Government Officials Request Detailed Report Of Team’s Marketing Plan
With a $5 million budget for purchasing Chargers tickets to satisfy a controversial ticket guarantee nearly exhausted, Mayor Susan Golding and Chargers President Dean Spanos met last week to determine if there’s any possibility of renegotiating the contract.
The initial talks apparently went well, but not well enough to make any announcement, said Ric Grenell, Golding’s spokesman.
“We’re still in discussions,” Grenell said. “They had a productive meeting but at this point, there’s nothing to announce.”
Golding is attempting to persuade the Chargers to amend the part of the 30-year lease that guarantees the Chargers revenue equal to a minimum 60,000 general admission seats for all home games.
The 10-year guarantee has cost the city $5.3 million so far this season in ticket purchases. Because the city gets to keep 10 percent of each ticket it buys, the city has collected about $745,000.
That means a net payout to the Chargers for five games (two pre-season and three regular season) of $4.65 million, or just about the $5 million set aside this year for the purpose.
Once that figure is reached, the city plans to tap into the $19 million Qualcomm Stadium operating budget to pay for the tickets, said Deputy City Manager Bruce Herring.
Chargers Turnaround Unlikely
Given the Chargers’ 0-5 start and an unlikely turnaround on the field, the city is facing a second consecutive season of paying its football tenants for the rental of the stadium. Last season, the Chargers paid the city $5.7 million in rent, but that was offset by the city’s purchase of $6.1 million in tickets to satisfy the guarantee clause.
The latest overtures to amend the guarantee comes amid criticism that the Chargers have failed to comply with the contract provision requiring the team to make its best effort to market the sale of tickets.
City Manager Michael Uberuaga, in a letter dated Sept. 28, requested the Chargers to reveal a detailed, written report on what the franchise has done to market the team and sell tickets, not only for this season but for the past six seasons.
“The information will assist the city in verifying the team is in compliance with the contract requirement calling for the Chargers to use ‘its best effort to ensure the maximum occupancy of the stadium premises by the public,'” Uberuaga wrote in the letter to Spanos.
Alternatives Discussed
The request was sent in advance of a closed session meeting of the City Council held earlier this month concerning the ticket guarantee and possible alternatives to the contract provisions.
Among the alternatives discussed was delaying the purchase of tickets until after the deadline to lift the television blackout, which might improve general admission ticket sales. Another possible alternative was suing the Chargers for non-compliance of the contract.
The television blackout is lifted for the Chargers if at least 58,300 general admission tickets are sold by Thursday prior to the Sunday game. Qualcomm Stadium has a total of about 71,000 seats but about 10,000 of those located in the stadium’s club level and its sky boxes do not count toward the 60,000 general admission minimum.
Bill Johnston, the Chargers’ spokesman, said the team received Uberuaga’s letter but had yet to respond to it. “We’re reviewing it,” he said. “I don’t know what our response will be.”
The team’s official response is that it has continuously updated the city on its sales efforts, and “gone through detailed sales and marketing presentations for the 1997-2000 seasons with representatives from the city, San Diego International Sports Council, Downtown Partnership, Economic Development Corporation, Chamber of Commerce and others. We are in full compliance with the terms of our lease.”
