NFL Team For Purchase: Could the LA Chargers be on the Market Soon?
In the 1920’s, the cost of buying an NFL franchise was only around $100. Nowadays, the average value of an NFL team is around $3.04 billion, and with the sport becoming ever-more popular, who could refuse a piece of one of these premier organizations? Recently, David Tepper’s purchase of the Carolina Panthers for $2.27 billion shattered a previous sale price of $1.4 billion for the Buffalo Bills. This record could potentially be broken next by the sale of the Chargers, a team that gained much traction during the 2020 season. Despite being such a prominent team, the Chargers have recently been facing huge financial issues that could bring about a change of ownership very soon.
The current ownership of the Chargers has roots all the way back in the 1950’s, when Alex Spanos, a wealthy business owner, purchased around 97% of the company for over $48.3 million. Spanos then spent the next seven years managing and slowly building up his team until the climactic 1992 season that saw the Chargers lose to the 49ers in the Super Bowl. In 1993, he transferred daily operations to his son Dean Spanos, who managed to secure five AFC West championships and win four playoff games, eventually becoming CEO. Dean, in 2015, passed day to day operations to his children and assumed part ownership of the relocated (2017) Los Angeles Chargers after his father passed away in 2018. Today, each of Alex Spanos’s kids own fifteen percent of the team, while the remaining forty percent is in a trust.
The Chargers’ current problems arise from debt. As of late 2020, the trust that was formed back in 2018 has amassed a $353 million debt, half of which stems from investment in the team’s own affairs. Dean’s solution is to hire an investment bank to address the problem, but his sister argues that it will do permanent damage to wait that long, saying that “every day that passes increases the risks that the charitable beneficiaries and the Spanos family legacy will suffer irreparable financial and reputational damage.” A proposed solution by Dean’s sister Beberian has the team selling itself to pay back the nearly $22 million it owes to numerous charities. On the other hand, Dean believes that “If Dea [Beberian] no longer wishes to be part of this family legacy, the three of us stand ready to purchase her share of the franchise, as our agreements give us the right to do."
The future of the organization seems to be the best indicator as to whether it would be wise to back out now. Although new network deals and a new stadium can be economically beneficial to the Chargers in the long term, the problem of financial burdens makes the decision to sell more and more enticing. The move to LA cost the team $650 million, a debt that will only get paid off after 30 years. In addition, the Chargers trust fund is hemorrhaging money quickly, proving that a sale would definitely be in the team’s best interest. The trust is already struggling to follow up on the “$22 million pledged to charities.” With such a tenuous financial situation in LA, the possibility of a new blockbuster change in leadership is definitely on the horizon.
