list. Of I think there was some sort of pole that the fox station, fox sports --

HALL: Yeah, [CHECK AUDIO] had a pole, it was interesting, I hooked at the pole results before and after the news KPBS. And the Chargers, they were -- the Chargers Vikings and jaguars they had a fourth category for an existing team, and a 5th team for an expansion team. Which, at this point, I don't think there's any way the NFL could expand. So that's really a nonstarter. But by and large people were picking the Chargers at a much greater rate than the other two teams of the question was, who would you want to play which is a slightly different question than who do you think would come or who's most likely to come?

CAVANAUGH: Oh. Uh-huh.

HALL: So keep this in mind ooze you're thinking about those results.

CAVANAUGH: So are there any new developments that you can share with us about the effort to build a new stadium in downtown San Diego? Where do we stand on that.

HALL: That's a good question. I mean, the idea is out there to build on this site. It's a small site, it's a contaminated site. And it's further made problematic by the fact that a bus yard is on it now and operating. So you'd have to find a new home for the bus yard, move it, are [CHECK AUDIO] then just construction of the stadium alone is expected to be, again, about eight hundred million of the question is how to fund that. So that's what the city and the team are apparently talking about behind closed doors. The NFL has routinely chipped in hundreds of millions of dollars towards these stadium projects in recent years. That fund is now depleted. And so one of the things it keep an eye on is in the NFL's new collective bargaining agreement, the players' deal ends at the end of this month, and they have to negotiate a deal with the NFL owners. Is if someone some sort of fund comes into existence or is continued that would allow some amount of money to be continued towards the Chargers stadium or any NFL stadium. And then the question becomes how much money can the city contribute through redevelopment doctors, and of course as most people know, the governor has proposed phasing out redevelopment agencies which may make that a nonstarter as well, and cause all sorts of other problems. Will there really is a lot of issues to follow here, which makes it such an intriguing story.

CAVANAUGH: It is an intriguing story. I want to get your feeling on this, though, you know, when people in San Diego hear about this, hear about what's going on in Los Angeles, not just one but two proposed stadiums. Of and the Chargers, you know, saying things that as you understand encouraging but they do have this option to leave each year. And I'm wondering whether or not that makes most people that you come in contact with more encouraged to get this stadium built, are keep the Chargers here or just say, well, it's, you know, it's inevitable so we don't really care.

HALL: I think there's a mix in a reaction right now. Of [CHECK AUDIO] about what the Chargers' future will be. But look, what yesterday was about, and what Mark Fabiani is about when he's talking and explaining what the Chargers want to do, it's all in negotiations. This is a song that's been sung for a long, long time. The NFL is a very, very powerful organization. I recently saw a report by Forbes that said 32 of the world's most valuable sports franchises, in the top 44, so 32 of the pop 44 sports franchises on this planet are NFL teams. That shows that the NFL is very good at business. And so one of the interesting things about this conversation, just kind of take a step back from this, is LA might be more valuable to the NFL as kind of this boogie man to scare or pressure governments in other cities to spend money on stadiums to keep their teams here.

CAVANAUGH: Good point.

HALL: It's kind of an interesting point, you know?

CAVANAUGH: That is a good point. And another thing to keep in mind too, much has been made of the $700 million, but Farmers doesn't actually have to spend any of that money unless the stadium gets built right.

HALL: Right. That is over time, it's a 30-year deal. I think it would be 20 million the first year, and I'm not sure if -- they didn't go into great detail or any detail really at their news conference, so what we know has come through some pretty informed media reports. But I think it's a -- I was talking to some folks yesterday, it seems like a pretty interesting business decision. They basically get our fore5 years, assuming there's no money paid till the first year. They get 4 or 5 years of free marketing. Farmer's field was trending really high on twitter yesterday and on the lips of everyone in Southern California, certainly, and in a lot of people around the kitchen. So it's a lot of money, but there's a certain up side to them, and there doesn't seem to be too much risk especially for the next four-year, people will use their name and they don't have to pay a lot for it.

CAVANAUGH: Right. As lack luster as the name is. Matt hall, thanks so much for speaking with us today. I appreciate it.

HALL: Sure, Maureen. Thanks for having me.

CAVANAUGH: I've been speaking with Matt hall, he's reporter for the San Diego U Union Tribune. If you would like to comment, please go on lineup, KPBS.org/These Days. And stay with us as These Days continues here in just a few moments on KPBS.