Chargers owner Dean Spanos is willing to bet nearly $1 billion that Los Angeles is the right home for his franchise.
With no clear path to a new stadium in San Diego, Chargers ownership announced Thursday that the team will relocate to the greater Los Angeles area, where they will eventually share the Los Angeles Rams’ $2.6 billion stadium in Inglewood. The Chargers will reportedly play their home games at the Stubhub Center, a 30,000-seat soccer stadium, until the Inglewood facility opens in 2019.
The Chargers’ planned move won’t come cheap. Spanos will reportedly pay at least $550 million over 10 years for the right to move to Los Angeles – tied for the richest relocation fee in NFL history. The team can also pay the fee over a longer period of time for an additional $100 million, ESPN reported.
“After much deliberation, I have made the decision to relocate the Chargers to Los Angeles, beginning with the 2017 NFL season,” Spanos said in a letter to fans on Thursday. “San Diego has been our home for 56 years. It will always be part of our identity, and my family and I have nothing but gratitude and appreciation for the support and passion our fans have shared with us over the years.”
The massive relocation fee is just one element of the Chargers’ financial burden. NFL executives, intent on keeping the Chargers in San Diego, offered $300 million toward a new stadium last January if the team agreed to stay in the city – money that Spanos will no longer be able to claim in Los Angeles. In addition, the franchise will have to pay $12 million to the city of San Diego to terminate their lease agreement for Qualcomm Stadium (NASDAQ:QCOM), the NFL Network reported.
While the NFL’s $300 million offer is no longer on the table, the league has taken steps toward easing the Chargers’ burden. The league’s owners voted in December to allow Chargers ownership to borrow a portion of their relocation fee from a bank and pay the balance over an extended period of time, rather than the 10 years originally mandated.
Long-term, it’s unclear if the NFL can support two NFL franchises. During their first season in Los Angeles, the Rams averaged attendance below 90% capacity at the L.A. Coliseum, which ranked 28th among the league’s 32 franchises, according to ESPN.
Nonetheless, Spanos expressed confidence that a move to Los Angeles will ultimately benefit his franchise. The team is expected to provide further detail on their move at a press conference
“LA is a remarkable place, and while we played our first season there in 1960 and have had fans there ever since, our entire organization knows that we have a tremendous amount of work to do,” Spanos added. “We must earn the respect and support of LA football fans. We must get back to winning. And, we must make a meaningful contribution, not just on the field, but off the field as a leader and champion for the community.”
Spanos’ entire letter can be read below.