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San Diego Union-Tribune

Panel finds Chargers to be city asset | But it couldn't evaluate finances, need for stadium

February 19, 2003

Abstract:
Ron Saathoff, committee chairman, said the Chargers did not provide necessary financial data.

The National Football League provided information that showed the Chargers dropped from 15th in revenue to 26th among the league's 32 teams, but it refused to provide expenses, citing "proprietary concerns."

The Chargers insist the Qualcomm Stadium site could qualify as a redevelopment area, but the committee concluded it would be "extremely difficult if not impossible."

Full Text:
Copyright SAN DIEGO UNION TRIBUNE PUBLISHING COMPANY Feb 19, 2003

The finance committee set out to evaluate the Chargers' financial condition and determine whether the team needs a new stadium to remain financially viable. It could do neither.

The committee's findings:

TEAM DATA

Ron Saathoff, committee chairman, said the Chargers did not provide necessary financial data.

The National Football League provided information that showed the Chargers dropped from 15th in revenue to 26th among the league's 32 teams, but it refused to provide expenses, citing "proprietary concerns."

The task force suggested an independent third party review the expense data, but "that too was declined."

Without a complete financial picture, the task force could not reach conclusions about the team's net income, financial woes or the need for a new stadium, Saathoff said.

AN ASSET

After looking at the Chargers' economic contribution to the city, the committee concluded the team is an asset.

Analysis by the Barrett Sports Group, which was hired by the city to work with the task force, showed:

The annual economic output associated with the Chargers is estimated to be $149.2 million.

Of that, $89.9 million is direct citywide spending, primarily stadium and game-day expenses, including ticket sales, television and radio contracts, luxury suite sales, concessions, novelties, parking and advertising.

Indirect spending included hotels, restaurants, bars, convenience and grocery stores and gas stations.

The team impacts more than 1,300 jobs in industries throughout the city.

The team's presence is estimated to generate $62.7 million in employee compensation annually.

The organization gave $1 million to local charities in the year studied.

COSTS

The Barrett report said the stadium costs the city $9.5 million annually.

The stadium turns a $1.8 million profit when comparing revenues and expenses. Factor in annual bond payments from the 1997 renovation and the cost of guaranteeing 60,000 general-admission seat sales, and the profit becomes a $9.5 million loss. The city makes up this loss by redirecting other city revenue to the stadium, including revenue from its Sports Arena leases.

OPTIONS

The Chargers insist the Qualcomm Stadium site could qualify as a redevelopment area, but the committee concluded it would be "extremely difficult if not impossible."

Declaring the stadium site a redevelopment area would allow the city to retain a portion of any future increase in property values. That could be a key source for financing a public portion of a new stadium.

PUBLIC MONEY

The committee identified a list of potential public funding sources, although each has legal and political ramifications.

They include:

Property taxes

Sales and use taxes

Transient occupancy taxes

Business license taxes

Utility-users taxes

Franchise fees

 



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