The $2 billion gap in Los Angeles is widening.
The National Football League’s Los Angeles Rams rank second on CNBC’s official 2024 NFL team valuation rankings, worth $8 billion, while the Los Angeles Chargers rank 26th with a value of $5.83 billion.
While the Rams recently won a Super Bowl and the Chargers did not, the value gap goes beyond team performance. It comes down to stadium economics.
Both teams play at SoFi Stadium, which Rams owner Stanley Kroenke has funded with more than $5 billion. Kroenke owns and operates the stadium. The Chargers, owned by the Spanos family, are just tenants.
About 85 percent of the Rams’ stadium revenue comes from luxury suites and sponsorships, along with all revenue from non-NFL events, according to a person familiar with the matter. That leaves the Chargers with about 15 percent of suite and sponsorship revenue and no revenue from non-NFL events.
That means, for example, when pop star Taylor Swift plays a sold-out Eras tour at SoFi Stadium in August 2023, the Chargers won’t get a piece of the action.
Los Angeles Rams owner Stanley Kroenke speaks during the “Football Meets Football” youth clinic at the Rams NFL training camp on the campus of Loyola Marymount University in Los Angeles on July 26, 2024.
Patrick T. Fallon AFP | Getty Images
Last year’s big tour was a boon to several NFL teams. A source familiar with the matter told CNBC that one stop on the Eras tour brought in $4 million per show to the host stadium.
Stadium economics figure heavily in NFL valuations, as $13.68 billion, or 67%, of the league’s $20.47 billion in 2023 revenue is divided equally among the 32 teams. Copyright plus sponsorship and licensing deals. But teams don’t share in revenue from stadium suites, hospitality and sponsorships — and that’s where some franchises can get value.
In addition to six Swift concerts, SoFi Arena hosted performances by Beyoncé, Ed Sheeran, Metallica and Pink last year. The Rams will retain 100% of that revenue.
The franchise also gets to keep all $625 million Sophie’s The stadium naming rights are valid for 20 years until the 2039 season.
This is a unique revenue sharing structure in the NFL. The New York Giants and New York Jets are the only other teams sharing a stadium, splitting stadium revenue equally, according to CNBC sources, with a difference of about $500 million in total team value, according to CNBC’s 2024 list. That’s a much smaller margin than Los Angeles’ margin.
Last year, the Rams ranked second in the NFL in sponsorship revenue behind only the Dallas Cowboys, who ranked No. 1 in total value on CNBC’s 2024 list and are quickly closing in on sponsorship revenue, according to a person familiar with the matter. $250 million.
The Rams made less than $200 million in sponsorship revenue last year, according to a person familiar with the team.
Of course, building your own stadium isn’t without risks. SoFi Stadium cost more than $5 billion — the most expensive of any stadium in the world — and the Rams are $3.5 billion in debt, by far the most in the NFL.
But the risk appears to have paid off.
When Kroenke purchased the Rams for $750 million in 2010, the team was based in St. Louis. He spent a fortune to move the team to Los Angeles for the 2016 season: Kroenke must pay the league $550 million in relocation costs and an additional $571 million in a settlement with the city of St. Louis over the decision Litigation related.
Still, with fees totaling $1.12 billion, Kroenke’s investment in the Rams has more than quadrupled since he took control of the team. Since moving to Los Angeles, the Rams have made the playoffs five times, the Super Bowl twice and won the Lombardi Trophy in 2021.
The Chargers moved to Los Angeles in 2017 and have made the playoffs just twice since and never advanced beyond the divisional round.
The Spanos family is doing pretty well, though. The late Alex Spanos purchased what was then the San Diego Chargers in 1984 for $72 million. Similar to the Rams, the Chargers will also need to pay $550 million in relocation fees. Including fees, the team’s value has increased 81-fold since August 1984.
In stock market terms, think of the Rams as a growth stock and the Chargers as a dividend stock.
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