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The Score - Anthony Schoettle

Welcome to The Score, your place for hard-hitting sports business news, fast-breaking updates and fuel-injected debate.  Buckle up.  I'm your host, Anthony Schoettle, IBJ sports reporter.

Sports Business

Colts could cash in big from NFL migration to L.A.

December 10, 2015
KEYWORDS Sports Business

The Indianapolis Colts aren't moving to California. City and state lawmakers put that issue to rest once and for all when they agreed to build the $750 million Lucas Oil Stadium, which opened in 2008.

That doesn't mean the Colts and the team's owner Jim Irsay still can't cash in from an NFL team moving to the massive market.

At last month's NFL owners meeting in New York, the 32 team owners decided they would charge the team or teams that move to the City of Angels $500 million to $600 million.

"It won't be a penny less than $500 million and could be a lot higher," a source close to the league and several of its teams told IBJ. "If the fee is tied to the L.A. teams' profitability, the payment could go much higher."

The St. Louis Rams, Oakland Raiders and San Diego Chargers are currently jockeying for position to move to L.A. Oakland and San Diego are floating proposals that would allow both teams to move to the nation's second largest media market.

While the $500 million to $600 million seems like a steep price to move to L.A., it could easily be recouped over time with lucrative local media deals, stadium naming rights and myriad sponsorship agreements, NFL sources said.

The money from the transfer fees would flow to the other team owners, explained Colts Chief Operating Officer Pete Ward.

It's not completely clear, but sources close to the league said it appears if two teams moved to L.A., they'd both be on the hook for the entire fee.

That means if two teams are allowed to move to L.A. and each are required to pay $600 million, that would score $1.2 billion for the other 30 teams to split.

The Colts could get $40 million if that's the case. It's possible that money would be paid over a number of years, but that's still a lot of loot.

At the very least, if one team moves to L.A. and is charged the minimum amount discussed at last month's owners' meeting, 31 teams would have $500 million to split. That would score $16.1 million for the Colts.

Either way, a hefty payday is in the team's future. The maximum amount the team could score is likely close to two year's worth of profits for the average NFL team, and maybe a bit more.

The NFL is asking any team that wants to move to apply between Jan. 1 and Feb. 15. Then owners must vote to approve the move.

A team or teams could be playing in L.A, as soon as 2017. So it shouldn't be long before the remaining team owners' wallets start getting a lot fatter.

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