Church group, economist, maybe NFL oppose Raiders stadium in Vegas

Man, take one morning off to go on the radio to talk about my new book (skip ahead to the 1:31 mark to hear my segment), and all hell breaks loose in the Oakland Raiders-to-Las Vegas situation. Admittedly, more hell breaking loose in terms of dramatic headlines than actual developments, but sometimes the war for headlines is the ones that counts in stadium deals, so let’s get to it:

How all this will affect the Nevada legislature when it meets in special session next week is anybody’s guess. Though there’s another wild card here, which is the NFL itself — there’s been speculation of late that not all the owners would be thrilled with approving a Raiders move to Vegas, even coming with that $750 million subsidy (which would help Davis and Adelson more than the NFL as a whole, except of course for upping the ante for cities to have to offer to attract or retain teams). Or that could just be what the NFL wants us to think, so that it can try to draw Oakland back into a bidding war for the Raiders’ services. There are too many people with their own interests who could be spreading rumors here, and since rumors is all we have, it’s tough to predict the outcome — except that if the collective 32 NFL owners have their way, somebody is going to get shaken down for nine figures worth of stadium, and ideally it’s not gonna be them.


32 comments on “Church group, economist, maybe NFL oppose Raiders stadium in Vegas

  1. What about the relocation fee? If the Raiders (Davis family) can only contribute $100M toward the new stadium (if I’ve been following this situation correctly), how does the Davis family come up the relocation fee?

  2. I believe the NFL bylaws define the dollar value of the relocation fee as “Well, how much you got?”

    • Pretty much, yeah. Raiders II set out the method for calculating a relocation fee (specific only to that one case, IIRC), namely the value of the new market less the value of the old.

      Basic stuff. But exactly how the NFL (or another league using the same metric) determines market value – real or perceived – is more than a little murky.
      With an NHL team just being notionally sold to an owner in Las Vegas for $500m (cough, cough), I think we can safely say it will be more than that amount.

      But is Las Vegas actually worth more as a market to the NFL than Oakland is? I’m sure owners looking to get paid for their vote in favour of a move will come up with excellent reasons why it is many times more valuable than Oakland. Davis’ people will try to claim that it is a great move for everyone and the league should approve it, but that Las Vegas will at best be worth about the same…

  3. Davis is an idiot. Of course Adelson would want an equity position in the Raiders, and he is right to want it. That’s the whole point. He’s contributing by far the greatest share in terms of private money, with you (the Raiders) only contributing at the most $100 million. Your contribution is based on lofty projections consisting of PSL sales (which there is no way on Earth they’re raising $100 million in this market). Like Dean said, how in the hell is Davis going to come up with the relocation fee? NFL is not waving it.

    Again I keep saying this over and over: The NFL’s G-4 Fund is depleted. They have to go to the NFLPA to replenish it. You think the union will do that without any concessions being made (i.e. Goodell giving up disciplinary power)?

    Another good point made by the group: the bonds being issued would be General Obligation bonds, tying the city/county/state to the actual debt and leaving the taxpayer solely responsible for any shortage (which I predicted). The bonds should be Revenue Bonds tied directly to the revenue source.

    Yet the Nevada politician is so crooked and dumb they will fall for it. Once they are voted out of office, the parachute would already be provided for them to use. Outside the State of Indiana, this is by far the worst deal in all of professional sport stadia:

    – No cap on public financial contribution
    – No share of the profits, since the private businessman believes his margins would be too small (yeah right, if that was the case, you wouldn’t build the damn thing now would you)
    – TIF on top of public subsidy
    – No property taxes collected
    – GO Bonds exposes the public to any financial pitfalls

    Oh and the city/county/state would be on the hook for operational expenses. They are already creating a fund strictly for that purpose.

    • “Oh and the city/county/state would be on the hook for operational expenses.”

      Solely responsible? Do you have a link? (I hadn’t seen this yet.)

      • I’ll find it. When SNTIC had their little press conference bloviating about how great a deal this was and how well they vet the albatross on local media, they mentioned the creation of a fund to cover operational expenses to ensure “all bases were covered” and mitigating risks. Yeah right.

    • @ Jay:

      Totally agree with you on Adelson wanting a stake in the Raiders. It was a matter of time until that size 19 shoe dropped. And he was probably waiting until Davis could practically taste the stadium in his mouth. Davis (desperately) needs Adelson more than Adelson needs Davis.

      But, can you point to evidence on the depleted G4 fund?

      –JC

      • And as Mark Davis is concerned, it is a massive deal breaker. The Raiders can get a better deal elsewhere. For example, maybe do a national radio contract with FOX Sports Radio or somebody else. I am surprised that Brad Sham isn’t calling Cowboys games on a national basis.

  4. Hallelujah! This sounds like a church coalition whose politics I could agree with, and that is probably not abusing the tax exempt non profit status of a church to influence politics.

  5. “And if it’s such a good deal, why does it have to be publicly financed?” This is one of the questions you’re not allowed to ask the NFL, along with “Why doesn’t anybody ever punt it out of bounds inside the 20 anymore?”

    • I believe discouraging the practice of punting out of bounds inside the 20 is the cornerstone of the NFL’s plan to deal with concussions and head related trauma.

      Along with increasing league executive bonus payments, obviously.

      • Given the concerns over a connection between returns and concussions, I’m a bit surprised they haven’t terminated the “Gentlemen’s Agreement” discouraging OB punts. But no sign of change yet.

  6. Neil, this is unrelated to this topic, but I haven’t seen any mention on this site of the Milwaukee Bucks D-league arena that is being bid on by three Wisconsin cities. Thoughts?
    http://arenadigest.com/2016/09/16/bucks-d-league-bid-down-to-three-cities/

    • Only that “getting into a bidding war over a D-League arena” is a sign that you need a better economic development plan.

  7. Adelson (and the LV stadium) might be Davis’ only way to stay long-term in the NFL. The other owners look at Davis as the “ugly stepchild” of the league. Their won’t be breaks from the league in a LV move, so Adelson’s wallet is Davis’ saving grace. The league would give millions in an Oakland scenario, but Davis still couldn’t cover the rest. And wouldn’t the Raiders relocation fee be the same as the Rams if they go with them to Inglewood?

    • Carson lost in their bid. The Rams’ new stadium will be built in Inglewood, on the old Hollywood Park Racetrack site, adjacent to the “Fabulous Forum”, former home of the LA Lakers and LA Kings.

    • More than one AFC and NFC team in Los Angeles causes issues with TV scheduling. Since TV is the golden goose you really don’t want to mess with that.

  8. I do not understand this “tourists will buy Raiders tickets” theory. At all.

    If I’m a football fan, and I have a favorite NFL team – let’s say it’s the Packers – and it’s an NFL Sunday, and I’m in Vegas, know what I’m doing? I’m in the sports book, watching the Packers game. And all the other games. For free.

    And possibly placing a bet or five. And eating and drinking for free/cheap, and whooping it up with all the other fans. Hell, even if I’m just a sports fan with no favorite NFL team, that’s what I’m doing.

    Know what I’m not doing? Missing all that, and spending hundreds of dollars to go to a Raiders-Chargers game.

    • I guess the theory is that Packers fans will schedule their trips to Vegas to coincide with Packers-Raiders games? Which I don’t think has ever worked anywhere in any sport, no.

      • And it is something that happens once every 8 years unless the league expands the schedule to 18 games. Then it would be once every 4 years with the new schedule having the Packers play the AFC West and South the same season. As it now stands, the Packers are scheduled to visit again in 2023.

      • As I noted in another post, you’d have to believe that there is someone who would travel to Las Vegas but instead decides to visit Pittsburgh (or Cleveland, or Nashville, or insert mid-small NFL City here) solely because the team has an NFL team and a stadium. And not only does this happen, but it happens about 100,000 times a year.

        • Even 100,000 times a year spread across 32 cities (well, 31 with two teams in New York) wouldn’t that much per city per year. Which probably explains why any economic boost from having an NFL team in your city is so small as to be immeasurable.

      • Except San Diego. You’d be amazed at how many fans take over the stadium at Charger and Padre games and it’s not a coincidence that San Diego has the best weather year round in the country as well as a stadium packed by opposing fans.

        But Vegas is a different story. Like Solvang pointed out, sports fans in Vegas have different options on enjoying the games that San Diego doesn’t offer.

    • Comps for sports bets are hard to come by. So, I wouldn’t count on dropping a few grand on the packers and getting the free brunch.

      The biggest problem with “tourists” going to the game is that “tourists” leave on Sunday. See the rates for rooms http://labs.orbitz.com/dayofweek/

      Therefore, random tourists wont stick around on Sunday to spend money to see a game and maybe another night or a late flight out. However, teams whose fan bases travels well (packers, stealers and etc (and yes different divisions) but those fans would make a long weekend of it.

      Vegas would be one of the smallest NFL cities.

  9. Carol Davis (Al’s wife) and Mark Davis- own 47% of the team but that results in control of the day to day operations.
    https://en.wikipedia.org/wiki/Oakland_Raiders#Current_ownership_structure

    Therefore, the Davis’s might be able to convince other owners to sell their shares.

  10. I feel that for all the billions Las Vegas tax payers would be footing should also earn a share in Monies earn !

  11. I’ve lived in Nevada almost forty years. I’ll be surprised if the state legislature, being called into special session by the governor, votes “no” on this cluster. This state has a real low self-esteem problem (much of it earned), and having an NFL team would make people think they’ve finally joined the big-time.