Andrew Brandt, from Sports Illustrated’s MMQB, had a good piece today on the five “myths” of relocation that warrant repetition here to help clarify some issues that far too many fans still put their weight behind. Honestly, his five myths have as much to do with the league as a whole as they do relocation, so they’re worth holding onto moving forward for LA Rams fans even with our franchise’s move a year old now.
1: Fans truly matter
This one always stings, but it’s certainly true.
No it wasn't. https://t.co/Yq8vpelMAh— TurfShowTimes (@TurfShowTimes) January 17, 2017
The ultimate reason why? The NFL is working in an era of nearly invincible inelastic demand. Whether it’s the Chargers in LA or the Raiders perhaps in Las Vegas, they know the product is good enough that it doesn’t matter where they play, just to support specific markets and get the best deals in doing so (more on that in #3...).
#2: Ticket sales truly matter
I’ve been saying this for quite some time, especially in relation to Rams Owner Stan Kroenke and the current priorities of the franchise. The Rams don’t need to win in order for Kroenke to make money (Brandt’s quote here):
The Chargers decision on venue over the next two years—a soccer stadium with fewer than 30,000 seats—tells us what we need to know about the importance of ticket sales in the revenue chain. This is not your father’s NFL: ticket revenue is nice but not what it used to be in the landscape of team revenues. The Chargers and Rams’ move to L.A. gives them access to numerous more “premium product buyers,” as the NFL calls them, than either team had in St. Louis and San Diego; they’ll also eventually add hundreds of millions to their bottom line from ancillary revenue opportunities. Suites will sell out; franchise values will soar. As for empty seats, that certainly won’t look good, but in the owners’ and league’s eyes, that is a risk worth taking.
I cited that whole section because I think it’s one of the most pervasive misunderstandings fans have right now, the idea that Kroenke must want to win more than anything if he cares most about money because winning equals more ticket sales equals more revenue. The more important angle to understand is that ticket revenue from general seating (and especially the kind that ebbs and flows with the general success of a team) doesn’t have as big of an impact on revenue as it might once have. You don’t even have to throw in Kroenke’s extensive holdings elsewhere. He’s going to make a ton of money whether or not the Rams actually win football games. We can stop using that as a reason to suggest he cares about the on-field product.
#3: “Solution” = Self-funding
#4: A next frontier?
This one’s interesting. Brandt notes that no city has filled the void that Los Angeles occupied for the last two decades as the temptress to dangle in front of NFL franchises. I think that’s perhaps an effect of recency. The Rams moved a year ago. The Chargers are holding a rally right now celebrating their undergoing relocation. The Raiders are up next with Las Vegas on tap.
I think there will be a top tier of options (St. Louis, San Antonio, Austin, etc.) that develop over the next decade or so once this current round of relocations wraps up. It’s just hard to see it now while we’re in the middle of settling out the Rams/Chargers/Raiders dance.
#5: Revenue isn’t the most important thing
Indeed, last year’s decision to award L.A. stadium rights to Kroenke was a testament to thinking bigger than a “stadium.” Revenue generation and brand enhancement were best served by having another “JerryWorld” in L.A., a place to host Super Bowls, drafts, combines, Final Fours, World Cup matches, etc. And elevated franchise values of the Rams and Chargers will raise the overall value of the NFL brand. Goodell spoke a couple years ago of an annual revenue goal of $25 billion by 2027; that drives the league and its “member” owners. Now with an annual revenue number of approximately $13 billion and growing at roughly $1 billion a year, the NFL is well on its way.
There’s no reason to dance around it. Kroenke’s stadium is at the epicenter of the NFL’s hopes to expand its revenue base. We’re watching it happen right in front of us.
It’s a cold world. If anything, the last year should have taught us all that as Rams fans, whether we got the outcome we wanted or not. Ignoring it doesn’t help us. Dismissing it doesn’t either.
Understanding where we as a fan family sit in the overall hierarchy of things is important. Like the Jeff Fisher ouster shows, unified voice from the fan base amplified by the power of media can have an effect. But it’s like a “Fire Fisher” chant. if we’re not in unison, it’s a thousand fans just making noise, yelling at their TVs.
Time to acknowledge the myths, fam.