Los Angeles will get a football stadium, but will they get a team?

Los Angeles City Council has given approval for Anschutz Entertainment Group (AEG) to build a $1.2 billion football stadium in downtown LA, next to the Staples Center which is also owned by AEG.  What is interesting in this whole process is that I just discussed about a week or two ago that AEG was selling off all of its Los Angeles based business, and this would surely include the football stadium which will be called “Farmer’s Field”.  This may mean that the price for AEG’s Los Angeles operations just went up by several hundred million (or maybe even more than a billion).  As noted in the article listed above, there were many interested parties at the City Council vote, including individuals from Staples Center with “Farmer’s Field” t-shirts, some fans wearing the colors of the old Los Angeles Rams, and other potential interested parties.

Deadspin notes that the San Diego Chargers could have been the ones to move to LA, if the deal had been done sooner, but that is no longer a possibility.  Likewise, the Oakland Raiders are said to not be favored, as the state would not want to fund such a big project just to move a team from one part of the state to another.  That would indicate that the new stadium will be looking for an NFL team from outside of the state.  The Vikings and Jaguars look to be stuck in their current cities for quite a while, so the next choice falls down to the St. Louis Rams and Buffalo Bills.  Both teams have had troubles drawing fans to games in recent years, and Stanley Kronke (owner of the Rams and Arsenal) would certainly have to consider the possibility of moving the Rams to one of the major markets in the U.S. if St. Louis doesn’t start to helps the Rams out some more.  I’d say Kronke is in a good position to hold St. Louis hostage for some tax money, as he’ll simply just say he will pack the bags and move off to LA if they don’t.

He would not be the first owner to make this threat, and he certainly will not be the last.

I’ve started to get the questions about the economic impact the new stadium will have on Los Angeles.  The answer is a complicated one.  Research shows that facilities don’t necessarily bring big gains to the economies of local regions.  That said, stadiums do bring fans and business to local restaurants, bars, and hotels that are located near a sport facility.  A good discussion of this can be found in the San Jose Mercury News, were professors Roger Noll and Dan Rascher (both very prominent sports economists) discuss the economic impact of the NHL lockout.  Dr. Noll notes that this local business will probably suffer, but not the economy as a whole.  Dr. Rascher adds on that there is some impact for the San Jose with the Sharks not playing, because only 28 percent of those who come to Sharks games live in San Jose.  Considering the size and scope of the Los Angeles area, it is quite possible that you would see similar percentages of out-of-town visitors for Los Angeles NFL games.

So for now, the answer is: we shall see.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: