Adelson backs out of Raiders deal, jeopardizing Vegas move either lots or not at all

And speaking of “you can’t fire me, I quit” ultimatums, squintillionaire casino baron Sheldon Adelson responded yesterday to Oakland Raiders owner Mark Davis moving ahead with a Las Vegas stadium lease proposal without consulting him by saying fine, he doesn’t want to play Davis’s old reindeer games anyhow:

Billionaire casino magnate Sheldon Adelson has backed out of a deal to help construct a $1.9 billion stadium for the Oakland Raiders, throwing the team’s proposed move to Las Vegas into jeopardy…

“It’s clear the Raiders have decided their path for moving to Las Vegas does not include the Adelson family,” Sheldon Adelson said in the statement. “So, regrettably, we will no longer be involved in any facet of the stadium discussion.”

Adelson blamed conditions named in a 117-page proposed stadium draft agreement, which the team presented at a meeting of the nine-member Las Vegas Stadium Authority last week. He said the draft proposal, which called for terms including $1 annual rent, control over field scheduling and exclusive naming rights for the team, sent “shockwaves” through the community and was a surprise to his family.

“We were not only excluded from the proposed agreement; we weren’t even aware of its existence,” he said in the statement.

This is not entirely unexpected, given that Davis had already indicated he was preparing to pursue the deal without Adelson, even going so far as to line up Goldman Sachs as a financing partner if need be. (Sure, he’d have to repay Goldman Sachs on their loan, but Adelson wanted a cut of revenues or maybe part-ownership of the team to repay his own investment, so potato-potahto as far as Davis’s bottom line is concerned.) And that proposed lease, released last week amid headlines about how Davis only wants to pay $1 a year in rent and keep all the stadium revenues for himself, didn’t mention Adelson at all, so there’s really no reason for anybody to flip out about this.

Flipping out, of course, is precisely what some people are doing:

Elected officials including Clark County Commission chair Steve Sisolak, who had spoken with Adelson earlier on Monday, said the development put the future of the move in jeopardy.

“This is not a wrench in the wheel, the wheel fell off,” he said. “This is an enormous setback in my opinion.”

(It’s “wrench in the works,” not in the wheel, which would be — oh, never mind.)

The issue here is less whether Davis can find somebody else to throw a few hundred million dollars in cash his way in exchange for future payments (that’s exactly why places like Goldman Sachs exist) than what it means politically to lose Adelson, whose connections were what enabled the Raiders to get their $750 million stadium subsidy offer from the state of Nevada in the first place. And while the subsidy legislation has already passed, Davis and the state still need to negotiate that lease, so it’s a bad time to be losing a powerful local friend — something you’d think Davis would have thought through, if you assumed that sports team owners think more rationally than the rest of us, which is probably a bad assumption.

In any event, this is a worthwhile time for Nevada elected officials to remind themselves that the Vegas Raiders stadium plan really is a godawful one, especially when you consider not just that $1 a year rent but that Davis would get all naming-rights, ticket, and even concessions revenue, while the state stadium authority would be on the hook for all operating expenses and even any property taxes, per the team’s proposed lease. While backing away from a deal because Sheldon Adelson isn’t involved in it is usually the exact opposite of what I’d recommend, this might be a good time to make an exception.


31 comments on “Adelson backs out of Raiders deal, jeopardizing Vegas move either lots or not at all

  1. The deal Davis wants: no rent, keep all the revenue without paying the upkeep sounds very much like the deal the rubes in Minnesota signed off on. The Gov. didn’t even know that the Wilfs (Vikings owners) would also keep all the PSL revenue. This “deal” was jammed down the throats of the citizens of Minn. who voted by a margin of 75% to 25% against spending for a new sports palace by some really, really, shady semi-legal tactics.

      • Exactly Neil. Davis pay essentially no rent while sticking the city/county/state with the upkeep. He keeps all revenue, even for non football-related events. This proposed “lease” (which is really a management contract with the word lease as the euphemism) mirrors that of the Indiana Pacers minus the 100% public contribution.

  2. Ha! You mocked me when I predicted these two boneheads would end up in a power struggle. You owe me a de-mocking. Unless they get back together, then I’d owe you a de-de-mocking, or is it re-mocking? Economics is hard. My next prediction is that Sheldon Adelson’s newspaper publishes a multi part story on the dangers of professional football.

    • And now it’s gotten worse. I said from the very beginning this would happen if the NFL’s arrogance (namely Jerry Jones) got in the way. It did and now Davis’ fallback plan is crumbling.

      http://www.espn.com/nfl/story/_/id/18590188/oakland-raiders-las-vegas-stadium-deal-doubt-goldman-sachs-re-evaluates-involvement

      Las Vegas is a different animal. It’s incredibly corrupt and businessmen here bicker and fight among each other. However, if an outsider tries to cross one of them, good luck. Adelson, for all his faults, attempted to negotiate in good faith. Davis went behind his back and embarrassed him. There is no way Adelson takes this going down. That’s why the call to Goldman was made.

      So what does Davis do now? He can’t use LA as leverage. Oakland pretty much is telling him to kick rocks unless he agrees to their terms. Now the Vegas business community is turned off.

      • True. Goldman’s original interest was based on the notion that someone else (Adelson) was involved, though. Now that they know there’s no-one else to bid against (which I think you’d agree they played a part in making happen…), they’ll want better terms (if they are willing to play at all).

        From a parasite’s perspective, why pay someone to allow you to suck the lifeblood out of them when you can have them pay you for the privilege of being drained?

  3. If the Raiders and the NFL can come up with $1.1 billion for LV, why not simply stay in Oakland and in the process eliminate the relocation fee? It appears the A’s are taking a serious look at Howard Terminal (also looking at sites near Laney College), clearing the way for the Raiders to renovate the Coliseum to their specifications.

    http://www.mercurynews.com/2017/01/30/purdy-raiders-road-to-las-vegas-hits-toxic-spill-but-isnt-blocked-assuming-the-goldman-sachs-dollars-are-there/

  4. This would make for the GREATEST rivalry of all times.

    Raiders to San Diego!

    Chargers fans (myself included) are so emotionally distraught over the recent abandonment, it’s likely the entire fan base would rally. Now, I do admit, not all would be willing to jump on the Raiders wagon…however, what a smack in the face to the Spanos Org.

    Stadium aside, this would be a great opportunity for the NFL to maintain a 55 year NFL host city. WIth the MLS interested in the Qualcomm site, maybe this is the time to jump on board. MLS/Developers have already said they were planning to leave enough room for a future NFL stadium.

    Not sure if anyone on this site has been to a Chargers / Raiders game in SD…Sellout. Black and Siver – more than 75%.

    • Ideally they’d do a name swap too. So the old Chargers become the New Raiders (who would be popular in LA) and the Old Raiders become the New Chargers, who’d be slightly more popular in San Diego with Spanos out of the picture. Of course you’d still have the New Chargers/Former Raiders wanting a new stadium, and suddenly there are 3 teams in Southern California, and we’re not living in fantasyland.

  5. Meanwhile in Reno: Washoe County School District busses are so overcrowded that students are forced to sit in the aisles. And that’s that something the State is ACTUALLY SUPPOSED to pay for…..

    http://www.kolotv.com/content/news/Students-forced-to-sit-in-center-aisle-of-crowded-bus-412230443.html

  6. Well good for the Adelson family!Take that Mark Davis!Seriously,sometimes Mark Davis is so dumb….Mark, your choices are growing slimmer by the day.
    #1 stay in the east bay
    #2 make a deal with the York family to bunk with the 49ers
    #3 As Oscar Bly mentioned above move to San Diego.It would be funny if the city of San Diego then built a new stadium for your team but No Mark you would find a way to mess that up the way your Greediness is shutting down temporarily the Vegas move.

  7. I’m a little thick on this point, but what was Goldman Sachs role? Was Aldeson borrowing money from them to pay for the bulk of his share? If so, I assume he put a little equity in himself and was going to pay the loan off out of his share of the stadium revenues (or the 24K gold flakes that chip off his bathroom faucets).

    So in theory, Davis would do the same. So why would Goldman Sachs be backing out? Possibly b/c Davis’s only asset to go after in case this thing implodes is the Raiders?

    Despite who is actually in the deal, I can’t see how this thing can actually generate enough income to pay off the $2B in construction costs and relocation fees.

    Maybe Goldman Sachs is actually having someone look at the numbers now??

    If, as some folks have said, that Aldeson carries a lot of weight in Vegas, and as Jay said “if an outsider tries to cross one of them, good luck.” , it may be hard for Davis to sell those precious PSLs and luxury boxes.

    • Scroll up, JC, I discussed Goldman Sachs’s role in the item itself.

      (In short: When Adelson and Davis got into a tiff, Davis said he’d go to Goldman Sachs for money instead of Adelson. Except now Goldman appears to be getting cold feet as well.)

  8. Goldman Sachs is one of the Sands Corp’s largest creditors. They won’t jeopardize that relationship for the sake of the Raiders. Reportedly, there is no deal if Adelson isn’t part of it.

      • http://deadspin.com/reports-goldman-sachs-also-pulling-out-of-raiders-stad-1791842937

        CITATION, KA POW. Of course, no reason given for the GS pull out and I have no idea, who those two gentleman are and twitter and everything can still be worked out and maybe this is just part of the deal making process.

        But, thanks Neil.

  9. Raiders should be a permeant away team. Give them the extra storage room at Levi’s Stadium so they feel like they have a home.

    • Bingo. Banks and financial institutions are not in the business of not getting their money back. They will track you down until death, and if there is a debt outstanding, they’ll go after your immediate family to get it.

      This entire fiasco is fantastic. The NFL in all their leveraging of cities against each other and uncontrollable greed has finally caught up with them. Spanos ruined the LA play by taking the owners up on their offer to relocate there if San Diego wasn’t “viable”. Then they have the nerve to get angry at Spanos even though when he asked for more financial assistance they said no. Davis doesn’t want to share the Santa Clara stadium with the 49ers. Speaking of which, Santa Clara is about to sue the 49ers for breach of contract. In turn, the 49ers hire a color commentary for GM for an unheard of 6 years, bypassing 9 people much more qualified than he. The Rams is a dumpster fire while the NFL laid waste to St. Louis on their way out, saying the city can’t afford a professional football franchise. Not satisfied with telling cities how inferior they are to have the NFL’s product, they pretty much crapped on Oakland thinking Vegas was a sure thing. And now you have this.

      Funny thing is the NFL had 2 decades to come up with concrete plans on how to handle the LA situation and they still managed to screw it all up. The Raiders should be in LA if not Oakland and the Chargers should be in Vegas if not in San Diego. Problem is, LA is Raider country and there is no way Toupee Stan is going to allow his team to be overshadowed. Proof that even billionaires can be clueless when it comes to devising a plan of action.

  10. Too bad Alameda County gave Davis 2 one year lease extension options on the Coliseum. Negotiations for the upcoming season would have been intriguing.

  11. Anyone else thinking that a badly cut red wig and a dead fish wrapped in newspaper might arrive in the NFL’s head office this week?

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