The Morning Report
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I just finished listening to KPBS’ Tom Fudge interview with Chargers special counsel Mark Fabiani, which covered many of the topics we wrote about last week.
But they also moved over to an issue that’s sure to become central to the stadium debate if a solid proposal emerges for a public vote. (For now, much of the focus has remained on the actual process of selecting a site. I expect the debate and analysis will get more interesting and pointed once there’s an actual proposal to chew on.)
The topic they touched on: Why do the Chargers need a new stadium?
To compete, Fabiani said.
A caller, Rick from downtown I believe, then brought up a point I’ve been pondering, too. The Chargers argument seems to be the one once made by baseball teams — but they play in a league that has no salary cap. So, without a limit on what teams can spend on players annually, baseball teams’ competitiveness can be linked to how much revenue they have to spend on players.
In football, the financial scene is different. Teams can’t spend more than $109 million a year in players salaries and that money essentially comes from the league television revenue, which is split evenly among teams. So it how would a stadium make the team more competitive?
Fabiani argues that the team still needs the extra cash for coaches, facilities and signing bonuses. The signing bonuses are often key to an NFL player’s contract, as they are essentially the only guaranteed piece of football player’s contract. (For example, the Chargers gave LaDainian Tomlinson $10.5 million in signing bonuses when they drafted him in 2001, according to Pro Football Weekly.) But they’re prorated over the life the contract for salary cap purposes.
But Fabiani told Fudge: “You need that cash flow up front.”
The money for the extras like those signing bonuses, coaches’ salaries, practice facilities and ostensibly owner revenues comes from what’s known as unshared or local revenues — and that’s the extra cash the Chargers hope to corral from a new stadium with cooler club seats and luxury boxes and more advertising options.
I’ll have a more in-depth look at this as we move closer to a stadium proposal, but that’s the basic primer.