Nevada senate passes $750m (or more) Raiders stadium subsidy, ball could move to NFL’s court

That didn’t take long: After a whole one day of testimony, the Nevada state senate voted 16-5 to approve raising hotel taxes to give Sands casino magnate Sheldon Adelson and Oakland Raiders owner Mark Davis $750 million (at least) for building a new stadium in Las Vegas and moving the Raiders there. The measure now goes to the state assembly, which could vote as soon as tomorrow.

The debate, such as it was, went along predictable lines: Major local power brokers, including other casino owners, lined up in favor of the subsidy deal on the grounds that it would be an economic boon; opponents said, wait, are you serious — Stanford economist Roger Noll testifying that the proposed deal was the “worst I’ve ever seen” and called the Raiders’ economic study “deeply flawed” for assuming that one-third of ticket buyers would be tourists who’d spend more than three nights in Las Vegas just to see football, which has never happened anywhere ever; and then the senate went ahead and voted for the bill, because JOBS!!!!1!!.

Sen. Aaron Ford, D-Las Vegas, said he could not face a laborer in need of work knowing “I had a chance to give you a job and I voted no.”

If that’s the bar, then no government expense for anything ever would be rejected, since it’s hard to spend money on anything without creating at least some jobs. Apparently Ford can sleep perfectly well when he considers facing laborers who could be employed by doing something else with that $750 million that might have a better bang for its buck than a football stadium — as the Reno Gazette-Journal’s Jon Ralston notes, Nevada is about to face a $400 million budget deficit that could lead to cuts in mental health, education, and other services. Even if you limited the use of hotel tax dollars to tourism spending (which the legislature doesn’t have to), it would be easy enough to use that to free up other money to spend on education — but then, you wouldn’t have a football stadium, just more schoolteachers, and those aren’t shiny.

Barring an unexpected outbreak of iconoclasm in the assembly, this stadium plan looks likely to pass, which leaves us only to consider exactly how costly it would be to Nevada, and whether it will gain NFL approval. On the first, I still haven’t been able to find any lease details for the Raiders stadium, which would help determine that “at least” way back in the opening sentence: There was one report that “the stadium authority would be responsible for day-to-day operations, including maintenance”; if that means fiscally responsible, that could easily drive the public cost up past $1 billion, taking it from “most expensive NFL subsidy ever” to “holy crap that blows any previous NFL subsidy out of the water.”

As for the NFL, who knows what the other 31 owners, who seem to have no love for Mark Davis, but who have to be excited about someone upping the ante for stadium subsidies, are going to do. Much will likely depend on whether Oakland officials make a counteroffer, or NFL owners think they can be induced to. But as we’ve seen before, the league tends to make these decisions less by weighing hard economic data than by weighing perceived ball size, so your guess is as good as mine.


54 comments on “Nevada senate passes $750m (or more) Raiders stadium subsidy, ball could move to NFL’s court

      • Thanks, Neil! I bet there’s no way the NFL turns this down, either. I bet they’re already eyeing Super Bowls there.

        • Goodell has been weirdly noncommittal about a Raiders move, even more so than he did with the Rams going to L.A. But it’s probably a mistake to read too much into the tea leaves.

        • The city’s occupancy is already packed with gamblers for Super Bowls on other coasts, so there’s little economic incentive to hosting one here. If anything, fans who want to buy a ticket to the game would have trouble finding a place to stay due to the number of people buying rooms to place wagers and watch on TV.

  1. I don’t see the NFL turning down this big of a public subsidy just to spite Davis.

    Likewise Oakland’s counter-offer will be exactly what it was before and what it should be: “We’re a really attractive market and you should want to invest here” which is true but not going to sway Davis or the NFL.

    Barring the assembly growing a spine this is done. We can all look forward to a new stadium that will be half empty in a couple of years. We can also look forward to Nevada returning to their old approach to mental health services: Buy the mentally ill a one-way bus ticket to California (they were sued for doing this).

  2. At this point bringing in Roger Noll to talk about a stadium deal is like bringing in David Irving to talk about te holocaust.

  3. Does this mean Oakland will become the new relocation threat for owners wanting a new stadium?

    • If I’m reading the tea leaves correctly, both Oakland and San Diego are going to offered teams during the next round of expansion.

        • I don’t think St. Louis has the appetite for these kind of subsidies anymore. Not everyone was sold on the $300 million subsidy. Now that the stakes are approaching a Billion, that’s going to be a tough sell. And they’re not likely to fall for the old 15 year escape clause (or the banana in the tailpipe) trick again.

        • 1) The league has no reason to expand at all, 8 divisions with 4 teams makes for easy, logical scheduling.
          2) That being said, the only way they would expand is if someone said, “here’s a free billion dollar stadium” – then, yes, they might consider it, for the same reason they’ll choke down Vegas as long as the state’s throwing $750 million at them. I don’t see that as likely from anywhere, particularly from SD, StL or Oakland.
          3) Levi’s will be the new threat, as it’s a market that’s typically had two teams and a new stadium that was built with room for two teams. That’s not saying anybody’s moving there in a few years or even at all, but it makes for an easy threat, and it’s a lot more plausible than most of the “well, we might go to LA” threats from the last 20 years since there’s already, you know, a stadium.

          • The NFL would expand to 64 teams if they could. Tidy divisions & scheduling wouldn’t stop them, and it never mattered before. No way the NFL turns down Vegas, either. They HAVE to know the subsidies gravy train is drying up. Crazy Vegas is crazy.

          • The subsidies gravy train is drying up? We wish. The NFL has so many offers it can afford to turn them down (St. Louis). Just about every team that wants a new or renovated palace gets it. I’m sitting here in Phoenix waiting for the next demand from the Cardinals, whose stadium will soon be 15 years old (or 105 in dog or stadium years).

        • No California city is going to provide subsidies to the NFL. And St. Louis, having been burnt twice, is highly unlikely.

          Once the Raiders and Chargers stadiums are decided (likely LV and LA at this point) the next in line for a move is probably the Bills. And that’s probably 5 years down the road.

          • I would have thought this too except the Bill’s new owner seems to actually like Buffalo and seems loathe to threaten to move. He may get a new stadium anyways but it seems he will do it by asking nicely, not threatening.

      • I can’t see any expansion, in the US at least. Not enough good markets will be left. I am assuming STL doesn’t want to pay the price anymore, and if the Chargers go to LA – San Diego won’t want to pay the price anymore either. Finally small markets like Jacksonville show the downside to small market additions with their lack of strong fan base and evidenced by their repeated trips to London (IMO).

        However, I think the 2 most important things hindering expansion would be the additional revenue sharing required (the pie gets smaller for everyone and not much bigger with the addition) and lack of talent. There are only so many good quarterbacks to go around. (As evidenced by our troubles here in Niner-ville). And they seem to be dropping like flies.

          • As I said: “[not] in the US at least.” London and Toronto would be possibly lucrative enough to have the league forget about the whittling talent pool of pigskin huckers.

      • If (or once) the Raiders leave Oakland, there will never be another NFL team there. San Diego would certainly become a relatively credible threat as a relocation or expansion destination. Oakland absolutely would not.

      • You can never tell what the NFL’s insatiable greed will lead to but expansion anytime soon seems unlikely. Ratings have been consistently down and even the greedy owners must be noticing that the continued shortage of quality QBs would be made all the worse by adding more teams. Their product isn’t great as is and would just get worse by watering down the talent.

      • The NFL is way beyond placing franchises in whatever cities are willing to offer stadium subsidies. Now it’s all about locating teams in attractive cities that will boost the League’s media profile, help TV viewership and act as intriguing destinations for traveling fans.

        St. Louis is a DUD. They could offer a free stadium plus a billion dollars in cash and the NFL would still say no.

        Oakland is a hip city and the Coliseum site is one of the best sites in the world for the NFL game day experience. (The best site, in my opinion.)

        San Diego is San Diego. The NFL is going to find a way to be there long term, even if it means letting baby Spanos fill his diaper in Inglewood. (Sorry, Neil. I know you said “no personal attacks”.)

        • No personal attacks *on other commenters*. Otherwise you already would be in the penalty box for your gratuitous slander of Roger Noll.

      • And I would definitely agree that Toronto and London are on the board as well. The issues with London are obvious and the issue with Toronto is that the minor league soccer team (Toronto FC) occupies the prime NFL stadium land.

        • None of these will get teams unless via a relocation backed with trucks of taxpayer dollars.

          None are big enough to fund a stadium with PSLs. Otherwise Oakland, St Louis and San Diego would have done so. No one in London cares about American football. Toronto might be plausible except it would kill the Bills.

    • Not likely. There will just be on Bay Area team, the 49ers, and without the competition they’ll be even more wildly profitable than they already are.

      Odds are with the Raiders gone the Coliseum will not be standing in a few years (assuming the A’s build a privately-financed stadium which is looking more likely by the day) and Oakland will not suddenly get an appetite for big public subsidies.

    • I don’t think the Bay Area will all that attractive for a second NFL team. Even losing the Raiders, it’s still a saturated sports market. Based just on market size and number of local sports teams, it makes more sense to put a second NFL team in Boston, Chicago, Dallas, Philly, or Houston than in SF/Oakland.

  4. Ben, I can’t recall when or how Roger Noll was thoroughly discredited for deliberate misrepresentation of established facts. Could you enlighten?

    • Noll is as anti-stadium subsidy as Irving is anti-Jew. And it colors both men’s research.

      Noll purposely ignores jobs information and the testimony of local hospitality industries in the same way that Irving purposely ignores the fact that millions of Jews disappeared and the testimony of prisoners who survived concentration camps.

      Now, given all of that, is Noll as bad a person as Irving? That’s for the people to decide. But we can definitely say that any type of anti-stadium subsidy testimony given by Noll should be viewed skeptically.

      • That is bullshit on two different levels, Ben:

        1) I’ve been following Noll’s work for 20 years, and he doesn’t “ignore” anything. He is one of the most well-read economists on stadium issues (and sports economics in general — he got his start doing research for the Seattle Pilots relocation lawsuit), and comes to a conclusion based on his understanding of those facts. You can disagree with him — hey, *everyone’s* testimony should be viewed skeptically ‚ but if you think he’s purposely biased, then you think that about a huge swath of the nation, including me.

        2) Comparing being “anti-stadium-subsidy” with anti-Semitism is … do I even have to say how offensive it is, and why? One is opposing a public policy, the other is opposing an entire people’s existence. If you’re going for the Nobel Prize in False Equivalence, you’re off to a great start.

  5. Honestly, I’m a nice guy, and I hate saying I told you so. But…

    I told you so.

    It’s all about who presents the largest gift. If I could boil the insanity of building sports facilities down to one key point, that would be it.

    Oakland isn’t done yet, though. Now they know how large their gift has to be. They can still win this race to the bottom if they want. I suggest they pull up and let Usain, er, Vegas win. They’re losing, why fight back?

    • Oakland is defintely done. No way they can match this shower of money and honestly, I don’t think they even want to try. Why would they want the burden of a facility that barely gets used and “requires” (per Davis) tons of real estate for parking/tailgating (that again, only gets used a handful of times a year)?.

      Getting rid of the raiders (and potentially the arena–discussion for another day), opens up land for sale/lease/development by the city.

      Baseball has more events per year (better use model), and needs less parking. And the owners appear to be willing to foot a lot of the bill (for now).

      A fine confluence of events with MLB’s Manfred stepping up pressure. The A’s are frothing at the mouth.

      • Agreed. The idiots here in Nevada just saved Oakland from itself. Now the city can utilise those funds to replenish social services, education, and infrastructure. Whereas this cesspool is facing a $400 million deficit, social services are already in shambles, cops and firemen have their hands out (using the stadium as a crutch to demand money) wanting hundreds of millions of dollars, education is dead last in every majour metric, transportation officials threatening voters with a hike in fuel taxes, etc.

        Gosh I can’t wait to leave Nevada.

        • Don’t be so hasty. I wish the part of California I lived in would secede and become part of Nevada.

      • The potential land uses for the Coliseum are key here. That land is right on a freeway and has it’s own BART station and is next to the airport. Locations like that in the Bay don’t make themselves available every day- we could fit a multitude of uses in that would give exponentially more financial gain than what’s currently there. It’s really no contest.

        There is absolutely no reason why a dollar of public money should be used to fund a stadium in the Bay Area.

  6. Who really gets hurt by this in my my view is the Vegas NHL team. Now, before they’ve even played a game their thunder is completely stolen by the Raiders. I think they were going to have troubles filling their building for 41 home dates even being the hot new thing in town.

    • The Vegas NHL team is also starting $500 million in the hole after offering that crazy expansion fee. But they do have the safety net of moving to Quebec if it doesn’t work out in Nevada. (unless the Coyotes beat them there.)

    • Also, the NHL team should call themselves the Las Vegas Raiders, totally block the NFL team.

  7. Man I can’t imagine what a final four in Vegas is going to be like, a super bowl, national championship game. Gonna be great.

    • Super Bowl…possibly. Can’t see how the NFL keeps the big show from Las Vegas if they give the ok for the Raiders relocation. It’s become an automatic to grant Super Bowls to new stadiums as a thank you for extracting bags of money from the locals.

      Can’t see a Final Four there. NCAA is too self-righteous.

  8. And we assume Davis can afford the relocation fee? Can’t imagine the other owners allowing the Raiders to move for free…

    • The Rams’ relocation fee ($650M) will be paid in 10 payments of $65 million a year starting in 2019. I assume the Raiders will have a similar multiyear plan, and a lower fee.

      In fact, keep your eye out for more subsidy shenanigans from Vegas (ticket/PSL/revenue guarantees etc.) to ensure the Raiders can “remain competitive” while shouldering this 10-year debt. $750 million toward construction is just the beginning.

      • The debt is spread over 33 years, and yes you are right: this is only the beginning. When it’s all said and done, the total subsidy will exceed $1 billion. And that doesn’t include the value of the payments over 33 years, which is unheard of in the municipal bond industry.

        I’ve said from the very beginning there is no way on Earth Davis will deliver $500 million. First off, he’s depending on $100 million from PSL sales. Atlanta, who has a much larger corporate base and has twice as much wealth than the entire state of Nevada , hasn’t reached their target of $250 million in PSL sales and are slashing prices to do so. Second, the NFL was clear in terms of the amount they will contribute to the construction of a new stadium: $300 million for existing market, $200 million for another market. So how is Davis going to afford the additional $200 million? This doesn’t include the relocation fee.

        Davis will complain to the county and state saying the relocation fee is cost prohibitive and will force him to reduce his financial contribution to zero. The public will be asked to pick up the difference because without it, the Raiders can’t come.

        Those who voted for this will be voted out but why would they care since they passed an ordinance granting them the authority to not disclose any potential conflict-of-interest.

    • I’m assuming it’s $550M? Do they have to pay it all at once? I would imagine not.
      The NFL isn’t going to turn their noses up at a $750M subsidy & the odds of a new stadium in Oakland is basically nil.

  9. Nice article from the Huffington Post that provides a bit more column space to the “no” camp.:

    http://www.huffingtonpost.com/entry/las-vegas-nfl-stadium-sheldon-adelson_us_57fd3b5ae4b07b9b8752e668

    And a more pointed Op piece on Market Watch:

    http://www.marketwatch.com/story/raiders-stadium-debacle-is-a-vegas-casino-heist-2016-10-13

  10. Thanks for the response re: Relocation Fee.

    According to the San Francisco Chronicle this morning, Oakland might still be in the game:

    http://www.sfchronicle.com/bayarea/article/Las-Vegas-Raiders-Not-so-fast-Oakland-says-9964913.php?t=e6bf3a93f0&cmpid=twitter-premium

  11. On KUNR this morning (Local NPR station) they reported that in addition to approving the Stadium they also approved a .1% increase in sales taxes in Clark County (County with LV in it) to hire more police officers – which they (the county) has lobbied for for years. Meanwhile they are going to have to raise my taxes just to keep our services where they are RIGHT NOW (you know….last in the nation….)

    But AT LEAST they aren’t raising our taxes to build a stadium. Win Win!

  12. To say we fellow owners have no love for Mark Davis is simply not true. The minute he chisels a giant wad of public stadium cash out of the rubes in the Nevada legislature, we love him to death!