Two ex-NFL players want to “invest” in Oakland Raiders stadium, here we go again

It’s hard to get all the details thanks to the San Francisco Chronicle’s new overly aggressive paywall, but former NFL players Ronnie Lott and Rodney Peete are trying to spearhead an attempt to get a group of African-American “investors” to help build a new Raiders stadium in Oakland, and NFL commissioner Roger Goodell thinks this is a great idea:

In recent weeks, ex-49er Lott and Peete, both of whom played briefly for the Raiders, have met with team executives and Oakland officials to brief them on their proposal to be master developers of the 120-acre Coliseum site.

(A bit more aggregated here, for those paywalled.)

The problem with the idea of bringing in private investors to bail out the $400-million-ish gap in Raiders stadium funding in Oakland is the same as when developer Floyd Kephart tried it: For it to be an “investment,” there has to be revenue to repay the money the private investors put up, and there wouldn’t be — at least, not any money that Raiders owner Mark Davis wouldn’t already be counting on for his own share. It’s not surprising that Goodell is nodding approvingly toward this Lott/Peete proposal given that it checks off two of the league’s favorite lip-service boxes (racial integration at the executive level, and keeping teams in their current markets), but unless somebody here has figured out how to generate money out of thin air, I wouldn’t get too excited about it.

Davis, meanwhile, is keeping his eyes on the prize:

“The $750 million is the bottom line on that,” Davis said at the Silverton [in Las Vegas on Friday]. “Then whatever (extra) private money is needed we will come up with it. If they can come up with the public money of that nature, then we will make sure we get a stadium built here that everybody will be proud of; it’ll be world class.”

I’ve said it before, I’ll say it again: Unless you have some plan that involves moving to a huge market and reaping unprecedented new revenues from PSLs or development rights or something (see: Los Angeles Rams), you’d be crazy to try to make money off a new stadium while paying for it yourself. If even Mark Davis understands this, hopefully news reporters can wrap their brain around it as well.

UPDATE: I’ve finally found the non-paywalled version of the Matier & Ross story (thanks, commenter John Wyatt!), and here’s the key bit:

One source involved in the talks tells us the Raiders may be willing to work with the Lott group, assuming it can come up with the other $400 million needed to fill out the stadium financing.

“The Lott group’s first and foremost interest is owning a portion of the team and keeping it in Oakland,” said the source, who wasn’t authorized to speak on the record.

So Davis wants Lott’s group to come up with $400 million, and Lott’s group wants in exchange to get a share of a franchise that is currently worth $1.4 billion … I guess maybe it’s possible, but it doesn’t sound like Davis wants to sell part of the team to raise the $400 million, but rather wants someone to just give him $400 million. (Or better, $750 million.) Worth watching, but mostly in the same way that perpetual motion machines are.

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12 comments on “Two ex-NFL players want to “invest” in Oakland Raiders stadium, here we go again

  1. Let’s wait and see what happens.What you fail to understand and it seems to get lost in all of this Raiders in Vegas drama is that their is a relocation fee to consider.And please don’t think the NFL will just let the Raiders move to Vegas for free.Also we are talking about $750 million in tax money my friend which is the most for any project in regards to a football stadium and to have tax payers foot the bill more then what Davis is willing to put in is absurd.Mayor Goodman just last week stated that she is not to excited about the hotel tax hike cause the convention centers are their bread and butter.Before you start to criticize the SF Chronicle I strongly suggest you research the 7 Unions in LV who oppose this and Vegas locals who are not happy about the hotel tax hike.Also there is no guarantee that people from Oakland and LA will attend.I love the Oakland Raiders but if they move to Vegas I am done with them. Mark Davis stated:
    “The $750 million is the bottom line on that,” Davis said at the Silverton [in Las Vegas on Friday]. “Then whatever (extra) private money is needed we will come up with it”.
    WOW!! And you believe that?If that was the case then that so called $300 million funding gap here in Oakland would not be an issue.First off Mark Davis does not have $500 million to his name and from my understanding is that $100 million that he is pledging out of the $500 million is only going towards the stadium.So the rest is towards Practice facilities,Head Quarters,etc..There is a lot more to all this that people are not reporting so please do some research.Thanks for your time.

    1. If Oakland were offering Mark Davis $750m, I’m sure he would be building there already. Oakland is not considering offering Mark Davis $750m, because elected officials there are not completely insane, as some (though not all) in Nevada appear to be.

      Matier and Ross do some fine work, but taking Lott and Peete seriously just because they throw around the word “investors” is a bit premature. Though maybe there’s some deeper analysis buried at the bottom of that paywalled article, who knows?

      1. Egbert Perry who is a developer from Atlanta and chairman of the board of Fannie Mae is also involved.
        This plan also hinges on developing the Coliseum land (much like the Kephart deal) and that is where it gets even more complicated!
        Both The Raiders and The A’s want surface parking and would the A’s even be on board?
        Even if they decide to move the A’s off of the site, their lease requires a 2 year notice, so they could delay the project even starting for 2 years.

    2. Facts about Davis’ so-called $500 million contribution is being exposed: He would contribute only $100 million, depend on another $100 million for PSL sales, with the NFL providing $200 million via G-4, which isn’t guaranteed because that fund has been exhausted and needs player approval to refund it via a reduction in the percentage of revenues (good luck with that). Apparently Adelson and Roski would contribute $240 million. People here locally are up-in-arms over this farce. The NFL and their presstitutes would like you to believe we are gun-ho about the Raiders. That couldn’t be further from the truth, especially when you have the NHL poised to expand here, with the franchise playing in a private-financed venue. Not to mention, people here know Adelson’s main motivation of requesting public funding isn’t because he needs it, but because he doesn’t want the LVCVA to have it.

      Good luck to any politician willing to fork over $1.6 billion in tax revenue when crime is running rampant (record numbers of murders, robberies, and assaults), schools are falling apart (overcrowded, shortage of teachers, AC units breaking down in 100+ degree temperature), infrastructure is crumbling, and real unemployment and underemployment are in the double digits.

  2. I am reminded of articles of how most NFL players end up broke only a few years after they retire, still unless they are just putting up a trivial percent with some tangible benefits like seats or being treated like a minority owner. It seems unlikely to be that good an investment, maybe a good PR move for the owner/team/ex-player, again only if putting up a trivial percent.

    1. They want in on the $$. They rarely have skin in the game. Usually, it’s about their endorsement. See Gary Sheffield.

  3. The link Matier and Ross tweeted appears to let you behind the paywall:
    https://twitter.com/sfchronicle/status/739698864265928705

  4. Puzzling article, both because it doesn’t really describe what Lott and team would be “investing” in, as you point out, and because it underplays the role of team equity in making the deal happen.

    I took the Mayor’s reversal to be something along the lines of “is there a bad side to having one’s photo taken with a local sports legend?”

    Pretty desperate stuff from the NFL and the Raiders, since it depends on insane behavior from politicians in a suboptimal market. Might happen!

  5. Looking good for a stadium in Oakland. $400M for 25% or so is a win-win-win-win.

    NFL has the cudgel here. They can block the move to Las Vegas and force Davis to sell part of the team to fund the stadium.

    Owners don’t like Davis and having Lott & Co. buy a piece is a great first step towards eradicating Davis entirely.

    NFL has to recognize what a great lo action they have at the Coliseum. Can’t see them giving it up unless something nutty happens.

    1. I don’t really see what leverage the NFL has, unless Davis starts using racist terms in a press conference or runs out of money. They really can’t make him sell a part of the team–and it isn’t really clear why he would give up part of the team to build what he already has.

      In theory, so long as Oakland doesn’t decide to demolish the Coliseum for a baseball stadium, the Raiders can keep pretending to move and can keep signing short term leases. Its a better market, he’s still selling (some) tickets, and maybe he’ll draft the right quarterback one of these years.

      Selling equity for an Oakland stadium when he doesn’t have to makes little sense. If Vegas would actually be so dumb as to build the whole stadium for his “$100 million” that would be a different story.

  6. http://www.csnbayarea.com/raiders/report-goodell-pushes-oakland-mayor-meet-lott-led-group

    Better check the update because Matier & Ross completely screwed up their ‘reporting’. They’re not sportswriters, they do basically a “what’s up” column.

    Not so much “Hey, talk to these guys” as much as “Oh, what, you’ve already chatted with these guys? Sure, okay, but don’t make any promises unless the Raiders are *fully* onboard with it.”

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