The San Diego mayoral candidate’s clumsy statements about the team owner are not helpful, or wise. Update: Watch KUSI Debate
I like Bob Filner. I think he’s been an outstanding representative of our region in Congress, and I think he’ll make a very good mayor. I’ve enjoyed the several interactions that I’ve had with him during his campaign for mayor. I think he’s the right candidate to look to in order to create a better economic environment for all of San Diego. This online publication recently endorsed Bob Filner, and I fully and completely support that endorsement. I wrote the damn thing, after all!
So yes, I will be voting for Bob Filner on Nov. 6. No question whatsoever about it.
There is one thing, though, that I do wish Filner would clean up his act about. During a debate last night on KUSI between Filner and his opponent, Carl DeMaio, the question was posed about the candidates’ support for a new stadium for the Chargers. Both opposed public subsidies, although DeMaio supports the idea of a sports entertainment complex that will include a new football stadium. “But it has to be privately funded,” he said.
Filner said that while he supports the Chargers “even when they lose,” he is against any public subsidies for a new stadium. He said that the Chargers have a billionaire owner that is trying to defraud the City of San Diego, accusing the Spanoses of essentially trying to hold the city hostage with the threat of moving the team in order to get a sweetheart deal. He said that these billionaire owners are “making hundreds of millions of dollars a year,” so if they want a new stadium, they should build it themselves.
So many things wrong with those statements I’m almost embarrassed for Mr. Filner.
Full disclosure: I worked for the Chargers for 11 years, eight of those years as a part of the Player Personnel office. I know Dean Spanos. I know or have at least met pretty much his entire family—brother, sisters, parents, wife Susie, and his sons A.G. and John. I am not a stranger to them.
Politically speaking, there is almost nothing about which I agree with the Spanoses, particularly Dean. This is a guy with pictures all over his office wall of his father aboard Air Force One with George H.W. Bush. By invitation, the entire family attended both George W. Bush inaugurations. These are hard core, right wing Republicans. I most certainly am not. As anyone who has read any of my writings would know, I am a liberal, and proudly so.
More full disclosure: I left the Chargers of my own volition in 2006. I was not fired. I did not “leave for better opportunities elsewhere.” The conditions of my continued employment became unpalatable to me, so I made the decision to leave. And it was my decision. Do I miss it? Sure I do. Is there perhaps some bitterness about the circumstances under which I left? Maybe, for reasons which I may or may not discuss in a future column. But I wouldn’t trade the experiences of those 11 years for anything.
Because of their wealth, the Spanoses might very well be considered out of touch with the common man, including many of those who work for them. They’ve lead rather sheltered lives that can be afforded by wealth and privilege. Good for them. That certainly does not make them bad people.
In fact, despite my difference in world view with them, I’ve always found Dean and his family to be more or less good people. And anyone who has met Dean’s brother Michael can’t help but like the guy. So Filner’s attacks on the Spanoses throughout the campaign have struck a particular nerve with me.
Some simple facts: Filner excoriates them for being “billionaire owners.” That’s true. Technically they are billionaires, at least by the assets they own. According to Forbes, the Spanos family is worth $1.1 billion as of March, 2012. But here’s the interesting part, and it’s something that Filner needs to keep in mind when he launches his attacks: The San Diego Chargers football team accounts for $936 million of that $1.1 billion, making them the 24th most valuable of the 32 NFL teams. Without the Chargers, the Spanos family, according to Forbes, is worth $164 million. That’s a lot of money, but it won’t exactly qualify one as a billionaire Master of the Universe. Context, as always, is key.
Next, Filner has repeatedly insisted that the Chargers are making “hundreds of millions of dollars” every year, meaning they clearly have the resources to build their own stadium if they really wanted to. Again, context is key. The Chargers do not make hundreds of millions of dollars per year. The NFL collectively might, but not the Chargers by themselves.
The NFL as a whole makes around $4 billion per year on TV alone, according to a report by Bloomberg News. That $4 billion gets split up evenly into 32 parts, equaling roughly $125 million in revenue per team. That’s before expenses. The teams then have to pony up for the NFL operations in New York and the NFL Films operations in New Jersey. Then there’s the NFL Network, which gets paid for by the team owners.
And that’s before we even get to the team’s individual expenses, which includes player salaries and benefits; coaches salaries and benefits; team staff; operating expenses of the teams’ headquarters; the expense of sending the teams’ scouting staffs all over the country to evaluate players for the upcoming draft, including airfare, hotel, rental car, per diem, etc. And do you have any idea how much it costs to charter a flight for an entire NFL team and everyone that travels with them to away games and back, paying for lodging and selected meals in between? Tens of millions per year in travel expenses for the team alone.
I may not have seen the Chargers’ accounting books myself, but being there every day can give you a pretty good idea of how much it really costs to run an NFL franchise. By the time the team has covered most of its expenses, that $125 million is pretty much gone. In fact, the NFL salary cap–the amount teams are allowed to spend each year on player salaries–stands somewhere in the neighborhood of $123 million, adjusting each year for the amount of TV revenue the league expects. And since most teams, including the Chargers, will spend right up to that salary cap, that means that the TV money gets spent almost exclusively on player salaries.
No one is saying that NFL teams are not profitable. They are—some much more so than others. But they are not nearly as lucrative as people like Bob Filner would have us believe. When all is said and done, NFL teams are lucky to turn a modest profit. My educated guess is that a profit—pure profit—of about $10 million is a pretty good year for most NFL teams. As the saying goes, an owner does not get rich by owning an NFL team, they get rich by selling an NFL team.
One other point: Spanos, team spokesman on stadium matters Mark Fabiani, and the Chargers have been very careful to not issue threats, veiled or otherwise, during this decade long quest for a new facility. They have never once issued any sort of ultimatum—“build a stadium or we’re leaving” sort of challenge. Rather, they have quietly and meticulously gone about making their case. Never once have they used the rumblings of one of two possible new stadiums in Los Angeles to club San Diegans over the head. Other sources may have, but it never came from Murphy Canyon. Their approach has actually been quite responsible.
Bob Filner has seriously distorted the facts when it comes to the Chargers, and that won’t help his cause or San Diego’s when it comes time to hunker down and find a way to keep the team here in San Diego, if that is still a priority.
Much as it may personally pain me to say it, Carl DeMaio had a point last night during the debate on KUSI. He said that painting Dean Spanos as an evil billionaire owner (paraphrase) is not a good starting point for negotiation with the team. In fact, it could act as a deterrent for negotiations, similar to what we saw when Mike Aguirre was the San Diego City Attorney; Aguirre was the reason no talks between the team and the city could occur at all during his tenure.
Mr. Filner has a bad habit of repelling people who could potentially be valuable assets to his campaign. He did it with Irwin Jacobs, the billionaire founder of Qualcomm, a Democrat who supports Democratic causes, but who has endorsed DeMaio in this race. I understand why Jacobs would be reticent to support Filner after Filner’s clumsy comments about him in front of the City Council on the Balboa Park renovation. And directly insulting someone with whom you would be in direct negotiations should you become the next Mayor of San Diego, as he has Dean Spanos, is not typically a wise thing to do.
I still fully support Bob Filner as San Diego’s next mayor. But I would offer him two pieces of advice in the closing days of the campaign: First, get your facts straight on the Chargers and their finances. Don’t try to mislead the public about what resources they may or may not have. It’s not helpful. Second, don’t vilify Dean Spanos or the team he and his family owns. They’ve done nothing to deserve it. The family may not support your candidacy (as Republicans they surely don’t), but that doesn’t mean they can’t or won’t be valuable assets to you in the future should you win on Nov. 6. In fact, I’m pretty sure they will.
Follow Andy on Twitter at @AndyCohenSD
Update: Watch the debate on KUSI in its entirety below:
Filner’s problem is he remembers Gene Klein – San Diego traded affable, approachable Gene for a Stockton contractor with a reputation as a leg breaker (needs to be said). Dean, well remember the Pro-Am Golf Tourney’s? The one Dean was banned from for sand-bagging? As owners, the Spanos family has not had the best relationship with San Diego. They have made well, threats if you will, to leave. Some call it negotiations. But don’t you think it’s funny – I mean, the Chargers are just entertainment – and then again for only 10 games a year (counting the warm ups). And yet with all that plagues this city we place a for profit private football team at the center of the discussion – amazing. I too suffer Filner’s bias – of remembering. It’s a bitch.
Ernie McCray says
You sure laid it out nicely, my friend. As much as I don’t like the political leanings of the Spanos family I, too, have never felt like they’ve tried to bully the city into providing the Chargers a home for the future. I think they truly want to stay here and have tried hard to do so. That being said, I don’t get too emotional about such matters but it does something for a city to have something to root for and when that team is a winner it’s even more special. As an athlete I feel for the players. Losing sucks. A team can only be as good as they’re groomed to be as a unit and these guys just don’t know how to win with any kind of consistency. They play way too safe for me. Fumbling aside I’d give the ball to Ryan every chance I could and yell: “Go, go, go and hold on to the ball.” The dude can haul. Oh, well, maybe I am emotional about it (smile).
bob dorn says
Sorry, I don’t get this story. Stadium refinements at Qualcomm,
together with those odious ticket sales guarantees ended up
costing the city treasury a lot of money. And the Chargers
are valued at $936 million? Spanos could have floated private
loans to refurbish the stadium. He’s a developer and could
do a new Charger stadium on his own. We’re sitting in a place
where there’s great tax support for private owners of NFL
teams at the same time FEMA is going to be dismantled by
goliaths of Ayn Rand exceptionalism like the Spanos family.
Let’s help billionaires build Football Majals and who gives
a damn about the rest.
I can agree with one line in this analysis:
“No one is saying that NFL teams are not profitable. They are—some much more so than others. But they are not nearly as lucrative as people like Bob Filner would have us believe.”
I think Filner is more right than wrong on this subject.
Andy Cohen says
1) The City of San Diego owns Qualcomm Stadium and the surrounding property outright, not the Chargers (or the Spanoses). So no, they could not take out a loan to refurbish a property they don’t own. That’s kind of the way these things work.
2) Their original idea for redeveloping the Qualcomm site to include a new stadium was pretty much as you suggested, with the city donating the land and maintaining ownership of the new stadium (the team would be responsible for maintenance, however). To pay for it, they had a whole redevelopment plan put together. Then the economy tanked and the housing market with it. The plan no longer “penciled out,” as they say in the real estate biz.
3) Refurbishing/completely renovating Qualcomm was one of the first ideas they looked at, and determined that it made no sense. Would cost nearly as much as a whole new structure, so it wasn’t worth it, and it still wouldn’t bring the stadium completely up to modern specs.
4) Not sure what your FEMA/Ayn Rand rant has to do with the price of beer.
5) Remember that it was Susan Golding who first broached the idea of the 1997 stadium expansion (note my choice of words: It was an expansion, not a renovation), and who along with the then City Council also suggested the ticket guarantee. She wanted to attract Super Bowls, and she got two of them. But the deal was a bad one. However, you can’t blame the Chargers for that. Blame the former mayor and the City Council for negotiating a bad deal. The Chargers merely took what was offered.
As for your revenue assertions, Bob, I’ve given you some figures to chew on. Where are yours? Prove to me that the team is indeed raking in hundreds of millions of dollars by themselves, without accounting for the TV contract. You can’t, because they don’t. This market isn’t big enough for them to make that much money–San Diego weighs in as the 28th largest media market in the U.S. according to Nielsen. If it were, then why would the Padres still be considered a small market team?
I trust Andy to have some inside info. So why was the stadium built where it was built? The county owned about 25 acres at the site. The City and County formed a JPA (joint powers authority – not that type of joint), floated bonds under the JPA and built the thing. When I last looked (in the 90’s) the County still owned portions of the parking lot. The expansion deal did give the Chargers (Spanos) a very fine training facility in Murphy Canyon. I had the chance to accompany the appraiser from the County for the property’s first assessment. As to revenues, someone’s spliting hairs. Filner says revenue is hundreds of millions; Andy notes that shared TV revenues amount to about $125 million plus Charger tickets sold (ok, not many) and any direct advertising could get close to Filner’s numbers. If you recall advertising at the stadium was an issue with the Padres and Chargers; but now the Chargers get it all. If the Chargers sell only 65,000 of the 72,000 seats and get only $75 on average compared to the $100 base cost – that’s about $40 million a year in ticket sales. With the $125 million this seems getting pretty close to Filner’s numbers. On the other hand, consider this; the Spanos family owns the Chargers; the Chargers are valued at about $950 million; if the Spanos family makes ONLY the shared TV revenues of $125 million – that’s a capitalization rate of over 13% – extremely good in today’s markets (see how much you earn on a 5 year CD). And you know they make more. And I do agree the expansion deal was a dumb politician trick.
Andy Cohen says
You’re still not considering the expenses. The $125 million from TV is gone on players salaries alone. That leaves whatever local revenues they make (stadium advertising/sponsorships, radio, ticket sales, etc) to cover all the rest of the team’s expenses–which as I said are quite considerable–and then whatever is left is profit. Also remember that 30% of ticket sales of non-premium seating goes to the visiting team. By the time it’s all said and done, if they’ve got $10 million left over, that’s a pretty good year.
Most owners don’t own teams to make money. They own teams simply for the prestige of owning an NFL franchise. They also use it to help promote (i.e. schmooze) their other businesses. In the Spanoses case, that would be their apartment construction business. These people don’t own a team to get rich, they own a team because they’re already rich.
Also consider this: When Alex Spanos bought the team in 1984(?), he paid $84 million. Because of the league’s business model, that value has skyrocketed to $936 million. But that’s still hardly a liquid asset. They would still have to sell all or some of the team in order to get any cash out of it.
Do I need to consider their expenses? We where talking Filner’s use of the expression “hundreds of millions” that you took exception to. I do think you agree hundreds of millions are involved. So, moving on, now let’s do their tax returns. Yes? First, I thought the salary cap was under $100 million? TV revenues alone seems to cover salaries with some left over. Moving on,it seems the owners (whoever) are getting a pre-tax earnings of somewhere around $40 million – a year. More than Mitt Romney. And given the 14% in taxes paid by Mitt Romney that leaves a paupers pay of about $34 million – net – a year. Still more than Mitt Romney. But NFL owners aren’t in it for the money – baseball I buy, but the NFL? Really Andy, I don’t think you can say that with a straight face. But if Dean needs money he can borrow against the valuation of the team, if he hasn’t already. And with a 11 fold increase in value, and that’s after our big fall off in property values, the Chargers are doing much better than the average property owner in San Diego. Thanks for the information, it’s help flush out the critique.
Andy Cohen says
Yeah, see, this is how business works (usually): You have revenues, which is the raw data of all the money the company has taken in during any given period of time. The company also has expenditures (or expenses) during that same time period. What you do is you subtract those expenses from the revenues, and that gives you the profit the company made–the amount of money they actually get to keep. Sometimes that profit number is a negative, which means the company lost money. Business 101.
Facts matter, and you don’t get to make up your own facts just so it conveniently fits a particular narrative. When Bob Filner tells a lie he should be called on it just the same as DeMaio should.
Now you’re talking down to us – me – the business 101 reference – but it’s left dangling and disconnected from your statement “When Bob Filner tells a lie…”. Let’s parse your original points; in the debate you attributed to Filner, 1) called Spanos a billionaire; 2) accusing the Spanoses of essentially trying to hold the city hostage with the threat of moving the team in order to get a sweetheart deal and 3) stating they are making hundreds of millions of dollars a year. To 1) you’ve established Filner was accurate, they are billionaires, if only by a small amount. To 2) some how you and Ernie have different impressions than I, my son, neighbors etc – we all perceived the reported goings on as threatening to move the team if they didn’t get what they wanted. Hence the popular phrase “Go Chargers and take the Padres with you.” So Filner was stating what the rest of us believe to be true. As to 3) I will concede he exaggerated a bit but in truth neither you nor I know the true facts nor will we ever. The revenues as we have discussed do amount of “hundreds of millions” the exaggeration is the notion that they net that much. In the end I believe you are trying to give Filner friendly advice because you (and Ernie and my son and many others) care very much about the sports teams in San Diego. To that end I can only agree – Filner need not pick battles where there’s nothing to gain. In this climate do you think a publicly financed stadium is likely?
I’m not sure the Spanos being billionaires has anything to do with the whole arguement. On paper I’m a millionaire, yet I’m concerned about being able to afford a used new car for my wife with the current cash flow. Sure I could sell something, which may be more or less valuable depending on the economy, that will carry me for a period, but in the long run it will diminish my cash flow and decrease my profit. (which is what the real arguement is, right?). IMHO, if the Spanos’ weren’t in the NFL because they’re addicted to professional football, they would sell right now, at the huge profit margin they’ve got and walk away from all the bs dealing with the wacked local government and monday morning quarterbacks basing their opinions on equally as wacked sports radio and sensationalists. Which is what Filner did this time as opposed to DeMayo’s regular soap box outbursts that are meant to basically accomplish the same thing. I’m still voting for Filner, mainly because I saw what Aguirre did to the City Attorney’s office while he was there (nothing) and DeMayo will do the same to the rest of the City (remember we’re in this wonderful strong Mayor form of governing). I vote for DeMayo is a vote for cutting off your nose in spite of your face and then being told that you look better and you’re more efficient because of it. And yes, I know I spelled DeMayo wrong.
Andy, you are leaving out a lot of other revenue sources.
We know the City of San Diego already gives the Chargers around $25 million a year in tax money.
The Chargers also get the parking income, don’t they?
What about marketing deals? All those team jerseys add up, you know.
I’m sure I could name five other sources of revenue the Chargers enjoy, easily making their revenues over $200 million annually.
The Spanos family, may love football, but they also love political power…as you have illustrated yourself Andy. Their power in San Diego is still strong, but nothing like in the days they destroyed Henderson for daring to tell the truth about the now notorious ticket guarantee…and then they used that power to shamelessly “negotiate” an even better deal from the city.
The Chargers, their organization, and their mobilized supporters were often a decisive force in San Diego politics.
Now Filner defied the Spanos family, because he understood that the power has shifted away and the relentless efforts of people like myself, telling the truth about the pro sports scam for well over a decade now, have paid off.
Voters now know that Filner is dead right. There’s no reason to give away tax money to Billionaires like the Spanos family, especially when they have such a sordid reputation for ripping off the city.
That’s politics 101, Andy.
Sorry, Andy, but Bob can attack your former employer’s all he wants. In today’s political climate and standing next to our little weasel, who’s not exactly a paragon of restraint, Bob needs to clearly define that public subsidies of any kind to private businesses, family owned at that, have no place in our city. As for his style in dealing with Dr. Jacobs, the good doctor doesn’t need your help.
The Spanos family doesn’t dissuade talk about alternatives to SD, and for the record, if they need help moving, I’m available anytime! And, their top line revenue number is not what’s important as the depreciation they take on everything from footballs and golf carts to players makes their net income tax negligible and possibly gets them a refund check from our US Treasury.
Playing apologist for a wealthy local sports franchise owner will likely not get your job back!
I’ve always wondered ….. if the IRS allowed one to take a particular deduction on their tax filing and they take it, does that make them a bad person? Are they “good” if they take the deduction and still pay but “bad” if they take it and get a refund? I don’t have any problem paying my fair share of taxes as the government defines them. Am I rich, no. Do I want to be, hell yeah.
KO, my reference to this difference between top line revenue and net of taxes revenue was simply to reply to Andy’s argument, not a personal comment on the goodness of the Spanos family.
Take any deduction available to you. It’s there, it’s legal, use it to build or conserve your wealth, just don’t apologize for wealthy monopolists whose feelings may be hurt because Bob Filner was making a point about not giving them public funds for private purposes!
BTW, good luck on getting rich, whatever that may be in your life!
Thanks, rich in life on life’s terms, working on the financial independance part of it ….
The key term here is “estimated worth of 1.1 billion” because the spanos family has NEVER opened their books to the public. There are other estimates (financial times) that the spanos family could be worth I’m the upwards of 6 billion. Here is my issue:
If you claim you have NO funds to build a stadium, and want the city to pay 80% while 20% will be “privately” invested, why don’t you open your books and show what you are worth? The spanos family won’t do that ever. To me it’s admitting guilt and it will stay that way until they will show what they have.
Annie Lane says
Wow, Andy. I don’t like football, have never watched a game in my life and don’t give a damn if we lose the team. Having said that, you made for an extremely interesting read.
It’s a little surprising to me that the Chargers can be ranked so high in terms of valuable teams without actually winning anything that could advance to the Super Bowl. Seems like they always get close and everyone gets their hopes up and then they predictably fail.
I’m generally of the opinion that the Spanoses or their rich friends should pay for their own new stadium. I want nothing to do with it. The cost of attending a game has become so expensive that the average family of four can no longer afford it. I don’t think anyone should be rewarded for that.
Patty Jones says
“Mr. Filner has a bad habit of repelling people who could potentially be valuable assets to his campaign. ”
I would edit this to:
“Mr. Filner has an admirable habit of telling the wealthy and powerful that they cannot buy his campaign.”
Jacobs plans for Balboa Park are an abomination…the vanity and hubris of an old many who made his fortune from government contacts, including from the City of San Diego.
Remember the stadium naming rights he got at a fire sale price, helping the politicians avoid a public vote on the notorious expansion and ticket guarantee. For helping them dodge the bullet, he got the best deal in the modern history of stadium naming.
Filner remembers this, even if you don’t Andy. He also remembers how the Spanos family bamboozled the city into the worst deal in the NFL, embarrassing San Diego. Within a few short years of promising not to ask for any more government handouts for 20 years, they were demanding a new stadium.
Despicable behavior from the Spanos is the norm, Andy. As a beneficiary of the fruits of dishonest deals you cannot expect to be regarded as unbiased in opining on this matter, as I cannot be expected to be unbiased as a member of the public who resents the ongoing public subsidies for professional sports team owners while simultaneously seeing the neglect of basic infrastructure and social services.
This isn’t about being Democrat or Republican, Liberal or Conservative…it’s about simple justice. The Spanos and Jacobs families don’t deserve any more public money…they’ve taken far more than they ever gave and their shameless meddling in San Diego politics needs to end.
That’s the real message of the election…San Diego is tired of arrogant insiders precisely of the ilk of Jacobs and Spanos.
That’s one reason why Filner won. Live with it. You shouldn’t be proud of having been associated with the Spanos Family, Andy…you may find yourself shunned for it in the near future as this movement continues and grows in power.