The development agreement between the Oakland A’s and the Las Vegas Stadium Authority has finally been posted in advance of today’s authority meeting (which is about to start at 3 pm local time), and let’s see what’s in there about the long-awaited financing details for John Fisher’s proposed stadium:
Section 3.2 Payment of Project Costs Generally. The Project Costs will be paid with, or otherwise reimbursed using, the sources of funds listed in subsections (a), (b), and (c) of this Section 3.2 below
(a) is the $380 million from the county and state that was approved in June 2023. (b) is personal seat license sales. (c) is:
StadCo Contribution Amount. An amount, as determined from time to time, equal to the amount necessary to complete the Project Improvements in accordance with the Project Cash Budget minus the sum of (i) the Authority Contribution Amount and (ii) the PSL Contribution Amount (such amount, the “StadCo Contribution Amount”).
So the state of Nevada will provide $380 million, and the A’s will sell PSLs, and anything not covered by that will be covered by StadCo (the A’s) by … paying money. From somewhere. Fisher will be able to recoup $180 million by selling the transferable tax credits that were approved by the state last year, but other than that — after my first quick read, anyway — there don’t appear to be any details on how much the stadium will cost or how it will be paid for.
So what was all that about Fisher promising to “set forth the sources of financing” that was in the authority meeting agenda? That appears to be this:
Section 20.1 Adequate Financial Security. Prior to the Effective Date, and other than as to Cost Overruns, StadCo has provided the Authority with evidence of adequate financial security for the performance of the financial obligations of StadCo for the development and construction of the Stadium Project. The Authority acknowledges receipt of such evidence from StadCo and advises StadCo that such evidence is satisfactory to the Authority to establish adequate financial security for the performance of the financial obligations of StadCo for the development and construction of the Project Improvements, other than as to Cost Overruns, and that the provisions in the Act requiring such evidence have been satisfied (other than as to Cost Overruns). For the avoidance of doubt, the Authority acknowledges and agrees that the following sources of funds are and will be adequate financial security (other than as to Cost Overruns): (a) the financing provided pursuant to the FinanceCo Credit Facility; and (b) the financing provided pursuant to the StadCo Credit Facility.
That’s a lot of words, but it appears to say that Fisher will just have to provide documentation that he’s good for his share of the stadium costs by the Effective Date, which is defined as “[_________], 202[_].” So, no actual details on where the money is coming from yet, or when we’ll know where it’s coming from. We’ll see if anything more is divulged during the meeting itself, but for now, this is looking like a big pile of nuthin.
Every view of this it seems like it has the most absurdly large roof. Does anybody more familiar with MLB know how it compares to existing roofed baseball stadiums.
I would describe it as “comically large.” No one seems to know how it would work in terms of engineering (aka “not collapsing of its own weight”).
You can teach a man to prepare word salads, but it don’t mean he won’t starve.
Just the latest in a long standing pattern of heel dragging and ineptitude that no one in any position of power is willing to call out.
Who wish to paid PSL into a clear bad business dealing situation as this A’s ownership has/have been. It seems to be nothing more but unwise for the whole State overall. I agree, nothing more but a long standing pattern of heel dragging and ineptitude that no one in any position of power is willing to call out.
If this is a plan- the A’s fail right off the bat. No honeymoon period. A season ticket base of scalpers is how they’re gonna do it?
No locals are going to pay for PSLs. The idea that he can cover a significant amount of his obligation with PSLs is crazy.
The raiders raised $250ish million with PSLs. That’s with 35,000 more seats, and a fervent fanbase within driving distance.
Let’s say the average A’s PSL costs $5,000 and they sell every seat in the stadium at that price- that’s $150,000,000 aka 1/10 of what Fisher needs to raise!
Fisher should hire someone who passed 9th grade math!
More docs here:
https://www.lvstadiumauthority.com/meetings/index.php?mtgID=84
The corporate structure is kinda crazy. There’s a whole mess of entities, some newly formed. I imagine the meeting is going right now but I can’t find a link for zoom.
So it looks like there’s an Athletics StadCo LLC, first incorporated in Delaware in 2021 as Valley View Partners LLC, and now being renamed and moved to Nevada as of last week? And it will be handling both stadium development and operations, in two separate agreements? I’m also guessing Valley View Partners would have been the development shell corp for Howard Terminal if it went through as well, the timeline makes sense.
Worth getting some background on how this has proceeded in prior stadium development cases. I guess it makes sense to split off the liability for development, especially, but it also makes me wonder if there’s some scheme for Fisher to sell off interest in the StadCo LLC while retaining control over the Athletics Investment Group LLC to avoid losing majority control and/or avoid triggering the sale clauses in the relocation agreement.
And, of course, if Fisher finally gets cornered into pulling the ripcord, the assets and liabilities accumulated during development will be isolated in the subsidiary LLC, if the new buyer doesn’t want to go ahead with Vegas.
So who covers the inevitable cost overruns?
The development agreement says Fisher pays for cost overruns. With ¯_(ツ)_/¯
I don’t see how the longer term finances pencil out either. Has anyone projected likely attendance for the A’s in Vegas? I suspect they will be lucky to draw 20k per game after the first year. It’s a small market in a hot desert. Not my idea of a fun road game to go to.
From what I recall to make the numbers pencil out the A’s will need 98% capacity. They are also expecting 30% of ticket buys to be from out of town which is insane. Don’t try and compare the A’s to the raiders, the NFL is a completely different animal. One game every other week during the day and games are on Sundays. The A’s will be playing 13 games on a Tuesday and 13 games on a Wednesday. Are 30% of the fans (9000 tickets) on these days going to be from out of town?
Wow. Lots of content today Neil. Kudos to staying on top of everything. Even though it would be better if there wasn’t so much activity….
On the As, I saw this earlier and thought I’d post it here:
https://www.cbssports.com/mlb/news/as-proposed-relocation-to-las-vegas-a-terrible-idea-as-mlb-players-blast-owner-john-fishers-plans/
The red herring happened the moment Fisher said he was attempting to relocate to Las Vegas and the MLB waived the relocation fee. What professional sports league waives anything without some sort of kickback in return. That is the anti-thesis of American sports and its greedy owners. Fisher is broke (relative to what his counterparts in MLB and the other 3 major sports league have). Everyone knows he’s broke, but Manfred wants to continue to allow this farce because of the public money play. He doesn’t want to set a precedent of turning MLB’s back on the blatant grifting of the public.
Back to Fisher: He never had the money to pull this off. Heck, his own family doesn’t want to give it to him (hence equity financing). Now he wants to seek local investors for money. Why don’t he use the welfare checks MLB is sending him via revenue sharing and the $60 million+ a year RSN money that is doled out to pay into this, because it’s sure isn’t reflective in the A’s payroll. None of the other Big 3 professional sports leagues wouldn’t even consider something like this. They want hard cash. What’s being mentioned in this “term” sheet is paper. There is no exchange of hard cash from Fisher. He’s attempting to finance everything, including the portion his family is “contributing”. Even the Raiders forked over hard cash. Granted it wasn’t much relative to the final cost of the stadium (Raiders contributed close to $350 million if you include the land purchases on the Strip and in Henderson) but at least it was some skin in the game. I’m not mentioning Foley of the Golden Knights because T-Mobile was already constructed and NHL-ready.
The terms of the public financing further validates the man is broke. Fisher is attempting to replicate what the Raiders did. The difference is the NFL is the richest professional sports league on the planet by far (the NFL generates more than double the revenue than the next, which is the NBA), the Raiders contributed hard cash (which I mentioned in the previous paragraph), the Raiders bought the land where the stadium was built (Fisher doesn’t own the land at the proposed site and would have to work out an agreement with Gaming & Leisure Properties, which is a gaming REIT further complicating this) which they leveraged with the county in creating the Stadium Authority, the Raiders had to pay a $350 million relocation fee (MLB waived its fee for Fisher) AND the NFL gave the Raiders a loan via G-4, which I’m sure the Raiders paid back from their record-breaking PSL sales.
Now granted, I was one of those people ardently against the Raiders from receiving a dime of public money, since the NFL prints it daily and the Raiders should afford to finance the build itself. Well considering the Raiders generated the second most revenue in the entire league last year at $729 million (only trailing the Cowboys) despite having the second smallest stadium, and went from the least valued NFL franchise at $1.4 billion prior to relocating to the 6th most valuable at $6.2 billion; it would appear I was right.
Why this this still even a thing? Fisher should just sell the team to someone who actually has the money because he doesn’t. It’s like Fisher is that guy who got his first starter home but now sees his contemporaries with much flashier ones and wants to “buy” into a lifestyle he simply can’t afford.
If I’m not mistaken, there is no other sports league in the U.S. outside of the NFL that sells PSLs. It will never work in MLB because the home games are not at a premium (i.e. there are too many of them). MLB attendance on a per-game basis is dwarfed by the NFL. There are a lot of empty seats throughout all MLB stadiums. Even the 2 most prestigious franchises in the sport (Yankees and Dodgers) are not at capacity during large stretches of the season. Yet the A’s think they can sell PSLs in the heat of the Las Vegas summer (which the heat here just broke records last week), thinking residents and visitors alike will want to sit in a semi-covered baseball stadium when there are dozens of other things to do OUTSIDE of gambling. PSLs works in the NFL and in premier futbol leagues like the Premier League because of scarcity and sheer demand. I just illustrated how the 2 wealthiest teams in MLB aren’t at full capacity season-wide. But hey, if Fisher thinks he can sell PSLs more power to him.
Hardly anyone I speak to in Las Vegas wants the A’s here. Us citizens know it’s a scam. That’s why this didn’t come close to a public vote and public feedback was at a bare-minimum. This is a grift on the highest order and someone in public office is on the take.
Pretty sure the “relocation fee” has always been theoretical. The Expos didn’t pay one because MLB owned them at the time, and there was no such thing when the Senators moved in 1972. Manfred had hinted at a $1B fee, but it’s not like it was an MLB rule or anything.
That is true for MLB, which further illustrates my point on how the sport is run. The other 3 all charge a relocation fee (even the NHL, albeit theirs is extremely small compared to the NBA and NFL). Your mention of the Expos reminds me of how that entire thing was farcical and would have caused any other commissioner his job, but then again Selig was a fellow owner so that wasn’t happening.
The more I think about it, MLB has been ran as a Mickey Mouse league for decades. I totally forgot about MLB “buying” the Expos from Jeffrey Loria (who successfully leverage his minority interest into a majority one) so he can in turn “buy” the Marlins, who was then owned by John Henry (yep, that John Henry), who then used those “proceeds” to buy the Red Sox. This is the same league who essentially green-lit the Steroids Era to bring the sport back to the public conscience after the 1994 strike (which ironically led to the Expos’ demise – without a doubt, they would have won the World Series that year), yet placed the blame squarely on the players when it all came out.
Jay – As someone who lives in south Florida, I’ve had the …. Uhhhh … pleasure of having the marlins as my local team.
Through ownership changes, buying a championship (and then selling it off), and stadium trials and tribulations we’ve seen it all.
Calling the league Mickey Mouse is about right as I watched everything happen around here as a microcosm of the league.
There is *some* doubt the Expos would have won the World Series. The team with the best regular season only wins the WS about a quarter of the time in the Wild Card format and 94 was to be the first year with that format.
But the Expos almost certainly would have been in the playoffs. The loss of that opportunity nearly killed baseball in all of Canada.
Pretty every major business decision MLB makes is a screw up. For decades it was about protecting its anti-trust exemption. So much so it gave expansion franchises to unworthy cities to get them to drop lawsuits that jeopardized the exemption. Then once the players union became powerful- every business decision at the top seemed to be about screwing over labor. Now in the last 30 years it’s been about extracting as much public subsidy as possible.
It’s a joke of a league, half the owners have no interest in winning. There’s really only 5-7 franchises that produce incredible revenue. The rest have bad ownership/market and exist only to fill the schedule.
Until the 90s it coasted on being America’s past time. Now it’s not, it hasn’t been for awhile. The owners all hate the players and each other and everyone is fighting over scraps.
It’s so top heavy now- it almost seems likes a waste of money for the top teams to support the lower 2/3s.
The Giants and Padres helped financed their stadiums with PSLs. It’s rare in baseball though, and seems really stupid being new to a relatively poor market.
The only PSL purchasers will be scalpers that do so under the promise/assumption they’ll have access to non A’s events at the stadium.
What non-A’s events are likely to be held at the Armadillo rather than at the Raiders’ stadium? Does Taylor Swift have a sister?
I remember the A’s had a PowerPoint of all the events- and it was all things that would rather be in Allegiant.
I’m not saying buying PSLs is smart- but the only way the A’s could unload them is if they roll out a non-A’s schedule that’s attractive to “brokers”
Could casinos and hotels buy the PSLs, maybe, and act as reseller to visitors? That’s the only scenario that makes any sense at all to me.
If the casinos were all-in on Fisher, one of them or some of the wealthier executives would just invest in the team.
The casinos do buy raiders tickets and infamously hold on to them until the right high roller requests them. This may happen at half time- raiders fans complain about this a lot online.
The warriors sold PSL’s to help finance their arena (which was nearly completely privately financed, SF may have helped on the infrastructure costs but that’s it). However not all seats had PSL’s associated with the seats. Of course the warriors are the highest grossing team in the NBA by about 50% according to Forbes ($768m to lakers/knicks $511m). I’m not expecting the A’s to be anywhere near even he top 10 grossing teams
How did the Raider jump to #2 in revenue? I had to look it up and sure as hell Forbes had them at #2. Gambling? The Cowboys have a freaking campus of things surrounding their stadium that make them money, but Allegiant looks like an island out there.
It’s the concerts. They had several BTS shows that were the band’s last in the USA before a bunch of its members had to do their Korean military service.
Basically the major performers who play stadiums want to play Vegas- they also can’t really fill the place on a weekday, so they’re forced to pay a premium for weekend dates.
When you add the raider dates, a half dozen international soccer games- it’s being used quite a bit, that’s with minimal development surrounding the stadium.
Could that possibly be Fisher’s plan, then? Load up on concerts by acts who don’t want to pay Allegiant prices, and sell equity in the stadium itself and its future revenues to pay it off?
I don’t see how that possibly raises $850 million in private investment, but even a bad business plan is better than none at all.
When it comes to concerts, yeah they pitched that as a pipe-dream revenue stream, but FishFace is entirely out of his league. He has no experience in that arena. He’s no Lacob/Gruber.
Allegiant will get the stadium tours, T-mobile will snag some smaller shows, and Jimmy Dolan just launched the Sphere. Thats’s 18-20K in capacity and my local pals say its pretty wow. I seriously doubt a 30K baseball park could beat any of them in the box office. Jay could probably list some other available venues.
When it comes to equity, it’s a shell game, huh? The failure son has been failing for decades now and there’s plenty of money to be made from failure. That’s the business plan for many successful businesses. Welcome to Vegas!
Freddy- agreed. fisher wasn’t a real estate developer, he’s never going to be a concert promoter.
When you look at most of these major stadium tours- they usually play football stadiums. Allegiant configured for concerts is usually in the 45,000 seat range. A 30,000 seat baseball stadium configured for concerts might be about 22,000-25,000- this is closer to the Sphere at 17,000 or t-Mobile at 16,000 then it is to Allegiant.
Neil- as you’ve said many times- Vegas is flush with concert venues. There’s not really a need for another one, and there’s better chances that the next one is an arena for the NBA expansion team then Fisher’s Tropicana dome.
The “have a team and fill in the open dates with concerts” seems like a plausible plan for the theoretical NBA arena in Vegas, but a baseball stadium? Why would a tour want to preform in a baseball stadium rather than an arena?
Won’t work. There are so many venues in Las Vegas it’s amazing how any of them are in operation (at least those venues off-Strip). Heck, MGM indirectly relegated MGM Grand to press conferences and the occasional boxing match since T-Mobile opened (I know first-hand because I worked with companies who staged events there recently). Thomas & Mack eventually will lose the NFR to Allegiant due to capacity issues. I don’t see how a baseball stadium with a semi-covered roof can have concerts or any other ancillary events to cover the costs. Once Oakview builds the new basketball arena, there’s another venue needing to be fed events (at least it will be anchored by the NBA team). Oh, and of course there is yet another arena being proposed next to Fountainbleu.
Long story short, someone from the county and/or state level is grifting to push this through.
Yes,it’s a no-brainer, something is not right with the silence of those in position of public office
that know this John Fisher A’s owned team is bad business. VEGAS/NEVADA don’t need knowingly bad business. Where are our public office personnel that represents the Sliver State best interest? It is election time.
I’m pretty sure it’s NFL, MLB, NBA, IPL and the Prem in the top 5 revenue wise, with the IPL certain to pass both the NBA and MLB within a couple of years. But the NFL is well ahead, if not quite double, 17.5B to 11.5B for MLB. For now, the IPL is barely behind the NBA at 9.5B.
“Does Taylor Swift have a sister?”
OMG Neil that’s a ROFL classic!
Forget the money, Wrigley Field sits on 9 acres, but that may have met ballpark standards 110 years ago, but today’s amenities like clubs and skyboxes etc will need more than 9 acres. Chase field is nearly 20 acres, so half that doesn’t look like it will work.
I’ve been saying for quite sometime now…this is ALL about Vegas showing the MLB they can sponsor an “expansion” team. No one wants the A’s or their horribly-run business model.
Let the chips fall where they may, but Fisher isn’t getting the money and none of the time frame / money works to house them.
My bet…Fisher and the State can’t agree in financing, Vegas shows the MLB they are up to the challenge of hosting an MLB team, Fisher is told to go elsewhere (probably back to Oakland), and Vegas builds their stadium for a future team. Financing is part of the ‘Fees” the MLB will absorb, but be a part of whatever new team is built to be paid for by new ownership.
Mark my words…Fisher has NEVER been successful at ANYTHING. What makes anyone think he suddenly is going to pull a rabbit out of his hat?
Why would MLB want to pay for a stadium out of expansion fees? That’s money they could be pocketing if they got somebody else, possibly in a larger city, to pay to build it.
As an Oakland fan, it is just infuriating how the League has screwed Oakland fans at ever turn. Manfred is carrying out Bud Selig’s desire to wrench the A’s out of Oakland. I suspect because Selig tried to buy the A’s while they were in Kansas City in 1967 and move them to Milwaukee but was rebuffed and the team moved to Oakland the following year instead.
This is sad how businessmen and government officials are playing with the lives of players & employees and the hearts of many fans throughout Northern California and maybe some in Las Vegas. I’m from Sacramento and I cherish the thought of watching The A’s play in my hometown. The thought of baseball in the gambling mecca of Vegas makes zero sense. Although I do believe Mr Ranadive of the Sacramento Kings has something up his sleeve to make the The A’s the Sacramento A’s permanently, I would luv ❤️ nothing more than to see the Howard Terminal project brought back to life and Mr Fisher forced to sell the team and shamed out of our state for trying to move the team to Vegas and The Oakland A’s are placed back in The Bay where they belong!