Thursday’s news that the Chargers were leaving San Diego for Los Angeles was greeted mostly with indifference in the city acquiring its second NFL team in a year, after 21 years with none.
The Los Angeles Times’ website published coverage of the move under the headline: “Live updates: Will anyone care about the Chargers in L.A.?” Los Angeles’s CBS station sent a reporter to Orange County, soon to host the new team’s headquarters, in search of Chargers fans and came up empty.
The decision by Chargers owner Dean Spanos to leave behind a passionate fan base for an apathetic one created a public relations hit for the NFL in the middle of its playoffs. But to sports economists, the Chargers’ move is the rare sports team relocation that should be treated as good news — because it’s not contingent on hundreds of millions in public spending.
In November, San Diego voters rejected a ballot initiative that would have generated $550 million for a new Chargers stadium through raised hotel taxes. The Chargers’ move is the third major sports relocation in 18 months involving L.A. that has saved hundreds of millions in public money. The Rams’ move last year came in spite of an offer from St. Louis city government to provide $150 million for a new stadium. And in July 2015, underwhelming support in Massachusetts for public spending to attract the 2024 Olympics led the United States Olympic Committee to nix Boston and select Los Angeles as America’s bid city in the contest to win the 2024 Summer Games.
Andrew Zimbalist, an economics professor at Smith College, has been writing since the 1990s about the reasons why professional sports stadiums and events are a waste of public money, most recently with his 2015 book “Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup.”
Since he started publishing reports explaining why sporting events do not generate the billions in economic impact, Zimbalist said, situations such as San Diego voters’ rejection of a stadium tax have become more common, which he attributed to a combination of economic realities and public knowledge.
“Over the last 20 years or so, the fiscal situation in cities, states and even the federal government has become more difficult, and there’s also been an increasing body of literature that I think has had some impact on making people more skeptical about throwing public money at teams and stadiums,” Zimbalist said.
The Chargers will play the next two seasons in the StubHub Center in Carson, before moving to the new $1.8 billion stadium Rams owner Stan Kroenke is building in Inglewood. While the stadium is privately financed, the city of Inglewood does plan to reimburse the Rams $60 million for public infrastructure upgrades around the stadium, and about $8 million per year for security, medical services, and shuttle services during stadium events, according to the Los Angeles Times.
Vanderbilt economics professor John Vrooman thinks the Chargers move is the rare NFL team relocation that actually could hurt the league financially. Two monopolies in separate cities is more valuable to the league than a duopoly splitting Los Angeles’s football revenue, Vrooman said. And even if the Rams and Chargers can both build successful fan bases in Los Angeles, they’ve eliminated the city as potential leverage for other NFL teams. Other clubs engaged in stadium disputes have been able to threaten to move to LA for years, Vrooman noted.
“The NFL’s worse off; the Rams are worse off because now they have competition,” Vrooman said. “The only people better off, probably, are Los Angeles football fans, who will see competition drive down prices.”
Brad Humphreys, a professor of economics at West Virginia University, said Los Angeles-area residents should be happy the Chargers will not be adding significant new public costs for the area’s local governments, but shouldn’t expect any real economic benefit of a second football team. Whatever money fans spend on the Chargers next year is likely money they would have otherwise spent on the Rams, or the Dodgers, or one of the many other entertainment options in the region.
“Professional sports are really good at moving economic opportunity around, but it’s just existing economic opportunity that already would have occurred somewhere else in the greater Los Angeles area,” said Humphreys. “There’s no evidence that one team, two teams, or any number of teams will provide tangible new benefits in the local economy.”
And while Humphreys acknowledged he’d like to think the research he and others have produced concluding public spending on sports is wasteful is swaying more voters and elected officials, he expects taxpayer-friendly moves such as the Chargers’ will continue to be the exception. Los Angeles and New York are probably in a class of their own, in terms of cities with media markets so large team owners will consider moving there without a major public subsidy. The next NFL team expected to move, Humphreys noted, is the Raiders to Las Vegas, where state government has cleared the way for $750 million in public money to help build a new stadium.