- Voice of San Diego - https://www.voiceofsandiego.org -

How the NFL Regulates Franchise Relocation (Or Tries To)

By now you’ve heard about the Chargers’ stunning partnership with their arch-rival Oakland Raiders to build a $1.7 billion (!) stadium in Carson, south of Los Angeles.

There have been a lot of stadium agreements and plans in L.A. over the last 20 years. None has been realized. It’s different this time, we’re told, even though the Chargers have played footsie with Carson before [1].

It’s worth reviewing, then, how the NFL regulates the relocation of its franchises.

The NFL’s Constitution and Bylaws [2], in Article IV, Section 3, states:

No member club shall have the right to transfer its franchise or playing site to a different city, either within or outside its home territory, without prior approval by the affirmative vote of three-fourths of the existing member clubs of the League.

Teams can next apply for relocation between Jan. 1 and Feb. 15, 2016 [3]. With 75 percent of the league’s 32 teams needed for approval, it would take nine “no” votes to deny a move.

No team has switched cites since 1997, when the Houston Oilers moved to Tennessee and later became the Titans. That move came on the heels of the Cleveland Browns’ “transfer” to Baltimore [4] in 1996, and after the Rams and Raiders left Los Angeles (Anaheim in the Rams’ case) in 1995.

Twenty years later the battle for L.A. (or the battle to use L.A. as leverage) is officially on.

Which raises the question of whether the NFL can, or would, prevent a team from moving.

The Raiders became the most notorious contradiction of the league’s ability to do so when they moved to Los Angeles in 1982, via court battle over the unanimous objection of league owners.

The one instance of the modern-era NFL successfully blocking a move came in 1996, when then-Seattle Seahawks owner Ken Behring shipped the team’s equipment to Anaheim [5] in an attempt to seize the abandoned Los Angeles market.

That was a unique situation. The team had nine years remaining on its stadium lease. The league was wary of abandoning yet another market after the relocations of the Rams, Raiders and Browns. NFL officials threatened the Seahawks [6] with sanctions [7] and county officials obtained a restraining order [8] to prevent the team from relocating.

Behring returned the team to Seattle and later agreed to sell the franchise [9] to a local buyer.

No such scenario exists for the teams currently flirting with Los Angeles. The Raiders, Rams and Chargers are each on terminable leases in their current homes.

The Chargers’ lease at city-owned Qualcomm Stadium runs through 2020, but the team can get out of the lease [10] between February 1 and May 1 of each year. The lease termination fee decreases on a sliding scale, with the team owing the city of San Diego a little over $15 million if it decides to skip town in 2016.

(Incidentally, that is not enough to pay off the debt the city still owes on the stadium renovation from 1997. The city owes $57 million and will make payments on it until 2026. This year, the payment is $4.8 million [11].)

Before the big Chargers-Raiders announcement, the NFL attempted to reassert its authority over franchise movement, and of the Los Angeles market specifically.

After the January announcement of Rams owner Stan Kroenke’s plans to build a stadium in [12] Inglewood, Pittsburgh Steelers owner Art Rooney II said the Rams still had to follow the rules of relocation.

“That’s why we have league committees and approval processes,” he told the Los Angeles Times [13]. “I think we’re comfortable that we could stop a team legally from moving if it didn’t go through the process.”

Still, the league hasn’t maintained unanimity. Rooney’s statements came in response to Dallas Cowboys owner Jerry Jones saying the Rams could simply choose to move without league approval. [14]

The league tried to further maintain control of the L.A. market by establishing a committee [15] that would study and coordinate any moves to Southern California.

So, under what criteria could the NFL actually keep a team from moving?

The NFL’s Policy and Procedures for Proposed Franchise Relocation [16] states:

Article 4.3 confirms that each club’s primary obligation to the League and to all other member clubs is to advance the interests of the League in its home territory. This primary obligation includes, but is not limited to, maximizing fan support, including attendance, in its home territory. Article 4.3 also confirms that no club has an “entitlement” to relocate simply because it perceives an opportunity for enhanced club revenues in another location. Indeed, League traditions disfavor relocations if a club has been well-supported and financially successful and is expected to remain so.

Teams aren’t supposed to just pick up and move simply because the cash looks greener elsewhere:

Because League policy favors stable team community relations, clubs are obligated to work diligently and in good faith to obtain and to maintain suitable stadium facilities in their home territories, and to operate in a manner that maximizes fan support in their current home

The Chargers would be regarded as having fulfilled this obligation to the letter, with their oft-repeated mantra of “we’ve made nine stadium proposals in 14 years” in San Diego.

The policies and procedures list 12 “Factors That May Be Considered In Evaluating The Proposed Transfer [16]” of a team to a new city. None would appear to bar a potential Chargers relocation. Particularly the following:

The adequacy of the stadium in which the club played its home games in the previous season; the willingness of the stadium authority or the community to remedy any deficiencies in or to replace such facility, including whether there are legislative or referenda proposals pending to address these issues; and the characteristics of the stadium in the proposed new community

Mayor Kevin Faulconer has agreed to speed up his stadium task force’s timeline [17], but so far no actual plan exists. The dilapidated condition of Qualcomm Stadium and the team’s long crusade for a new stadium bode well for the Chargers.

Again, the Rams might just move to L.A. anyway and beat the Chargers out of their leverage [18]. Assuming the Rams, or the Chargers and Raiders, or some combination of the three, actually applies and is approved to relocate, what will it cost them?

Franchises that moved in the past were charged a relocation fee. The Oilers paid $28 million for their move to Tennessee [19], and the Rams $29 million to move to St. Louis.

The numbers most commonly thrown [20] around [21] for an L.A. relocation fee range from $250-$500 million.

Finally, would the Chargers-Raiders stadium in Carson be eligible for a loan of up to $200 million from the NFL? Both teams reportedly expect to receive loans of $200 million each [22] from the NFL stadium fund. A league spokesman said, “A stadium project can be eligible for league financing provided the project and its sponsors meet certain criteria. A Carson project would be eligible and could apply if it met those criteria.” But stadium researcher Neil deMause points out [23] that the league’s G-4 lending criteria requires “the project must not involve any relocation of or change in an affected club’s ‘home territory.’”

The NFL defines “home territory” [2] as:

“the city in which such club is located and for which it holds a franchise and plays its home games and includes the surrounding territory to the extent of 75 miles in every direction from the exterior corporate limits of such city.”

Logic dictates, and as any diehard Chargers fan will tell you, that Carson is not home territory.