Leigh Steinberg knows what Los Angeles can offer an NFL franchise, both on the field and for its bottom line. A longtime NFL agent often identified as the inspiration for Tom Cruise’s character in the movie “Jerry Maguire,” Steinberg served as co-chairman of the “Save The Rams” initiative that unsuccessfully sought to keep the Los Angeles Rams from relocating to St. Louis in 1994.
More than two decades later, Steinberg’s wish was granted. After months of deliberation, the NFL granted permission Tuesday for St. Louis Rams owner Stan Kroenke to relocate his franchise to Inglewood, California, where he plans to build a multibillion-dollar facility that will serve as the league’s hub on the West Coast.
The San Diego Chargers have the option to share the new Inglewood stadium with Kroenke, provided that the two sides can reach a financial agreement. Aside from a brand-new, $1.8 billion stadium for home games, Kroenke envisions an environment that will eventually host NFL Media studios, Super Bowls, Pro Bowls and the league’s annual scouting combine.
For the Rams, the move to Los Angeles has some clear financial benefits. The franchise will skyrocket in value while gaining access to a robust media market. The sale of stadium naming rights, luxury suites, personal seat licenses and local sponsorship deals will net tens of millions of dollars annually – all of which is exempt from the NFL’s revenue-sharing model.
But the Rams’ new home also grants them a distinct advantage when attempting to sign quality free agents. Los Angeles’ glamorous lifestyle, temperate climate and ample business opportunities make the city a tempting option for top-notch players searching for their next team.
“There’s an allure to playing in warm weather, to the fact that a cold winter day in California is going to be in the 60s, that there are beaches and a great lifestyle,” Steinberg said in an interview with FOXBusiness.com. “So I do think it’s a plus, certainly for the Rams, lesser for the Chargers, if they move, because San Diego’s got a lot of the same advantages. You know the proximity to Hollywood and the glamor; it can always be a draw.”
The Rams’ impending move to the country’s second-largest media market will certainly improve the franchise’s public exposure. Superstar athletes like Green Bay Packers quarterback Aaron Rodgers and Cleveland Cavaliers forward LeBron James have proven it’s possible to land major endorsement deals while playing in a small-market city, but the Rams’ arrival in the City of Angels presents a unique opportunity for NFL players to ingratiate themselves to a region that is rife with business potential.
“[The Rams] will be a in a sales position that’s enviable,” Steinberg added. “For free agents, they’ve got the opportunity to start fresh and new, being adopted by Angelenos or Southern Californians as one of their own, because they’ll be starting to the LA market in the first year or two just the same way that the incumbent roster will.”
The Inglewood project is closely situated to public transportation hubs, including major freeways and Los Angeles International Airport. The area already boasts a following of Rams fans, many of whom held events in the months before the NFL’s announcement to demonstrate their desire for the franchise’s return. And Kroenke’s plan to host events at the stadium development year-round, rather than just during the NFL season, will bolster the venue’s earning potential
The Chargers have yet to determine if they will join the Rams in Inglewood, but many experts predict that they will, given the franchise’s financial interests in the greater Los Angeles area and the lack of a clear stadium solution in San Diego.
“You have major corporations that will buy all the luxury boxes, will do sponsorships, naming rights [deals]. You have a vibrant local TV and radio market. It’s a jewel in terms of ancillary revenue opportunities. Bottom line economics, it’s a no-brainer,” Steinberg said.
The NFL’s long-awaited return to Los Angeles is being met with a good deal of optimism, but some concerns remain. Critics have expressed concern as to whether Los Angeles-area fans will turn out in sufficient numbers to support a pro football franchise. Poor attendance was a key factor in the Rams’ and Raiders’ decision to leave the city in the mid-1990s.
But the United States’ sports climate has changed significantly since the NFL last played games in the city. Regular-season NFL games regularly draw sellout crowds and tens of millions of television viewers. Bolstered by massive media rights deals, the league splits a purported $10 billion in revenue annually. The Dallas Cowboys, arguably the NFL’s most popular franchise, are worth an estimated $4 billion.
Steinberg is confident that the NFL’s latest Los Angeles experiment will succeed.
“There’s been a cultural shift in the way Americans experience entertainment,” he said. “The NFL is not only the most popular sport; many weeks it dominates the top 10 in Nielsen rating for nighttime football, which means it’s not only the most popular sport, it’s the most popular form of televised entertainment.”