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NFL takes a closer look at relocation fees

8h

SAN DIEGO – One of the side notes that resulted from our conversation with NFL executive Eric Grubman, the league’s point person on the relocation of teams to the Los Angeles market, was the fact that owners commissioned a study to examine relocation fees.

“We’ve engaged an outside firm to help us look at various ways to analyze it,” Grubman said at the NFL spring owners meeting in San Francisco this week. “That’ not to say that our finance staff is not capable of doing any of the analysis, but sometimes it’s good to have an independent mind take a look at it. And so we’ve engaged a firm to help us and the committee do that.

“But we are not very far along in that. They are just sort of designing the analysis, and we’re debating the different ways it can be looked at, and the different time frames it can be looked at. My best guess is that a relocation fee wouldn’t be defined until well toward the end of the process.”

The last time the NFL had a team go through the relocation process was in 1998, when the Houston Oilers moved to Nashville, Tennessee, where the franchise was renamed the Tennessee Titan.

According to a study performed by Vanderbilt University economics professor John Vrooman, the Titans paid $29 million to the league in relocation fees.

However, with the St. Louis Rams, San Diego Chargers and Oakland Raiders all contemplating moves to a much bigger market in Los Angeles, relocation fees likely will reflect the possibility of higher revenues generated within that market.

According to this report by the San Diego Union-Tribune, Vrooman estimates that the Chargers could pay $200 to $250 million in relocation fees to move to a proposed stadium with the Raiders in Carson, California.

But former Oakland Raiders CEO Amy Trask noted that relocation fees can be paid over time and should not hinder a franchise from generating revenue in the team’s new market.

“It can be done in any number of ways to help fill the Los Angeles market with a team,” Trask told The Mighty 1090 AM radio. “It doesn’t make sense for the league to impose upon a team, or teams, a relocation fee that will put that team in an economic back seat. Because otherwise, why do the move?”