The Economic Viability of an NFL franchise in Los Angeles

In March of 2013 the hopes of bringing an NFL franchise to Los Angeles were dashed when the NFL abandoned the process. The Rams haven’t had a football team since 1995 when the Rams and the Raiders both left. It is the second largest city in the US and therefore a great market, but recent attempts to bring a team have been unsuccessful. I believe that despite the large potential for a football team in Los Angeles, the city is not a viable candidate for a team.

Many teams have called Los Angeles home, but there were two NFL teams that played in Los Angeles: the Rams from 1947-1995 and the Raiders from 1982-1995. The Rams played in the Los Angeles Coliseum from their inception to 1980, when they left for two major reasons: the Coliseum’s large size made it difficult to sellout, resulting in local TV blackouts and costing the team ad revenue, and the neighborhood where the Coliseum resides was very dangerous at the time. They moved to Anaheim, and then left in 1995 for St. Louis.

The Raiders moved to the Coliseum in 1982, followed by years of success (including a Super Bowl in 1984). However, Raiders owner Al Davis never got the NFL to institute pay-per-view telecasts and the Los Angeles Coliseum Commission never gave promised stadium upgrades, so the Raiders returned to Oakland in 1995.

The market in Los Angeles is undeniable. Being the 2nd-largest city in the US has its advantages, and Los Angeles could definitely support a football team. But could it?

In the greater LA area (including Anaheim), there are two professional basketball, baseball, and hockey teams. There are also two college football powerhouses (UCLA, USC) in the area. The two most popular teams, baseball’s Dodgers and basketball’s Lakers, are worth $1.4 billion and $1 billion, respectively. While a plethora of NFL teams generate at least $1 billion in revenue, it’s not guaranteed that a football team could replicate this success in Los Angeles. New York has multiple franchises worth $1+ billion, yet they are twice the size of Los Angeles.

Another problem is the stadium. The potential NFL team could move to the Coliseum, but the Coliseum has a history of losing teams. A stadium has been proposed, but its construction would cost $1.8 billion, and its proposed site is nearby the Staples Center, where two NBA teams and one NHL team play. There are concerns over congestion because of this.

It is possible that many people in Los Angeles want a professional football team, but for now they will have to be content with the multitude of sports teams in the area. The Raiders are also still popular there, so the NFL still has a reach in the city. Los Angeles should prepare for a few more years of no NFL team. The problem isn’t the fan base, but as always, it’s the cost.


Leave a Reply

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

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

Google+ photo

You are commenting using your Google+ 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 )


Connecting to %s

%d bloggers like this: