Nevada governor to call October special session on handing $750m to Raiders, Adelson

If there was any doubt about whether Nevada Gov. Brian Sandoval was going to call a special session of the state legislature to discuss $750 million in subsidies for an Oakland Raiders stadium in Las Vegas after his hand-picked task force recommended spending the dough, that was dispelled yesterday when Sandoval said this:

“I am convinced that, given the circumstances and timing with regard to public safety, the convention center, and the NFL, there is an opportunity to significantly improve the tourism infrastructure of Southern Nevada — already the best in the world,” Sandoval said.

“Based on the current environment, I believe a special session of the Legislature is warranted and should be called as soon as can be practicably accomplished,” he said.

The session is likely to start sometime between October 7 and October 13, which will give the Clark and Washoe county commissions time to fill five vacant seats in the legislature before then. You have to figure Sandoval has taken the temperature of the legislature and figures the stadium plan has at least a decent chance of passage, or he wouldn’t be doing this, but we’ll see once deliberations start. A stadium bill would need at least two-thirds approval, remember, since it would involve a hotel tax hike; failing that, a simple majority vote could kick it to the seven-member Clark County Commission, which would need five votes to pass it.

If it seems incredible to you that Nevada is on the verge of approving the largest NFL stadium subsidy in history to benefit a billionaire developer and the owner of a team that hasn’t had a winning record in 14 years, yeah, me too. At this point, I’m mostly curious to see whether the legislature spends any time at all debating the niceties of a stadium lease — who would pay for future maintenance, operations, and upgrade costs, and would Mark Davis be able to get out of his lease and move again (or threaten to) anytime soon? Not holding my breath given how the political discourse has gone so far, but there’s always hope.

Court rules St. Louis Rams PSL contracts still valid, could cost Kroenke $150m+ in payouts (UPDATE: probably not that much)

Well, ain’t that a kick in the head:

A federal judge in St. Louis ruled Wednesday that the Rams must refund deposits to some fans who purchased personal seat licenses during the franchise’s two decades in that city and offer others the opportunity to buy season tickets to games in Los Angeles.

I was dimly aware that St. Louis Rams PSL holders were suing over the season-ticket rights they’d purchased in perpetuity suddenly being worth nothing since there were no St. Louis Rams season tickets to buy anymore (see my brief note here), but I never thought they’d actually win. Nor, presumably, did Rams owner Stan Kroenke, because he is now seriously hosed, to a degree that we’ll attempt to figure out in a second.

First, a primer on PSLs: Initially created as a bonus for fans who bought inaugural Charlotte Hornets season tickets (not only do you get the tickets, but if you don’t want them anymore you can sell your spot on line to someone who does!), they quickly turned into a lucrative way for team owners to raise cash: Instead of first-come-first-serve tickets, offer fans the chance to buy the right to first dibs, with the carrot that they can then re-sell that right down the road to recoup at least some of what they laid out. In some cases with popular teams in cities with lots of fans with money to burn, it’s been lucrative indeed: The San Francisco 49ers managed to bring in more than $500 million from their PSL sales, which is a sizable chunk of change. And Kroenke has been hoping for similar revenue from PSL sales to help pay for his new $2.5-billion-ish stadium in L.A., though he can’t start selling them until next February as part of his relocation deal with the NFL.

So how much will this court decision, assuming it holds up on appeal, cost Kroenke? Of the 46,000 Rams PSL holders, there were two classes being represented — those whose PSLs were initially bought through a broker and those whose PSLs were bought directly from the team — and thanks to differences in the two contracts (whee lawyers!), each group now gets a slightly windfall: Broker purchasers get a refund of their PSL “deposit” (the judge declined to define what that means for now), while direct buyers get to actually transfer their PSL rights to the Rams’ new stadium. And while that may not sound so great — do any St. Louis Rams fans really want to fly to L.A. to see their former team play? — remember, the whole point of PSL rights is that they’re transferrable, so this is now a hugely valuable asset that they can sell, and more important, that Kroenke now can’t.

How much actual money would that cost Kroenke? Now we’re deep into speculation, since we don’t know how many direct vs. broker buyers there were, nor how much Kroenke was planning on selling L.A. PSLs for. Deadspin reported that the ruling will “likely cost the team millions of dollars in returned deposits and foregone profit,” but that’s almost certainly way too low: If there are 23,000 direct buyers and 23,000 broker buyers, say, then refunding 23,000 fans for their St. Louis purchases at $250 each would cost $5 million, while handing over free L.A. PSLs to another 23,000 fans could cost — let’s see, it’s a 70,000-seat stadium, so if Kroenke was shooting for $500 million in PSL sales, then scrapping 23,000 of those would lose him … $160 million, something like that, depending on which seats the judge says he has to set aside for St. Louis PSL holders?

It’s hardly a deal-breaker when you’re spending over $2 billion on a new facility, sure, but still, unexpected nine-digit losses are never fun. However all this turns out, it’s likely to be at least a moderate-sized headache for Kroenke and his accountants, as well as a cautionary tale for both teams writing up PSL contracts and fans buying them: Read the damn fine print, because it could end up being worth a hell of a lot of money.

UPDATES: As a couple of commenters have pointed out, the cost to Kroenke probably won’t be as much as I’d guesstimated: First off, more than 90% of the PSLs were sold by the broker, not the Rams, so that pushes most of the PSL holders into the less-lucrative “you get your deposit back” category. Second, the St. Louis PSLs were set to expire after the 2024 season (the Rams lawyers did something smart, anyway), so even for the L.A. PSLs Kroenke has to now pull off the market, he’ll get to resell them again in a few years. So we’re down in the $15-25 million cost range for Kroenke, which while it’s going to sting, is more of a rounding error for a guy playing in this spending stratosphere.

Oakland offered $167m for Coliseum land, rejects bid because Raiders still might want it

Speaking of selling stadiums, turns out somebody does want to buy the Oakland Coliseum, so long as it comes with all the land that it (and the neighboring Oracle Arena) sits on:

A group of investors with ties to NFL Hall of Famer Ronnie Lott is offering to purchase the Coliseum land with the hopes of keeping the Raiders in Oakland, according to a letter the group’s attorney sent to local officials last week…

The group proposes purchasing the Coliseum land — which includes Oracle Arena and other nearby properties — for $167.3 million, which accounts for bond obligations owed and prepayment penalties. The plan includes upgrading and replacing the site’s sewer and septic systems, which infamously have backed up during games, spewing raw sewage into dugouts and team clubhouses.

Note that Lott, who previously expressed an interest in developing the Coliseum site with a new Raiders stadium included, isn’t actually involved in the bid, though some of his partners are. The front man for the land bid appears to be Martin J. Greenberg, who is co-founder of the National Sports Law Institute at Marquette University Law School, which is just weird, but I guess everybody in the stadium world is tempted to jump in and be part of the game at some point.

Oakland Mayor Libby Schaaf immediately rejected the bid, though it’s not immediately clear whether this was because she felt it was too low a price for 120 acres of downtown (well, sort of downtown) Oakland land, or because she doesn’t want to piss off Raiders owner Mark Davis and A’s owner Lew Wolff, each of whom would rather develop the land themselves. Schaaf told the East Bay Express:

“We did not recommend consideration of this offer at this time,” the mayor said. “We remain committed to a team-centered development. We want the Raiders and the NFL at the center of this future site.”

There are so many players here and so much potential jockeying for leverage that it’s hard to tell who’s trying to put one over on whom at any given point, but at least, unlike in Phoenix, there are actually some people who want the stadium land in Oakland. Actually wanting to pay for building a stadium without getting a cheap deal on development rights is another thing, but hey, baby steps!

Clark County officials ask questions about Raiders stadium plan, but none of the right ones

With the Nevada legislature not in session, it’s been left to the Clark County Commission to debate the proposed $750-million-plus subsidy for a Las Vegas stadium for the Oakland Raiders. They did so yesterday, and of the seven commission members, two asked lots of questions about the deal:

A barrage of questions came from Commissioners Marilyn Kirkpatrick and Chris Giunchigliani…“It gives a lot of authority to one group of folks to determine … how the dollars are spent, all of those leases that are created early on, and a lot of the protections I think we need as a county on the bonding are done by somebody else without any input from us,” [Kirkpatrick] said after the meeting. “None of that said they had to live in Nevada. There was a lot of detail left out on who can actually sit on that authority.”

Kirkpatrick added she wanted to see language guaranteeing Nevada workers the bulk of the jobs created by the stadium project.

Giunchigliani, who has opposed public financing for the stadium, said she needed more information about the proposed hotel room tax increase. The commissioner added that she would rather see Adelson put his entire $650 million stake into the project before the county began paying.

Those are questions, all right. They’re not any of the questions that they should be asking — like “Is it really worth it to Clark County to put $750 million in tax money into this?” or “When are we going to see a proposed lease so we know whether taxpayers will be on the hook for future maintenance and upgrade costs?” — but it’s more than commission chair Steve Sisolak, who was on the appointed task force that proposed this deal and was in the position of defending it, or the other four commissioners, who “were near silent on the matter” according to the Las Vegas Review-Journal, would-be stadium subsidy recipient Sheldon Adelson’s pet newspaper.

Or if you want alternative coverage, here’s an entire report from KSNV-TV that thinks that the appointed task force consisting largely of casino executives is a county “tourism committee.” I’m done, see you tomorrow.

Goodell asked about Raiders’ Vegas move, answers like NFL commissioners are paid to answer

Roger Goodell was asked on Sunday if the NFL would approve an Oakland Raiders move to Las Vegas, and said everything you would expect from a man who needs to balance keeping various owners happy, not pissing off local elected officials, and keeping open the option of some kind of stadium bidding war:

“There’s still a lot that has to happen before we would get to that stage,” Goodell said of the owners approving Las Vegas as an NFL city. “Recognizing that they came out of committee with a bill, but there’s still a lot of work to be done to improve that recommendation.”

He said he is still evaluating whether having a team play in a casino-filled city is a good idea…

“Well, you never want to see a community lose their franchise once, much less twice,” Goodell said. “That’s why we work so hard with our communities to say, ‘This is what you have to try to get to,’ because you need to try to make sure this franchise continues to be successful.’

“The Minnesota community did that in a great way. I think we can do it in Oakland. I think there’s a solution there, but it takes the community to help identify it.”

You can parse this in a million different ways, but the way that makes the most sense is “We’re keeping our options open.” Or maybe “Keep throwing money on the table, we’ll count it up later to see who wins.” Right now it’s tough to imagine the NFL owners turning down an offer of at least $750 million if the Nevada legislature offers it, casino city or no, but there’s still a lot of haggling left to go.

Rams celebrate return to L.A. by making fans sit in sun, running out of water by halftime

The Los Angeles Rams will play at the Los Angeles Coliseum for the next three seasons while their new stadium in Inglewood is being built, and they got off to a terrible start in Sunday’s home opener. This had very little to do with the Coliseum being 84 years old, and everything to do with it being so hot that 160 fans were treated for the heat including 14 who had to go to the hospital (it doesn’t help that the Coliseum lacks even a partial roof), and to the Rams management not doing proper crowd control and not thinking to order any jumbo cases of bottled water. From Deadspin, which has been diligently compiling all the horror stories:

Here are your best stories from the game. From Ian, a success story:

I went to the game with a couple buddies yesterday and the concession stand debacle was as big of an abortion as advertised. Left with 4:20 left in the 2nd quarter to grab waters for our group and ended up having to wait in 3 different lines since the first two I was in ran out. Continued to wait through the entirety of halftime and returned to my seat with about 7 minutes left in the 3rd… BUT I GOT THAT DAMN WATER!

Matt tells us that concessions were woefully understocked in St. Louis too:

My wife volunteered regularly for charity concession booths at all of the pro sporting events in St. Louis, including the Rams games. She always said that the Rams ran out of everything before half time. The Cardinals and Blues never had all of the problems she saw at the Rams games.

The whole organization is obviously run by amateurs. The product on the field, marketing blunders, concessions, drafting players. They fail in literally every way they can. Not any different than the other teams that asshole owns.

Another tipster describes the traffic, both human and motor:

Traffic, gridlock. Entry, chaotic and overcrowded. Concessions, sorry we’re out by halftime!? Protection from elements, nada! Rams fans, smack talking and booing their own team with chants to kill the Seahawks kicker! People smoking. Security, what security? Leaving the stadium, dangerously crowded in all walkways. Gridlock at the trains/busses. Complete hell! The NFL should not allow that stadium to host ANY games until they can provide safety and security for the fans!

At least fans only had to pay between $50 and $1,000 for parking. Welcome back to the NFL, Los Angeles!

 

Brand-new Vikings stadium forces players to be carried to locker room through sports bar

The Minnesota Vikings held their first regular-season game yesterday at their new US Bank Stadium — or, as Minneapolis City Pages readers voted to nickname it, A Bad Use of Taxpayer Money — and star running back Adrian Peterson got hurt, as football players will do with alarming regularity. Then he had to be carried to the locker room through a restaurant:

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Having players walk from the locker room to the field past fans is an increasingly popular design decision, and this was being sold as a plus just a couple of months ago:

After Vikings players get ready in the locker room, it is really just a short walk out onto the field — and that walk will be a cool part for fans and players alike.

They go down a pathway through what is called the Delta Sky Club, which fans can be at pregame, during the game and postgame. Players walk right past the fans and out onto the field for pregame warmups.

This, it now turns out, was a really really bad idea. Maybe there’s a shortcut that Vikings staffers could have taken with Peterson but they didn’t? That would be a good thing. Otherwise, the Bad Use of Taxpayer Money just got a little bit worse.

Unelected board okays $750m-plus Raiders stadium subsidy, democracy maybe to commence soon

The Southern Nevada Tourism Infrastructure Committee yesterday approved spending $750 million in hotel tax dollars on a new stadium for the Oakland Raiders and whoa whoa hold on, take a deep breath and read back to the beginning of the sentence, okay? The SNTIC, despite that official-sounding “committee” in its name, is an unelected body appointed by Nevada’s governor to “explore potential funding mechanisms to support new tourism-related initiatives,” and looks like this:

  • Steve Hill Chairman Executive Director Governor’s Office of Economic Development
  • Len Jessup Vice Chairman President University of Nevada, Las Vegas
  • Carolyn Goodman Mayor City of Las Vegas
  • Steve Sisolak Chairman Clark County Commission
  • Kristin McMillan President and Chief Executive Officer Las Vegas Chamber of Commerce
  • Tom Jenkin Global President Caesars Entertainment
  • Bill Noonan Senior Vice President of Industry and Governmental Affairs Boyd Gaming
  • Bill Hornbuckle President MGM Resorts International
  • Kim Sinatra Executive Vice President, General Counsel and Secretary Wynn Resorts
  • George Markantonis President and Chief Operating Officer of The Venetian and The Palazzo Las Vegas Sands Corporation
  • Mike Sloan Senior Vice President of Government Relations Station Casinos

So, one governor’s aide, the mayor of Las Vegas, the county chair, the president of the university that would get to play at the stadium, the head of the chamber of commerce and six casino executives — including a top exec of Sands, the company that would be getting the $750 million — thought it was a good idea to send this plan to the state legislature. There, exactly none of them will have a vote on actually approving the deal, though Sisolak might get a vote if the state punts it to the county, as is its right if it can’t get a two-thirds majority to pass a stadium bill.

So what, exactly, did these seven business leaders, two appointees, and two elected officials approve? Take it away, Las Vegas Review-Journal:

At a meeting stoked with enthusiasm and a few minor squabbles, the 11-member committee unanimously supported the stadium developers’ preferred funding option, which requires a $750 million public investment, eliminates a 39 percent public contribution cap and allows the private partners to reap all stadium profits during the lifetime of the Raiders’ lease.

And that’s how it was reported by the paper that is owned by Sands owner Sheldon Adelson, mind you. So stark was the SNTIC’s capitulation to every one of Adelson’s demands that even the paper that isn’t allowed to say anything bad about the deal had to shake its collective head in wonderment.

What we know about the stadium proposal: Clark County would raise hotel taxes by 0.88%, and direct the proceeds to paying down $750 million in public stadium construction debt. (The hotel tax hike is projected to be plenty big enough to cover those costs.) Adelson would kick in $650 million, and Raiders owner Mark Davis would provide $500 million, though they would presumably get to offset their costs with naming rights fees and PSL sales and NFL G-4 funds, whereas the county would get none of this money. Another $10.4 million a year (roughly $150 million in present value) in sales tax, live entertainment tax, and business tax from an area around the stadium would get siphoned off by the stadium authority, though the SNTIC’s stadium Powerpoint makes it appear that maybe that money would go toward the same $750 million payment, and not be on top of it.

I’m hedging on that last one because the state-controlled stadium authority could well be stuck with additional costs — future capital improvements to the stadium, say — depending on the ground lease that it agrees to with Adelson. A ground lease, mind you, that hasn’t actually been negotiated yet. This, people, is crazytown, but sadly the kind of crazytown that is all too common in public stadium negotiations, particularly when it’s between the developers that are asking for the money and an unelected body that the developers themselves sit on.

The next step now is for Gov. Brian Sandoval to decide whether to call a special session of the legislature, since Davis would want to apply to the NFL for relocation at its January owners’ meeting, and there’s no regular legislative session scheduled before then. (Why should the Nevada legislature be playing to the NFL’s clock? The two-minute warning, duh.) If he does, which seems likely, then the battles will start over getting the necessary two-thirds vote of the legislature to approve the tax hike — or, if that can’t be arranged, a simple majority vote to punt the deal to the seven-member county commission, which would then have to vote at least 5-2 for the stadium to be approved.

It’s still no sure thing, in other words, but the SNTIC has set the framework for debate, which is no longer “What, if anything, should we offer the Raiders to move to Vegas?” and now instead “Should we give Sheldon Adelson at least $750 million in tax money, and possibly a whole lot more, so the Raiders will move here? Y/N.” Residents of Nevada, if you have an opinion about this, let your state lawmakers know.

UPDATE: Almost forgot to mention the best thing ever in the history of things:

Nevada officials haggling over Raiders stadium are the worst hagglers in Haggletown

Last week I picked on Nevada officials for focusing on relative trivialities in Oakland Raiders stadium negotiations instead of the bigger question of whether spending $950 million in tax money on an NFL stadium makes a damn bit of sense. But I didn’t realize just how trivial they were thinking — check out this latest report from the Las Vegas Review-Journal (a fully owned subsidiary of would-be stadium builder Sheldon Adelson):

One of the financing options before the committee includes that 39 percent cap and would set the developers’ “preferred return” at 10 percent on up to $650 million.

That option also calls for a 50-50 split of the cash flow after the 10 percent return between the developers and a capital improvement fund for the stadium project. It would not allow operating shortfalls or overruns in construction costs to be added to the preferred return calculation.

The 39% cap I discussed last week: Basically it would cut the public’s costs if the stadium came in under budget, but that never happens anyway, so it’s not worth worrying about. Getting taxpayers a share of the stadium cash flow sounds like a great idea — we’re spending a lot of the money, we should get some of the proceeds! — until you think about the details of how this would work: The first $65 million a year in profit would go to the developers (that’s a 10% return on $650 million), after which the public would get half of the remaining profits — but only to use on future stadium improvements. Hands up, anyone who thinks that 1) an NFL stadium is really going to throw off more than $65 million a year in profits after paying off construction costs, and 2) if it somehow does, the owners of the Raiders and Adelson’s casino company won’t find some way of hiding the money in one of their other pockets to avoid sharing any of it with the public?

So far Adelson and Raiders owner Mark Davis have rejected both these proposals, but to be honest, Nevada lawmakers shouldn’t sweat over either of them, because they’re next to worthless for the public. If public officials want to get a slice of money set aside for future stadium improvements, they should just put it in the damn lease that Adelson and Davis have to pay for future stadium improvements since they’ll be running the place, and not worry about slicing off slivers of future mythical profits. And if they’re concerned about the cost of construction, don’t worry about what happens if it comes in too low — rather, start by not opening your bidding at the $950 million that was the opening ask of the guys across the table. Especially when the starting bid of the city you’re competing with is zero.

Sure, “That sounds too rich for our blood, would you take, say, $250 million?” is going to get a huffy reaction from Davis and Adelson, but then, asking for anything is getting a huffy reaction from those guys, so might as well ask for something that’s actually worthwhile. As usual, elected officials are proving that they’re really terrible at this stuff.

Nashville to explore cost of upgrading Titans stadium, Predators arena

The city of Nashville is considering spending $355,000 to assess the condition of the Tennessee Titans and Nashville Predators‘ venues, to determine what future maintenance and upgrade costs are likely to look like:

It comes as Metro is on the hook for up to $11 million to pay for a range of maintenance upgrades over the coming years to fulfill the city’s contractual obligation to the Tennessee Titans under a 1997 stadium deal that lured the NFL’s Houston Oilers to relocate to Nashville. That figure is on top of the $15 million Metro spent this past year to cover a replacement of all seats inside the 18-year-old stadium…

“I think if we have a benchmark (on costs) to start with, I think it will give us all a comfort-level, and then we can get into the political discussion about how we’re going to pay for it and what the best options are going forward,” [Nashville Chief Operating Officer Rich] Riebeling said.

“We’re seeing the obligations grow and we know that,” he said of Nissan Stadium. “This isn’t going to change. It’s an older building. You look around and it’s hard to believe that it’s getting on 20 years old, but it is. So we’ve got to start thinking about this.”

On the one hand, this is a perfectly reasonably thing to do: If you’re on the hook for future building upgrades, you probably should be thinking about what they’re going to be before the bills come due — and even, maybe, thinking about whether it’d be cheaper to replace the building than to repair it. (Almost certainly not, but it’s worth looking into.)

On the other hand: Who on earth thought it was a good idea for Nashville to be on the hook for future upgrades to their sports teams’ venues? In the normal world, either one of two things happens when a building is built: Either the people who are actually getting use out of the place own or operate it, and have to pay when the seats wear out and they want new ones; or the owners charge increased rent to cover the cost of upgrades. Nashville did raise ticket taxes in recent years to help pay for venue improvement funds — and as we’ve discussed before, ticket taxes mostly end up coming out of team owners’ pockets — but that’s not quite the same as actually getting to pass along the costs of upgrading buildings that are of zero use to the public if nobody’s playing there.

Anyway, let’s hope that this is a legit study, and not just a gambit for somebody to start arguing, “Hey, the Titans’ stadium is almost 20 years old, let’s build a new one, or at least do major renovations on the public’s dime!” But that never happens, right?