Mrs. Straub
AP Econ
1/3/18
Charging into LA
Going into the 2016 season the Chargers future was an uncertain one. Qualcomm Stadium, the teams home at the time, was one of the oldest and most outdated stadiums in the league and its location 15 minutes outside the city of San Diego was less than ideal. For these reasons, the team was in a standoff with the local government to try and build a downtown stadium to host the team for the future. Though many proposals made it to a vote, they failed to convince the citizens of San Diego that it was worth. The largest factor leading to the failed vote was, of course, the tax increase that would have befallen local citizens. See, when new stadiums are being built the team will contribute large sums of money but a large portion of it falls to the consumers almost as if the stadium itself is a tax and through Tax Incidence, the supplier (the team) picks up a portion and the consumers (local citizens) do as well. These many failed attempts at trying to strike a deal with San Diego eventually began to cause the Chargers organization to feel as though the city did not value or appreciate their presence. The proposal that fell through in mid-2016 was the straw that broke the camel's back. In January 2017 team owner Dean Spanos announced that the team had exhausted their time in San Diego and were to move to Los Angeles the following season where they would piggyback on the Rams new stadium deal and share the Carson city stadium set to be completed in 2019. While LA is a huge market with tons of potential, the move has raised many questions as to if it was the right decision. The divorce with San Diego was a bitter one which turned off a large portion of the team's pre-move fan base. Further, while in San Diego, the team controlled a Natural Monopoly over professional football the team will have to split that market with the Los Angeles Rams for as long as the teams remain in the city resulting in an Oligopoly. This will lead to whatever team is superior at the time to gain a majority control over the LA football market. Throughout the 2017 season, this proved to be very true. The Rams, who had a breakout year and are one of the hottest teams in the NFL boasted a fairly run of the mill total attendance at home games of 507,136 total attendees. The Chargers, on the other hand, had an average season which caused attendance to be way down, the lowest in the league, in fact, coming in at a total home attendance of 202,687 total attendees, this number is over 220,000 less than the next lowest attended home team the Cincinnati Bengals. While of course, this being the teams first season in LA and they’re in a temporary stadium are strongly contributing to this extremely low number the concern simply cannot be ignored despite the massive potential of the LA market. Reasons stated in this post as well as many others lead all of us to question. Was the charge into LA really the right direction for the franchise?Works Cited
https://www.pro-football-reference.com/years/2017/attendance.htm
This was a great article. I though you made some really good points based about the move from San Diego. I was surprised how low the total attendance was for the chargers. But does that number lower because of the size of the playoffs. Overall this was great and really interesting.
ReplyDeleteThis blog post was very interesting and intriguing to read. It's very interesting to read about the process on stadiums and especially for "one of the oldest and most outdated stadiums in the league and its location 15 minutes outside the city of San Diego." I could see how the Chargers moving into LA could both be a positive and a negative for the team and the fans. As stated, it could cause the supply of fans to decrease and the demand to go to the games to decrease as it is not near others and near its primary location. The total attendance of the Chargers also shows the supply and demand decreasing and shows the opportunity cost for others realizing the things they could be doing besides supporting the Chargers. This article was very interesting to see what's going on in the sports world and how certain teams solve their issues.
ReplyDeleteAfter reading this post, I was shocked by how low the attendance to Chargers's games were. It's hard to convince people to move up state instead of moving to another state. Usually when professional teams try to relocate, they usually move into another state not a to a different city in the same state. Some people would consider this being inefficient because they are spending a lot of money for moving up state, but they will have an opportunity to receive a lot more revenue than they did in San Diego. It would increase their fan base and which would help them have a higher attendance because they are moving to a more populated city. It would also create a huge rivalry with the LA Rams just like Chicago White Soxs and Chicago Cubs. Overall, I thought this was a creative and intriguing post, however, I think it was unnecessary to move to Los Angeles in the short run, but I think it will have a positive impact in the long run.
ReplyDeleteI would agree that the move isn't very helpful for many fans living right near the stadium, as the LA is about 2 hours away from San Diego. The sales are most likely going to be increasing over time, in an area more well known, which will attract more tourists to watch the games.
DeleteI would agree because they just moved a few hours north. All of the fans in San Diego just have to drive farther now. The fan base in San Diego is loyal to an extent. Some fan won't want to drive the extra way and that hurt the ticket sales. Also the Chargers made some of their fans mad by moving because no they aren't in San Diego. The ticket sales will be bad for the Chargers for a couple years.
DeleteThis is an interesting topic since I don't know a ton about football, but I do know that NFL teams bring in a significant amount of money for the economy in many aspects of the game. When you brought up that the Chargers' move to Los Angeles was a bitter one for the citizens of San Diego, it made me wonder then why did they not agree to help fund the stadium? Even if it may have cost fans more initially, eventually in the long run it would have paid off when they could enjoy the new stadium and probably increased support for the team which has now as a result been forced to move to LA.
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I think that in the long run, it will be like a cubs/white sox situation, with the Rams/Chargers. The Rams are the stronger team right now, which will give them an edge in recruiting fans over the chargers. Also, since the Rams have been in LA before, I think they will return many older fans. The Rams have a richer history, are better currently, and have a fanbase already established, so in my opinion this wasn't a good decision from the chargers, because although LA is a huge market, so is Chicago, and the White Sox struggle with attendance every year due to being outdone by the Cubs. I think a move to Vegas or even taking the Rams place in Saint Louis would've benefited the Chargers more.
ReplyDeleteI agree with this completely and I think this move to LA is really good at the moment and the increase in recruiting that they will see from it will directly lead to an increase in ticket sales, and merchandise sales, which obviously will increase the total revenue. The people of Southern California have been dying to have a winning team in that area and the Chargers might finally be able to do that, but the key would be to do it before the Rams.
DeleteWhy wouldn't San Diego want to house the Chargers in their city? Football teams and their stadiums, bring great wealth to surrounding business including hotels and restaurants. Although they would have to find a viable option for the stadium's location, the addition would be a strong move for the economic benefit of the city. It doesn't make sense to me why the Chargers would move to LA when there is already a team there. It would seem they would conflict and the schedules would be messed up.
ReplyDeleteI find it surprising that the home game attendance rate dropped so significantly for the Chargers. I understand that they relocated to a new city so they are going to have a new fan base. They also have to compete with the Rams who also recently relocated to Los Angeles that have been red hot during this 2017 NFL season. It is quite obvious why the attendance rate has been so low. However, San Diego ins't that far away from L.A. so I don't see why the fans from San Diego wouldn't just make the drive to L.A. If they are truly a fan of the team, I feel that they would care enough to drive the 2 hours or so to L.A. to support the team even though they got relocated. Doing this would greatly boost the attendance rate for the Chargers games which would also help them play better by raising their confidence and contest with the Rams for the best team in L.A.
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ReplyDeleteThis topic is very interesting because it is an example of the point that if you move a team into a big market city like LA the team wont always find economic success right away. I don't think it was a great move for the chargers to go to LA because they really didn't have a fan-base their to begin with. It was different with the Rams because they had been in LA before and they are a better team than the chargers. Maybe as the chargers get better the attendance rate will go up but it was just the wrong decision at the wrong time.
ReplyDeleteI believe that the charge into LA was the right decision, even if it may not seem like it at the moment. Due to being neglected by their home city of San Diego, their outdated stadium and location overtime would have caused their attendance to drop as well. After Los Angeles Stadium at Hollywood Park is done being built in 2019, the new attraction itself will bring consumers in. This along with the city's adjustment to the new team overtime should bring their attendance back up and the chargers will be successful again.
ReplyDeleteYour blog post was very interesting, I was surprised at how low there attendance was. I wonder if its from moving locations or because the rams are much better this year. In the future I think they will be better financially as there are a lot of people in LA and once the rams start to fall in the rankings more and more chargers tickets will be bought especially if they increase in the NFL rankings.
ReplyDeleteThis was a very good piece of writing Michael. I also wondered when they first announced the move that would it be the right one. A team that I knew all my life as San Diego but now Los Angeles. I still forget that they are Los Angeles now. You have to wonder if they maybe could have used the stadium for a few more years and maybe saved up more money and tried to have a little less tax increase. Also that you stated the attendance is really low this year I wonder if they maybe had more or less attendance this year compared to last year.
ReplyDeleteIt surprises me that attendance rates dropped that significantly. In the addition the move to L.A. interests me because the Ram's have already established themselves in the city. Granted, LA has a massive population with plenty of potential fans but the move still intrigues me. Instead of having a monopoly in San Diego, they now have to share a market in L.A. But maybe, the move gave them an extra charge, (no pun intended) because they played very well in the 2017 season, but not as well as the Rams.
ReplyDeleteI would be interested to see how this compares to both of the New York teams. There will always be a more successful team, but having two teams in the same market has many advantages and disadvantages. While it is a bummer to see the team move, you have to raise the question if a little tax increase is better off than the potential economic loss of moving the team.
ReplyDeleteI think that while the move to LA will be difficult in the short run, the long term benefits will exceed the costs. The difficulty with this move is that while the high cost of moving cities and building a new stadium is very high, the longer the Chargers wait to make the move, the bigger financial hole they will dig for themselves. With their attendance already in decline, the Chargers are already losing revenue, so the longer they wait to move, the less and less revenue they'll have to make this move. While it may be a huge financial setback, it has to happen sooner rather than later.
ReplyDeleteI know that when the Rams first moved everyone was shocked by the decision especially due to the fact that although their team was mediocre they had a very strong fan base in St. Louis. I know some teams move into LA because they think that it is a super popular area and fans will automatically attend but seeing some of the Chargers numbers proved strongly against the theory. I think the decision to move was very risky and might not pay off in the long run.
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