Qualcomm Stadium: Is San Diego Supercharged or
Overcharged?
By Michael Strickland
Motions, University of San Diego School of
Law
October 2002
The Chargers want a new stadium.
Over the past decade, 17 new football stadiums
have sprouted up across the country. Five new
stadiums opened for business this season alone.
It's understandable why Chargers owner Alex Spanos
wants one for his organization; everyone else is
doing it.
Also understandable is the lack of public
support for the issue. Just five years ago,
Qualcomm Stadium underwent a $78 million
renovation, $60 million of which was publicly
funded. In addition, a controversial "ticket
guarantee" clause in the Chargers' current contract
has cost San Diego taxpayers over $28 million since
1995. Add the fact that the team hasn't had a
winning record since that same year, and it becomes
obvious why the organization is facing an uphill
battle.
For law students, the stadium issue has
something for just about everyone: contract law,
sports law, property law, land use planning and
more than a little local politics. At the heart of
the matter is the Chargers' 1995 contract with the
city, which contains a loophole that gives the
organization a certain degree of leverage over the
city.
In July, Mayor Dick Murphy formed the Citizens'
Task Force on Chargers Issues to investigate
"fiscally responsible" ways to keep the team in San
Diego. A number of local attorneys serve on the
task force, including Karen Heumann, a 1997 USD
graduate. Next February, the task force will submit
their final report to the city council.
Evaluating the Q
There is little consensus between the
various parties on the viability of Qualcomm
Stadium. The Chargers claim they can't compete
financially against teams with new stadiums. NFL
consultant Rick Horrow called the stadium
"economically, competitively and physically
obsolete" at a recent task force meeting. New
stadiums with more luxury boxes and club seats can
keep more local revenue, so the argument
goes—though Horrow presented no actual revenue
numbers, citing confidentiality reasons.
Task force members questioned the causal link
between new stadiums and higher revenues. In
particular, task force member Bill Largent
questioned how the Chargers would sell more tickets
in a new stadium if they can't sell out Qualcomm
Stadium now.
After a recent tour of the stadium, task force
chairman David Watson opined that the facility is
"in good shape." During the same tour, Assistant
Stadium Manager Steve Shushan reported that fans
have generally given the stadium good marks, and
that there was nothing structurally wrong with the
facility.
Though the stadium has minor problems one would
expect from a 35-year-old multi-use facility, some
task force members suggested they could be
corrected with renovations. As Watson commented,
"it seems like a design problem, not a 'new
stadium' problem."
The Super Bowl further complicates matters,
however. In 1999, an NFL official said "it may be
difficult for San Diego to get another Super Bowl
without a new stadium" after the big game is played
here next January. A 1998 study by
PricewaterhouseCoopers concluded that Super Bowl
XXXII infused $295 million into the local economy.
Such numbers add weight to the argument for keeping
the NFL happy.
If the task force does recommend a new stadium,
the issue will face voter approval—and almost
certain litigation, if the history of the downtown
ballpark project serves as any indication.
Reopening Old Wounds
When the Chargers renegotiated with the city
back in 1995, they extended their lease of Qualcomm
Stadium to the year 2020. Thus, when rumors started
flying last year, many San Diegans wondered how the
organization could talk about leaving so soon. The
answer is a "reopener" clause in the 1995 contract,
which gives the Chargers the right to reopen
negotiations with the city every four years if
certain economic prerequisites are met.
Essentially, if the Chargers and the city cannot
agree on an amendment to the contract which offsets
the economic factors causing the renegotiation in
the first place, the Chargers have the right to
terminate the contract. In plain terms, the
organization can say "pay up or we're outta
here."
It seems as if the Chargers are searching for a
way to say just that. In April, they brought
special counsel Mark Fabiani onboard to "explore
opportunities" for a new stadium. In a recent
speech to the task force, Fabiani affirmed the
organization's desire to play "championship caliber
football in San Diego," but repeated the assertion
that the Chargers cannot compete economically for
players and coaches against teams that have new
stadiums.
The team's performance so far this season seems
to contradict that claim, however. Highly regarded
head coach Marty Shottenheimer took the helm this
year, and new quarterback Drew Brees has led his
team to a 4-0 start. A stunning victory over the
Super Bowl-champion New England Patriots put the
team at the top of the league's standings, a place
it hasn't been for a very long time.
The "new stadium equals better team" logic seems
to be a chicken-or-the-egg question. Do the
Chargers need a new stadium to get a better team?
Or a better team to get a new stadium?
Ironically, a team that wins games could satisfy
all parties. With more wins, attendance at home
games would rise, thus increasing the Chargers'
revenue. With higher attendance, the city wouldn't
have to buy out games under the ticket guarantee.
With a championship-level team again, the
organization might eventually find the public
amenable to financing construction of a new
stadium.
After all, everyone loves a winning team.
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©2003 Michael
Strickland
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