Dreaming about the San Diego Chargers

Could the Los Angeles Chargers end up back in San Diego with new owners? Maybe! It's at least worth talking about.

You may or may not know this, but I used to blog about the San Diego Chargers. From 2008 to mid-2016, I woke up every day thinking about different ways to turn my fandom into content and built up a hell of an audience while doing so.

I left when it was obvious that the team was moving to Los Angeles, but about six months before that news became official. I was angry and bitter and walked away from my fandom because it was easier than having the team walk away from me.

I haven’t written much about the team since then. Hell, I haven’t watched the team much since then, which is weird since I went almost a decade without missing a play. But today is a different kind of a day, a national holiday, and instead of not writing at all (which was my original plan) I wanted to do something a little different. So, join me as I pour out some thoughts (and hopes and dreams) about the San Diego Chargers.

Who owns the Chargers?

The first thing you need to know is that Dean Spanos doesn’t own the Los Angeles Chargers, despite what you might think. The ownership of the team breaks down like this:

15% Dean Spanos
15% Dea Spanos Berberian
15% Alexandra Spanos Ruhl
15% Michael Spanos
36% The Spanos Family Trust
4% various investors

Those are the four children of the late Alex Spanos, before you ask. Each of them also owns a quarter of the trust, meaning they each own 24% of the Chargers….kind of. See, they can’t really sell off their portion of the trust.

If the kids wanted to sell a controlling interest in the team, they would have to do so together. Alex made sure of that. Even if all the siblings but one wanted to sell, it would only equal 45% ownership.

The only other way it could work is if Dean and Dea, the co-trustees of The Spanos Family Trust, agreed to sell the trust’s ownership along with some (or all) of the ownership stakes owned by the Spanos family.

Would they sell the Chargers?

I remember sitting in a bar with someone close to the team back in 2015, and hearing that there was already tension amongst the siblings. Specifically, Dea was reportedly fed up with Dean’s insistence that she be in the owner’s box at every Chargers game, road or home. Not all of the Spanos family live in San Diego and, despite the private jet, they didn’t exactly want to spend their weekends flying away from their homes to attend NFL games.

But the dislike for the team actually goes deeper than that. The Los Angeles Chargers are on a path to financially ruin The Spanos Family Trust, according to Dea, who is attempting to force a sale of the team:

The petition by Dea Spanos Berberian, who serves as co-trustee of the family trust along with her brother, alleges the trust’s debts and expenses exceed $353 million. In addition, according to the filing, the trust doesn’t have a plan to pay more than $22 million it has pledged to charities.

…

The stake in the Chargers makes up 83% of the trust’s holdings. The petition paints a bleak picture of its finances, estimating an annual shortfall of $11 million with little cash flow or reason to believe the numbers will improve. The debt includes $164 million “associated with the Trust’s Interest in the Chargers” and at least $75 million in estate tax.

L.A. Times

As co-trustee (with Dean), it is Dea’s job to ensure the financial stability of the trust. This lawsuit is well within her rights and it’s a hell of a case to put in front of a judge.

This lawsuit isn’t about Dea wanting to sell her own 15% share, although we’ll get to that in a second. It’s about the trust selling its 36% ownership stake for the sake of the long-term sustainability of the trust itself.

Dean has agreed to hire an investment banker following the 2024 NFL season to look into selling the trust’s interest in the team, but hasn’t really agreed to much beyond that. It appears that he is attempting to buy as much time as possible to make money so that he can argue that the trust’s financials will be corrected without a sale.

Dea, for her part, doesn’t buy it and is tired of waiting. She’s tired of Dean playing the “hope” card and wants to get out now when it would, without a doubt, leave the trust in a better financial situation. The lawsuit is about exactly this. No more waiting, sell the trust’s stake in the team now and get rid of the debt.

It will eventually be up to a judge (and not Dean!) to decide if Dean’s hope is a worthwhile cause for the trust, something that can be relied upon to fix itself financially in the next few years (now that the team plays in a $5 billion stadium in Los Angeles), or if a sale of the 36% ownership of the Chargers is necessary to do so.

Some very quick math

If the judge rules in favor of Dea, then this becomes more important:

15% Dea Spanos Berberian + 36% The Spanos Family Trust = 51% controlling interest in the Chargers

In theory, Dea could help facilitate a sale of controlling interest in the Los Angeles Chargers by herself (with some help from the judge). While her three siblings would still own 45% of the team, they would no longer be calling the shots.

A quick word on generational wealth

The Spanos family is one of the poorest amongst NFL owners. According to Dea’s lawsuit, there have been multiple loans taken out to pay for things related to the team and relocation (including the $645 million relocation fee to the NFL).

While they own most of an NFL franchise worth billions, and are therefore considered billionaires, they are not exactly cash rich. It’s important to remember that Alex Spanos purchased the team for about $48 million, which wouldn’t get you a sliver of NFL ownership these days.

I’m not just trying to make them look bad, this is important! If Dea Spanos Berberian wanted to sell her 15% stake in the team, her siblings have right of first refusal, meaning they can match the offer she gets and keep that stake of ownership in the Spanos family.

Sticking with round numbers and estimations here, Dea’s 15% stake is worth about $400 million. If the rest of the family is already taking out loans to pay for the relocation fee, how could they possible afford to take on (at least) another $400 million?

The opportunity for San Diego (?)

If Dea wins her lawsuit, she’ll likely find many buyers lining up to pay $1.5 billion or more for 51% ownership of the Chargers.

But this purchase would be different than most NFL teams being sold, because the Chargers don’t own land or a stadium. Whoever is looking to buy this team could also be looking to get their own stadium where they can make money off of naming rights and events in the 350ish days when football isn’t being played.

San Diego offers quite a lot for a potential buyer of the team. There’s a built-in fanbase that would certainly flock back to the team if it returned to the city with new ownership. There’s also a lack of a massive outdoor stadium (Petco Park maxes out at 42.5k people) in the county, meaning a new NFL-sized stadium built here would be the first target for massive events (Super Bowl, NCAA Final Four, World Cup, etc.) in San Diego.

The Chargers left San Diego because their wealthy-but-not-uber-wealthy owners needed public funding for a stadium at a time when public funding for stadiums was falling out of favor. What sports is seeing more of now is uber-wealthy owners simply building stadiums out of their own pocket (like the current Chargers home, built on Stan Kroenke’s dime). If one of those uber-wealthy owners wanted to build a massive outdoor stadium in San Diego, I don’t know of anyone that would stand in their way.

If a judge rules the right way, and the right buyer comes along (paging Jeff Bezos and Joseph Tsai), someone could swoop in and become both the owner of the Chargers and de facto King of San Diego.