JACKSONVILLE, Fla. -- Jacksonville Jaguars fans are, not surprisingly, exceptionally happy about the news that owner Shad Khan has withdrawn his bid to purchase Wembley Stadium in London. That should end speculation the franchise might relocate overseas.
Though that might be the case, it potentially is a financial blow to the organization -- one that could have an impact on the long-term viability in Jacksonville.
That's not supposition. That's directly from the Jaguars.
The Jaguars have been transparent about how critical playing in London is for their long-term stability in Jacksonville. The team has played one home game in Wembley Stadium annually since 2013 and is under contract to do so through 2020. The deal Khan struck with the NFL for those annual games granted the team extended territorial rights in the United Kingdom as well as receiving the ticket revenue from the game at the 90,000-seat stadium. Team president Mark Lamping has said that accounts for 11 percent of the franchise's local revenue (down from 12 percent in 2016 and 15 percent in 2014).
Purchasing Wembley Stadium would have allowed the Jaguars to continue playing in London indefinitely and given Khan significant additional revenue -- including food and beverage sales and suite revenue -- from any of the 30 non-NFL games or events held at Wembley. Some of those funds would have funneled back to Jacksonville.
"The revenue potential at Wembley stadium compared to EverBank field is significant," Lamping said shortly after Khan's bid to purchase Wembley was revealed in April. "We've talked about the importance of London to the Jacksonville Jaguars. Those dollars that we generate in London make us stronger and more stable here in Jacksonville.
"It's a really critical part of our future."
But what if London goes away? There's no guarantee the Jaguars will be able to extend their deal with the NFL after 2020, which is the final season before the league's collective bargaining agreement expires. Even if the league is amenable to doing another contract, there's no guarantee it would be willing to continue to give the Jaguars those extended marketing territorial rights. Mark Waller, the NFL's executive vice president of international and events, has said 2022 remains a target date for a franchise in London that would get those rights.
Khan would have to make up for losing that revenue somewhere. Could he take an annual game to Germany or China? Or Canada? That might not be enough.
Maybe the solution is just outside TIAA Bank Field. Khan has partnered with The Cordish Companies on a proposed $2.5 billion revitalization/entertainment district on the St. Johns River, though that project also would require significant financial support from the city. In addition, the land they want to develop has petroleum-contaminated soil and would need to be cleaned before any construction would take place.
If that development were to take place, it would give Khan a significant source of revenue to go along with the revenue from the 5,500-season amphitheater that was constructed outside the south end zone. However, there was considerable criticism of the $90 million cost in recent club seat area renovations, the indoor practice facility and amphitheater even though Khan paid half of the bill (he also paid $20 million of the $63 million cost to add the world's largest scoreboards and two pools and paid $11 million to renovate the locker room and weight room).
There could be significant resistance to the revitalization/entertainment project, too. Even if it's green-lighted, it's certainly not something that will be completed anytime soon.
That's why the Wembley purchase could have been good for the Jaguars in the long term, especially if you believe Khan had no plans to move the franchise to London. Khan was visibly annoyed at speculation that would happen when his plan to purchase Wembley was revealed earlier this year, because he said it was purely a business move designed to provide additional revenue that will in fact help strengthen the team's future in Jacksonville.
"While this is a disappointing development, we will continue to emphasize London and the role the UK plays in ensuring a promising long-term future for the Jaguars in Downtown Jacksonville," Khan said in a statement Wednesday. "London as the Jaguars' home away from home remains a priority. Downtown Jacksonville with the Jaguars serving as a catalyst in its revitalization remains a priority. The relationship between London and the Jaguars is as important as ever and we will continue to develop it to the benefit of all."