GOALS

1. Eliminate ticket guaranty
2. End litigation
3. Pay a set and increased rent
4. Make the Chargers, instead of taxpayers, responsible for a substantial portion of the outstanding Qualcomm bonds
5. Have time to work together towards a positive solution for San Diego absent the contention that surrounds this issue.

Q&A

What happened to "they have a contract until 2020 and we are going to hold them to it"?

• It is unfortunate that some elected officials have made this claim over and over. The contract term is until 2020, however, there are five renegotiation clauses in the contract, one has been currently triggered. They have the contractual right to do what they are doing.

But the city says they can't trigger?

• The city makes this assertion but has not done the math to know if it is true or not.
• The Chargers have done the math, and, believe they can trigger which gives them the right to work out something new with the city, or, leave San Diego.
• The Chargers have had 34 negotiating sessions with the city and cannot agree on anything, including their right to trigger, so the Chargers did the only thing they could, filed a Declaratory Relief Action to ask a court to render a decision one way or another on the trigger.
• Even if the city is right about the team's inability to trigger this time around (and we have no reason to believe the city is right about this) the team can simply trigger again next year, and three other times after that before 2020.

So they sued the City?

• Technically, but not before trying to reach a consensus on how to resolve their differences. In fact, both the team and the Coalition offered to resolve this issue with the city in binding arbitration, but the city declined that offer.
• A Declaratory Relief Action simply asks the court to make a determination on an issue when two disputing parties cannot agree - there are no damages awarded to either side, only a decision as to who is right and who is wrong.
• The city loses either way in court. If the court rules that the Chargers have triggered, the team can leave town now by paying just $10 million to the city (and that number goes down to zero in 2007). And if the court finds some reason why the Chargers can't trigger, the team is free to simply trigger again next year - perfecting its trigger by learning from the court what it did wrong last time. So either way the city loses.

But they might leave in 2008 under this new proposal?

• But they could leave right now by paying a $10 million termination fee (that goes down to zero in 2007).
• This proposal offers the only opportunity to minimize the enormous financial risk to the city, and, have a potential positive outcome for all.
• It provides all of us 5 years to figure out how to do this in a fiscally responsible manner, and, keep the cost to the taxpayers to a minimum. But, if it can't be worked out, the city does not pay out another $200M+ unnecessarily.

But if we win they stay until 2020

• And, it costs the city an estimated $283M, and, there are four more triggers, just like this one, to contend with.
• And, if we lose it costs the city $222M and they leave by 2007.

But they can't prove financial hardship

• Another unfortunate misrepresentation by our City Attorney - Financial Hardship" is nowhere in this contract. That is a term that was used in a letter to the season ticket holders after the original contract was signed. It makes for a good 10 second political sound bite, but, in a court of law will make no difference to the argument at hand.
• The trigger is based on a financial formula laid out in the contract that both parties have the ability to calculate any time they choose.

But we hear the Chargers wouldn't give them the numbers?

• The city has had access to the numbers since last year.
• The city has sent audit people to Charger headquarters to look at the numbers but has never shared what they learned with the public.
• The NFL has had an offer for the City to look at the relevant TV contract numbers at their offices in New York since last May, but the city has never visited the NFL offices to look at the contracts.
• The Business/Labor Coalition has offered to help the City Attorney get any numbers he feels he cannot get if he will provide a list of what is missing, and, the City Attorney claimed he would do so - he has never produced that list.
• The city does not want to know what the answer to the trigger is, because, then they would have to stop claiming that "they do not believe the Chargers can trigger". A very dangerous game to play with taxpayer money.

But the revenue is going to be higher in the later years of the contract?

• True, but the expenses outpace the revenues and make it even more expensive to the city.
• It makes another great 10 second political sound bite to make this claim, however, you can't assess what that means if you do not consider what the expense side is.
• Yes, revenues are higher, but, expenses are astronomical.
• Finally, this argument assumes that there ARE later years of the contract - something that is extremely unlikely with four more triggers to be pulled.

The bond repayment schedule does not favor the city after 2011

• The bond repayment does not favor the city right now.
• The Chargers believe they owe $10M between now and 2007 if they exit early and nothing thereafter.
• To get the Spanos family to agree to pay $56M in bond debt for the city in 2009/2010 is an enormous leap of faith on their part that we can all together accomplish a deal that will keep them here long term.
• Yes, the schedule changes in 2011 and here is why;
  • The city has to have a motivation to get something done in 2009/2010 if we can not work out on a stadium deal and the Chargers are still here.
  • At the end of the original contract term, 2020, the city still owes $30M in bond debt.
  • We applied that $30M owed by the city as an incentive (starting in 2011) for the city to get something done, and, we got the Spanos family to agree to a sliding scale between 2011 and 2020 to pay off the difference - remember, to pay off money they do not owe.
  • It is also important to note that this is a contract entered into by two parties, not one, and both sides have to participate in the resolution.