Jaguars essentially stuck in Jacksonville until ’27
Before you get too far down the road with the idea of the Los Angeles Jaguars, understand that moving the team from Jacksonville isn’t as simple as it might seem. Not today, not a year from now and probably not even four or five years down the line.
Never mind that outgoing owner Wayne Weaver, who saved new owner Shahid Khan the trouble by firing coach Jack Del Rio on Tuesday before announcing the sale, promised that Khan has no plans to move the team. Never mind that Khan put out a public statement saying he was fully committed to bringing Jacksonville its first Super Bowl victory. Just remember that there’s a lease to get out from underneath and it runs through the 2027 season. The lease has one very difficult threshold the team must cross before it can get out, says former Jacksonville Mayor John Delaney, a lawyer who helped write the deal.
“The team would have to show that because of lack of attendance it’s losing money for three straight years and that’s probably a difficult thing for an NFL team to do,” Delaney said. “That’s there for if the city doesn’t support the team. If we don’t, we shouldn’t stick the team with a long-term lease. But if we support it, they can’t just pretend they’re losing and expect to get out.”
Marc Ganis, the president of SportsCorp, backed that sentiment. Ganis has reviewed the 100-page lease between the team and the city and said it’s “one of the more difficult leases you’ll see for a team to get out of.”
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That threshold, more than the actual money that’s owed to pay off the lease, stands in the way of a possible quick move of the team. In the mid-1990s, Delaney says the city took out approximately $115 million in bonds for improvements on what is now EverBank Field. Delaney guessed the rough amount of the payoff on the bonds would be “in the area of $60 million.” For a team planning to move, that’s not significant.
“The city you’re moving to would pay that off very quickly if that’s all you’re talking about,” Ganis said.
But fighting through the first threshold could be difficult, if not far more expensive. Under the growing television revenue the NFL receives, teams have never been more profitable. The average value of an NFL team has climbed to approximately $1 billion. In August, Jacksonville was ranked by Forbes as the NFL’s least valuable team at $725 million.
“Even if the team declared that it was losing money, the issue would be litigated and all the books from the team would be subpoenaed,” Delaney said. Litigation could take a year or two, making the quickest the team could leave more than four years away. In addition, the NFL is generally averse to having team financial records made public.
“Could you find a way out of the lease? Yes, but it’s going to take some very serious work and there’s going to be a lot of uncertainty along the way,” Delaney said. “People in that situation don’t like uncertainty.”
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That comes on top of Weaver’s effort to keep people in Los Angeles from buying the team. A source close to billionaire Los Angeles developer Ed Roski said Roski offered Weaver $800 million two years ago for the team, but was rebuffed.
“Weaver wasn’t interested at all in moving the team,” Roski said at the time. “That’s not the legacy he wants to leave.”
Weaver reiterated that point Tuesday. Although there is nothing in the sales contract barring Khan from moving the team (two sources said the NFL would not allow that language in the agreement), Weaver said he trusts Khan.
“It’s hard to write something to say you are going to force somebody to keep something here,” said Weaver, who added that he expects his grandson to grow up to be a Jaguars fan and attend games in Jacksonville. “You have to trust individuals’ integrity. I’ve no doubt Shahid will do what he says he’s going to do. … I had to be comfortable that his plans are to keep the team in Jacksonville. There’s not a doubt in my mind he will keep this team in Jacksonville.”
Weaver said Khan, who purchased the team for a reported $760 million, plans to purchase a home in Jacksonville. Khan, 61, built his fortune in the auto parts business after moving to the United States from Pakistan at age 16. He lives in Urbana, Ill., and earned a degree from the University of Illinois before eventually working his way up from employee to owner of Flex-N-Gate.
How does Khan handle this transaction when the Jaguars are dealing with minimal local revenue? Although Khan has been trying to get into the NFL for almost two years (he tried to purchase the St. Louis Rams in early 2010), he is also taking out approximately $350 million in loans to purchase the team, according to a report by Forbes.com.
Ganis has said numerous times that Jacksonville is one of the worst teams in the NFL in making local revenue from sponsorship deals and other avenues. At the same time, with a 10-year collective bargaining agreement in place between owners and players, Ganis said the value of NFL teams is about to spike again.
“You have cost certainty and you have a product that is going through the roof in terms of popularity,” Ganis said. “I think we’re about to see a massive increase in the value of teams.”
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