The Rams, who play in and host Sunday’s Super Bowl, owe a boatload of money for moving to Los Angeles.
The team privately financed SoFi Stadium, the most expensive stadium in history, for ~$5.5B. And in 2020 the Rams had an operating income of ~$37m, per Forbes. That’s 0.7% of the cost of the stadium.
How did this move ever make sense?
Owner Stan Kroenke pitched the Rams relocation and SoFi Stadium as part of a massive redevelopment of Hollywood Park, located in the Los Angeles suburb Inglewood.
Hollywood Park, 3x the size of Disneyland, features ~500k square feet of retail, 2.5k homes, and commercial office space.
Inglewood politicians wanted a revived Hollywood Park. And Kroenke wanted the land.
Stanford economics professor emeritus Roger Noll tells The Hustle to think of the whole thing as a deal on tomatoes at Safeway:
“The Rams facility is the tomatoes in the Safeway ad,” Noll says, “the loss leader that put (Kroenke) in control of developing the biggest swatch of undeveloped land inside a major metropolitan area in 50 years.”
The team makes good money, but his real bounty comes from the entire SoFi Stadium/Hollywood Park development. Kroenke cashes in off:
Meanwhile, economic benefits have not trickled down to Inglewood’s middle-class residents. Many have been displaced by skyrocketing rents.
Many cities no longer want to subsidize the cost of NFL stadiums.
So Noll expects more owners to go the Kroenke route: move to the exurbs, develop apartments and retail, and build a planned community around a stadium that pays for the stadium.
Game of Homes: Washington University in St. Louis sports business professor Patrick Rishe tells The Hustle “a lot of professional sports ownership these days has become partly about being a real estate mogul.”