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The San Diego Union-Tribune

Chargers lose seats, but win big from city

September 12, 2007

The city of San Diego has to write a check to the Chargers soon, and it will be a whopper – $1.4 million.

But that's just a warm-up. The city then has to write a check to the Chargers for $1.9 million.

Additional seven-figure checks will be written to the Chargers next year, and each year thereafter, so long as the team continues to pack Qualcomm Stadium with fans.

Luckily, City Hall is flush with money. I understand the mayor found some loose change under the sofa cushions just yesterday.

You may wonder: Why is our city still writing checks to the Chargers? Didn't we get rid of the ticket guarantee years ago?

Yes, we did. But the guarantee, which required the city to compensate the team for every unsold ticket, was just one facet of San Diego's complicated relationship with the Chargers.

Now we are dealing with its Bizarro World counterpart, under which the city must compensate the Chargers for tickets that the team could not possibly sell.

It's sort of a missing-seat guarantee.

Despite their differences, both guarantees have resulted in cash flowing in the same direction, and that's not good news for the city. You might check the coin-return tray on the pay phone, Mr. Mayor.

Under the infamous ticket guarantee, you will recall, the more seats that went unsold at Qualcomm Stadium, the more money the city forked over. In seven years, during which the Chargers had a 35-77 record and not one winning season, those empty seats cost taxpayers more than $36 million.

Under the missing-seat guarantee, the dynamic is reversed: The more tickets that are sold, the more money the city forks over. And, of course, attendance is booming now that the Chargers are fielding a terrific young team that has gone 36-13 since the ticket guarantee was eliminated.

Fortune is smiling on the Chargers, perhaps.

“Or the converse of that,” suggests City Attorney Michael Aguirre, “is the city never seems to get it right. We bet on the Chargers to win, and they lose. We bet on them to lose, and they win.

“Somehow, I think they're a little smarter at what they do than we are.”

Agreed. Yet the question remains: How did San Diego get in this mess?

Brace yourself for a surprising answer: Our city was once run by lunkheads.

OK, maybe it's not that surprising.

This all dates back to 1996, when Susan Golding was mayor, Jack McGrory was city manager, Casey Gwinn was city attorney, and the stadium was being remodeled to meet the Chargers' desire for more seats and luxury boxes. As it remodeled, the city was required to bring the stadium into compliance with the Americans With Disabilities Act.

City leaders met this legal obligation in the same spirit they met their obligation to fund the city retirement system. I believe the term of art in public-administration circles is, “Let's not and say we did.”

Soon a lawsuit was filed, and the city, at great expense, had to rip out seats and install wheelchair ramps on the field and club levels.

The result was 1,486 fewer seats, and 3,507 seats that became harder to sell because they had newly obstructed views.

Of course, had this work been done as part of the remodel, as the law specified, the city would not now be on the hook to the Chargers for the resulting loss of income.

How much income was lost was a point of contention, and when negotiations between the city and Chargers weren't productive, a mediator devised a formula to determine the payout. Under that formula, the city pays on a sliding scale that kicks in when attendance tops 90 percent, which seems a likely prospect in the months, and possibly years, ahead.

So far, the city owes the Chargers $1.4 million for the years 2002 through 2005, when attendance wasn't stellar, and $1.9 million for last season, when the turnstiles were spinning. As long as the Chargers continue to win, the payments will remain high.

Mayor Jerry Sanders is eager to make the payments as they come due, rather than postponing the pain, his spokesman said.

Chargers executive Mark Fabiani has suggested that the annual payments could offset the termination fee the team must pay if it leaves town before 2020. But the debt accrues interest at 7 percent annually, and in any event, no one at City Hall seems eager to chance another negotiation.

The total payout is unlikely to exceed the $36 million cost of the ticket guarantee, but depending on how long the Chargers stick around, and how well they play, it could come close.

It's funny how many of our city's troubles took root around that moment in city history when the stadium was being expanded and all the rules were being thrown out the window.

The lawyer who's handling the missing-seat guarantee for the city, Executive Assistant City Attorney Don McGrath, has a term for it: “the gift that keeps on taking.”

Gerry Braun: (619) 542-4563;

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