January 12, 2017 / 9:31 PM / 7 months ago

Two teams sharing Los Angeles market cause for concern, experts say

4 Min Read

San Diego Chargers' President and Chief Executive Dean Spanos is pictured during a news conference at the NFL team's headquarters in San Diego, California January 9, 2013.Mike Blake

(Reuters) - Having two NFL teams in Los Angeles may prove too much for the city to handle and the timing could not be worse, according to sports industry analysts, with the struggling Rams and Chargers rebuilding.

The Chargers' decision on Thursday to leave San Diego for Los Angeles and join the Rams, who returned in 2016 after a 21-year stint in St. Louis, suddenly gives the city two options after decades of not having any team.

"The fan base there has developed into NFL agnostic. And that is a very hard thing to change," Marc Ganis, president of Chicago-based consulting firm Sports Corp, told Reuters.

"It takes time, it takes success on the field, it takes success with marketing and community outreach and that doesn't happen overnight."

Ganis, who helped move the Rams and Raiders out of Los Angeles, called the city a challenging market compared to places like Chicago or Green Bay given warm fall weather, alternative activities and a number of strong college sports programs.

The Chargers will offer a more intimate NFL fan experience by playing out of the 27,000-seat StubHub Center in the Los Angeles suburb of Carson for the next two seasons, the same venue where Major League Soccer's L.A. Galaxy play and former home of the now-defunct Chivas USA.

"Notice we are not talking about Chivas anymore. Because they could not find any foothold against a more popular and more successful L.A. Galaxy team and they folded completely," Victor Matheson, a specialist in sports economics who teaches at the College of the Holy Cross in Massachusetts, told Reuters.

"There certainly are concerns about that especially if one team for whatever reason ends up with a much better product on the field."

The Rams, who announced Sean McVay as their new head coach on Thursday, played their home games at the L.A. Coliseum in 2016 and had mediocre attendance as they struggled to a 4-12 record in their homecoming season.

But according to experts, the perception of whether two NFL teams can thrive in Los Angeles should be put on hold until they begin playing out of the futuristic $2.6 billion stadium in Inglewood they will share starting in 2019.

"I've always had doubts about L.A. as a two-team market but the new stadium is going to be a game-changer," said Ganis.

"I've seen the models and it's off the charts spectacular and when people see it coming out of the ground and what it actually is it's going to generate a tremendous amount of excitement."

Despite all the potential challenges that lie ahead, the NFL has a lucrative television contract that is divvied up among the league's 32 franchises, which according to Matheson takes plenty of pressure of both the Rams and Chargers.

"The biggest chunk of money that any NFL team earns is from the national TV contract that is fully shared among all members," said Matheson.

"So they don't need to generate a local media following in order to stay afloat ... the biggest piece of their revenue is already guaranteed by this national TV contract which of course makes a team anywhere in the NFL a pretty secure bet."

Reporting by Frank Pingue in Toronto. Editing by Steve Keating.

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