How Much Would the Chargers Be Worth if They Stay in San Diego?

A look at the franchise value if it does not end up in L.A.

The annual Forbes list of NFL team values is out. So how are the Chargers doing in the grand scheme of the NFL financial world? Not too shabby.

San Diego’s professional football team is worth $1.525 billion according to the respected financial publication, making it the 22nd-most valuable franchise in the National Football League (keep in mind that money is only realized if the team is sold, this is NOT what a franchise earns each year). Of course the next question is, if the team is worth so much in San Diego, why move it to Los Angeles?

Many financial experts feel the value of a franchise that moves to L.A. will double. However, it would be less than that if two teams end up there and A LOT less if a team like the Redskins was to move. Washington is third on the list at $2.85 billion, proof that your team does not have to be successful (or even liked) to be profitable. The Chargers, Rams and Raiders all rank in the bottom third of the league in franchise value so the nation’s second-largest media market looks awfully attractive to them.

But moving to Los Angeles is not the only way for a team to increase its value. I mean, what about San Diego? How much would the franchise’s value increase if a new stadium is constructed here? The answer is complicated but we can get a ballpark number, and it’s not insignificant.

Take, for example, the 49ers. They’re a somewhat surprising 5th at $2.7 billion. San Francisco saw a 69 percent increase in its worth despite dropping from 12-4 to 8-8 and missing the playoffs. The reason for that is the opening of the $1.2 billion Levi’s Stadium. Despite the fact it’s 45 miles from the team’s traditional San Francisco fan base the technological terror the Niners and city of Santa Clara have constructed is certainly a financial boon for the team, thanks to the sale of Personal Seat Licenses (PSL) and a massive jump in advertising dollars.

Michael Ozanian wrote the story on NFL team values for Forbes (you can read his entire piece here). I asked him what kind of increase the Chargers might expect if they were to move in to a new facility in their current market.

Now, several factors need to be taken in to consideration like the structure of the lease, advertising revenues, PSL sales, contribution to construction costs and more. So let’s just make the math easy and assume a 50-50 public-private funding plan on a $1.1 billion facility.

“That would mean something like $40 million net (after what the team pays from stadium revenue towards construction financing) to the team,” says Ozanian. “Apply a multiple of five and you get $200 million. Probably a decent guess.”

So a new stadium in San Diego would instantly increase the Chargers value to $1.725 billion, which would move them from 22nd in the league to 17th in the league and leapfrog the following clubs:

- Atlanta Falcons ($1.67 billion with a new stadium being constructed)
- Minnesota Vikings ($1.59 billion with a new stadium opening next year)
- Carolina Panthers ($1.56 billion)
- Arizona Cardinals ($1.54 billion)
- Kansas City Chiefs ($1.53 billion)

That’s probably a conservative estimate, too. If the Clippers can sell for $2 billion, an NFL franchise in a shiny new stadium in America’s Finest City would likely sell for well north of that because it would be easy to make back the money on that investment.

The average value of an NFL franchise rose 38 percent from 2014 to 2015. Television contracts and record ratings are a major contributor to that number but if it the league was to make that kind of leap again, say after 2022 when new TV deals will be negotiated, the Chargers would be worth $2.38 billion (based on the $1.725 billion with a new stadium number).

I would have to assume that would be at least on par with playing second fiddle to the Rams or Raiders in L.A. Perhaps it would behoove the Spanos family to think about re-establishing a line of communication with the local government, after all.

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